Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Redundancy definition

What does Redundancy mean? Redundancy describes a dismissal arising because the employer no longer needs employees to do work of a particular kind, or the business (or workplace) closes or relocates. It concerns the role, not the individual’s conduct or capability. In England & Wales and Scotland, the statutory test is in section 139 Employment Rights Act 1996; in Northern Ireland, Article 174 Employment Rights (Northern Ireland) Order 1996; and in Ireland, the Redundancy Payments Acts 1967–2014. Across these jurisdictions, the core elements are broadly consistent. Key legal features include: a potentially fair reason for dismissal if a fair procedure is followed; use of an appropriate...

Redundancy Payments: UK Tax, NICs and Corporation Tax Treatment, including Statutory/Enhanced Schemes, £30,000 Exemption, PENP/PILON, National Insurance Fund Claims and HMRC Clearances

Published by a LexisNexis Tax expert

Practice notes

Redundancy

Redundancy is among the five routes by which an employer may unilaterally bring an employment contract to an end, in circumstances where that termination may constitute a potentially fair dismissal.

The other four potentially fair grounds for dismissal are:

the employee lacks the capability to perform the role
the employee’s conduct renders continued employment untenable
the employee cannot remain in the post without breaching a legal restriction
the residual category of ‘some other substantial reason’

Section 309 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) provides that, save for earnings, no charge to income tax on employment income arises by reason of a redundancy payment or an approved contractual payment, except to the extent that Chapter 3 of Part 6 (payments and benefits on termination of employment, etc) applies...

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Sam Whitaker

Debevoise & Plimpton LLP

Sam is an International Counsel in the London office of Debevoise & Plimpton LLP. He provides the full range of employment and benefits advice on transactions and stand-alone employment matters. He has substantial experience of advising on the employment and benefits aspects of various transactions, including UK listings, share and asset acquisitions and disposals (both UK-based and multi-jurisdictional transactions), joint ventures and other transactions. He provides the full range of stand-alone employment advice including the implementation of employment and benefit arrangements for senior executives, implementing executive severance arrangements, managing UK and international redundancy exercises and related consultation requirements, the establishment of share incentive and bonus plans, employment litigation involving restrictive covenants, unfair and wrongful dismissal and discrimination issues. He also advises on compliance with regulatory requirements on remuneration, in particular the FCA/PRA’s Remuneration Codes and, at a European level, CRDV....

Web page updated on 21/05/2026

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