What Is The Difference Between Redundancy And Termination?

Making an employee redundant is a reason for terminating a staff member’s employment and has very specific criteria that must be met to satisfy ‘redundancy’. There are other reasons for termination or dismissal which include poor conduct or performance.

Depending on the reasons for ending employment, the processes to carry out terminating employment are quite different.

To legally make a staff member redundant, it must be because the employer's business has ceased to operate or has ceased to operate in the place where the employee was employed, or the need for work of a particular kind to be done has diminished or ceased.

Typically a redundancy occurs when there are changes to a business’s operational requirements. For instance, a business has lower sales in a particular area, shuts down certain projects, restructures or reorganises, or has technological advances where the job can be accomplished without the employee.

An employer cannot after making a staff member redundant then advertise their job again, as this shows the job still needs to be carried out. To be a genuine redundancy, the employer also needs to follow the correct consultation process as outlined by UK employment law.

Lastly, to be a genuine redundancy the employer must have not reasonably been able to give the staff member other work either in the same business or with an associated entity.

Termination that is not because of redundancy covers both when an employee resigns or is fired. An employee may be dismissed for poor performance or conduct. To dismiss an employee, the employer must follow a fair procedure, including giving the employee a warning and a chance to improve their performance.

In both cases of redundancy or other reasons for termination, notice must be given to the staff member. The notice period may vary depending on how long the employee has worked for the organisation. If the employee has committed gross misconduct, for instance committed a crime, notice does not have to be given, though certain entitlements still need to be paid. If you are operating a small business, you will have to follow the Acas Code of Practice to terminate employees correctly. 

We’ve written more about redundancy here and termination here.