Dismissal on grounds of redundancy: what are the rules?

Redundancy is an umbrella term for dismissals that do not relate to you personally as an employee. It may involve financial reasons, restructuring, or the closure of a business.

A dismissal must be based on objective reasons (previously referred to as objective grounds) under Section 7 of the Employment Protection Act (LAS). In redundancy cases, this includes the employer having investigated whether you can be redeployed to other work with the employer.

If you suspect that the redundancy actually relates to you personally, for example following a conflict, it may be a case of sham redundancy. The dismissal is then assessed instead as a dismissal for personal reasons. If you are on parental leave, also read about the rules on dismissal during parental leave.

The selection-order rules in Section 22 of LAS govern the order in which employees are dismissed. Since the 2022 reform, employers may, under certain conditions, exempt a limited number of employees, and collective agreements may contain different selection-order rules.

It is important to distinguish between two things. If a dismissal lacks objective reasons, it may be declared invalid under Section 34 of LAS. However, if the dismissal is challenged solely because the selection-order rules were not followed, it cannot be declared invalid under Section 34. Damages may be available instead.

Anyone wishing to have a dismissal declared invalid must, as a general rule, notify the employer within two weeks (Section 40 of LAS). The time limit may differ in certain cases, for example if the dismissal notice lacks the required information, and collective agreements may affect it. You should therefore act quickly.