When Does Redundancy Become Unfair Dismissal?

When a company needs to downsize, it may offer redundancy to employees, including those in senior positions. Occasionally, an employer may falsely claim redundancy, despite having no genuine business reasons for the dismissal, as a means of unfairly skimming off high-level positions.

If you’ve been a victim of an unfair redundancy, you may have an unfair dismissal claim. At Cavendish Employment Law, we’re specialists in employment law with a long track record of winning high-value cases for high-level employees.

Get in touch with us today and we’ll help you secure the best possible outcome to your employment dispute.

Contact our employment law team on 0207 9657203

or contact us online.

What is Fair Redundancy?

Whilst the redundancy process typically affects lower-level employees, it can still happen to senior executives as they are the most expensive group of employees within a business. There are specific lawful procedures that an employer must follow after notifying employees that redundancies will happen.

Consultation & Selection Process

Consultations between employer and employee are the first steps to take in any redundancy situation. An employer must speak with the affected employee(s) and clearly identify the reasoning for redundancy selection, providing as much information as possible about why their job is at risk.

At this stage, employees must be offered the opportunity to present any alternative proposals to the redundancy.

The selection process must be fair and objective, taking into account disciplinary records, voluntary redundancy and length of service. It must not identify employees based on any protected characteristics including age, sex, race, disability or full-time or part-time status.

An employer must consult with any employee at risk of redundancy. If no consultation process is offered or the selection process is deemed unfair, a claim for unfair dismissal may arise.

Alternative work

During the consultation process, employers must consider all alternatives that may avoid redundancy, including salary reduction, duty changes or even restructures - whereby other employees are made redundant instead.

Suitable alternative roles should be considered at this time; what is deemed suitable depends on the remuneration offered, position similarity, job terms and location.

For high-level executives and senior employees, the possibility of alternative work will be less likely. If the option of alternative employment neither exists nor is considered suitable by the employee, reasonable time off work must be given to seek new employment or training.

Notice period

This is determined by law and calculated according to your length of service. Whilst an employment contract can extend the statutory notice period or establish a prescribed period of notice, it cannot reduce the period prescribed by statute.

During the notice period, an employee should receive their salary or be paid in lieu of notice. If payment is made in lieu of notice, the employment can be ended without notice being given. It is sometimes possible to negotiate for the notice to be spent on Garden Leave so that the employee can remain off work whilst marketing themselves to prospective employers.

What is Unfair Dismissal?

Unfair dismissal happens when an employer lets an employee go without a lawful reason or correct following of proper procedures. Whilst there are many individual circumstances at play, signs of unfair and automatic unfair dismissal include:

  1. No valid reason: If an employer terminates an employee without providing a legitimate reason for the dismissal, or being able to show that there is a genuine redundancy situation.
  2. Lack of proper procedure: If an employer does not follow the proper procedures or legal requirements when terminating an employee's contract. This includes failure to provide adequate notice, not conducting an appropriate investigation, or not giving the employee an opportunity to respond to any allegations.
  3. Discrimination: If an employee is dismissed based on discriminatory factors such as age, disability, gender, race, or religion. This includes compulsory retirement, pregnancy, refusal to take family leave and more.
  4. Retaliation: If an employer dismisses an employee for exercising their legal rights such as whistleblowing. 
  5. Disproportionate response: If the punishment of dismissal seems much harsher than the employee's alleged misconduct or poor performance.
  6. Lack of warnings: In many cases, employers are expected to provide employees with warnings and opportunities to improve their performance before resorting to dismissal. 
  7. Inconsistent treatment: If an employer dismisses an employee for a reason that others have not been dismissed for.
  8. Breach of terms: If an employer fails to adhere to the terms of the employment contract or the company's own policies when terminating an employee.

What is the Difference Between Unfair Dismissal and Constructive Dismissal?

Unfair dismissal is a statutory right available when an employee feels that their termination breaches employment laws or regulations.

Constructive dismissal is a situation where employees feel compelled to resign from their job due to intolerable work conditions caused by their employer's actions or behaviour.

Reasons for constructive dismissal include significant changes to their job duties, demotion without proper reason, a significant reduction in salary, or persistent harassment.

Unfair dismissal or redundancy?

If the correct procedures are not followed when redundancies are being made, or the redundancy is being offered for invalid reasons, a claim for unfair dismissal may arise. Only employees who have worked for the company for a continuous period of two years or more at the date the employment contract ends can bring an unfair dismissal claim to the Employment Tribunal.

What should you do if you think you have been unfairly dismissed?

If unfair dismissal is suspected, an employee should attempt to negotiate with the employer with a view to being compensated for their reasonable anticipated loss of earnings. Taking a claim for unfair dismissal to the Employment Tribunal should be a last resort and only exercised when all other options have been exhausted.

There are strict time limits in the Employment Tribunal, and an application must be made to ACAS for Early Conciliation within three months of the date of dismissal (or if the case concerns discrimination, within three months of the date of the last act complained of).

Remedies for Unfair Dismissal

If all other options fail, a claim for unfair dismissal can be made to an Employment Tribunal. If the Tribunal is in favour of the employee, it can order reinstatement, re-engagement and/or make an order for compensation.

Settlement agreements

If the employer offers compensation or a settlement agreement as a solution to the situation, the employer must pay for the employee to seek independent legal advice before accepting that offer. Seeking legal advice at this stage is important as a compensatory award will be given in return for the employee agreeing to waive their right to bring a claim for unfair dismissal.


If reinstatement is ordered, the employer must reinstate the employee into their former position and compensate them for any loss of earnings from the date of dismissal to the date of reinstatement.  This is, however, very unusual particularly with senior executives.


If re-engagement is the outcome, the employer must provide the employee with comparable employment and make good of any financial losses.

Compensatory award

A compensatory award will compensate the employee for the earnings lost as a result of losing their employment. The Tribunal can reduce this award if it finds that even if fair procedures have not been followed, the employee would have been dismissed anyway or if it determines that the employee hasn't done enough to secure new employment.



[H2] Contact our Redundancy and Unfair Dismissal Lawyers in London

If you’re a high-level executive, senior employee or director, and believe your redundancy is grounds for unfair dismissal, contact our specialist employment lawyers at 0207 965 7203 or submit an online enquiry form for confidential and expert advice.

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