Around 114,000 people in the UK were made redundant between May and July 2026, according to the Office for National Statistics. If you are facing redundancy, it helps to understand your rights and what your employer is expected to do. This includes following the correct process and explaining what you are entitled to before you agree to anything.

Employment law is also due to change on 1st January 2027. From that date, the qualifying period for unfair dismissal protection is due to fall from two years to six months. Until then, employees with shorter service may have fewer options if they want to challenge a dismissal. Whatever your circumstances, make sure you understand the process, your redundancy pay and notice entitlement, and any options available to you.

What counts as redundancy and when it might not

Redundancy happens when an employer no longer needs a role or needs fewer people to do the work. This might be because a business is closing, moving to another location or dealing with a drop in work. The reason should relate to the job itself, rather than being a way to dismiss someone for another reason. Redundancy can be compulsory, or your employer may invite staff to volunteer.

A dismissal described as redundancy is not always what it seems. If the real reason is your performance, for example, or you have been selected unfairly, you may have grounds to challenge it as unfair dismissal. Your length of service affects the protection available to you. Until 1st January 2027, employees generally need two years of service to claim ordinary unfair dismissal. After that date, the qualifying period is due to fall to six months.

Discrimination is a separate issue. If your selection for redundancy is linked to a protected characteristic, such as age, gender, disability or pregnancy, you may be able to bring a discrimination claim regardless of how long you have worked for your employer.

What a fair redundancy process should look like

Your employer should consult with you before making a final decision. They should explain why your role is at risk, listen to your response, and consider whether there are alternatives, such as moving you into another suitable role.

The selection process should also be fair. Your employer should use clear criteria and apply them consistently, give you a chance to raise concerns or suggest alternatives, and explain the expected timescales. Where 20 or more redundancies are proposed, collective consultation requirements may apply.

If your employer seems to have made up their mind before consultation starts, or gives you little chance to respond, it is worth asking questions. You should have an opportunity to explain your position and put forward alternatives before a final decision is made.

How your redundancy pay works and whether it is taxed

If you have at least two years’ continuous service, you are generally entitled to statutory redundancy pay. The amount depends on your age, length of service and weekly pay, subject to a government cap. Your contract may offer a higher payment, so check the terms before accepting an amount.

Tax depends on the type of payment you receive. The first £30,000 of qualifying redundancy compensation is normally tax free. Any amount above that, along with payments such as unpaid wages or holiday pay, may be taxed differently. You can use our online tool to calculate your statutory redundancy pay and estimate what you could receive.

Your notice period and what else you are owed

As well as redundancy pay, you are entitled to notice. Between one month’s employment and your second anniversary, the statutory minimum is one week’s notice for each full year of service, up to twelve weeks. Your contract may provide for a longer notice period.

You may be asked to work your notice, or your employer may pay you in lieu so you can leave sooner. You should also receive payment for any holiday you have accrued but not taken.

Where a settlement agreement fits in

Your employer may offer a settlement agreement as part of your departure. This is a legally binding contract in which you receive an agreed payment in return for giving up the right to bring certain legal claims.

You must get independent legal advice before signing, and your employer usually contributes to the cost. A solicitor can explain which claims are covered by the agreement, check whether the payment is reasonable in your circumstances and negotiate the terms where appropriate. It is worth understanding exactly what you agree to before you sign.

You can also read about a common flaw that catches people out before making a decision. Our settlement agreement solicitors can review the terms and advise you on the offer.

Speak to our employment team

Your options will depend on your circumstances, including how long you have worked for your employer and how the redundancy process has been handled. If you have questions about your rights, your pay or a settlement agreement, getting advice before you decide can help you understand where you stand.

Speak to our redundancy solicitors for advice on your employment rights. With offices including Winchester, we advise and support employees across the country. Get in touch to discuss your circumstances.