Redundancy vs Dismissal

Redundancy and dismissal both end a job, but in law they are quite different things, and the label your employer uses does not settle which one has happened. Redundancy means the role itself has gone; dismissal means the employer has ended your employment for a reason connected to you. The distinction decides whether you receive redundancy pay, what process your employer had to follow, and what you can challenge afterwards. This comparison sets out both, and where the line between them is often blurred.

Tip: scroll the table sideways to see all columns →

Feature	Redundancy	Dismissal
What it means	Your role is no longer needed by the business	You are being ended from employment for a reason relating to you (conduct, capability, etc.)
Statutory pay entitlement	Statutory redundancy pay (after 2 years service)	No statutory redundancy pay — but notice pay applies
Consultation required	Yes — individual (always) and collective (20+ redundancies)	Yes — disciplinary process and right to be accompanied
Right to appeal	Yes — selection process can be challenged	Yes — internal appeal, then potentially Employment Tribunal
Can lead to unfair dismissal claim	Yes — if selection or process was unfair or discriminatory	Yes — if dismissal was not for a fair reason or procedure was not followed
Notice period	Contractual or statutory minimum	Contractual or statutory minimum (unless gross misconduct)
Statutory pay entitlement	Statutory redundancy pay after 2 years: 0.5–1.5 weeks pay per year	No redundancy pay; notice pay and accrued holiday must be paid
Right to written reasons	Yes — employee can request written reasons for selection	Yes — employees with 2+ years service can request written reasons

If your employer calls it redundancy but your role continues or a very similar role is filled shortly after, this may be unfair dismissal. Seek advice from Acas.

Working out what has really happened

Ask one question: is the work still being done? Genuine redundancy means the business no longer needs anyone to do that job — the site is closing, the function has gone, or fewer people are needed for the same work. If your duties are simply handed to someone else, or a similar post is advertised soon afterwards, calling it redundancy does not make it so, and what has actually happened may be a dismissal that needed a fair reason and a fair process.

Role genuinely gone, two years' service or more? Statutory redundancy pay is due, alongside notice pay and untaken holiday.
Conduct or performance the real reason? That is a dismissal, and you were entitled to a disciplinary process, notice of the allegations and the right to be accompanied at the meeting.
Selected for redundancy from a pool? The pool and the selection criteria can be challenged, particularly where the scoring looks subjective or penalises sickness absence or family leave.

The mistake people make most often is accepting the description without testing the substance, then signing a settlement agreement while still shocked. Take the paperwork away, read it somewhere calm, and get advice before signing anything that waives your right to bring a claim.

Time limits are short and unforgiving. Most employment tribunal claims must start with Acas early conciliation within three months less one day of the dismissal, so speak to Acas early even if you are undecided.

Frequently asked questions

How long do I have to challenge what happened?

Very little time. You normally have three months less one day from the date your employment ended to begin a tribunal claim, and you must notify Acas for early conciliation before you can lodge it. Notifying Acas pauses the clock while conciliation runs, which is why contacting them early protects your position even if you would rather resolve things internally. Tribunals only extend the deadline in narrow circumstances, so treat the internal appeal and the Acas notification as parallel tracks, not sequential ones.

Should I sign the settlement agreement I have been offered?

Not without independent advice — and legally the agreement is not binding unless you have received it from a qualified adviser, whose fee the employer usually contributes towards. Signing gives up your right to bring claims, so it is worth understanding what those claims might be worth first. Check what is actually being offered beyond your statutory and contractual entitlements, since notice pay, accrued holiday and redundancy pay are due anyway and should not be presented as part of the settlement.

What if I am offered another job instead of redundancy?

An offer of suitable alternative employment changes things. If your employer offers a suitable role and you unreasonably refuse it, you can lose your entitlement to redundancy pay. Whether a role is suitable depends on pay, status, hours, location and skills — not just the job title. You are entitled to a four-week trial period in the new role without losing your redundancy rights, so if you are unsure, take the trial rather than refusing outright, and put your concerns in writing at the start.

Do I still get paid if I am dismissed for misconduct?

You are always entitled to be paid for work already done and for accrued but untaken holiday, whatever the reason for dismissal. Notice pay is different: an employer can dismiss without notice only for gross misconduct, and only where a fair investigation supports that finding. Redundancy pay does not arise on a conduct dismissal. If you believe the finding is wrong, use the internal appeal, keep every document, and contact Acas within the tribunal time limit.

Related guides

Redundancy Basics

Redundancy occurs when your employer needs fewer people to do a particular type of work. If you are made redundant lawfully, you may be entitled to statutory redundancy pay, proper consultation, and your full notice entitlement. Knowing your rights helps you challenge a flawed process.

8 min

Unfair Dismissal Overview

Being dismissed from a job is stressful. If your employer lacked a valid reason or did not follow a fair procedure, you may have been unfairly dismissed and be entitled to compensation. This guide explains the law and what to do.

8 min

Employment Tribunal Basics

The Employment Tribunal is an independent judicial body that resolves disputes between workers and employers. It is less formal than a civil court but follows strict procedures and deadlines. This guide walks you through the key steps.

8 min

Final Pay and Deductions

When your employment ends, your final pay should include everything you are owed — not just your last month's wages. Knowing what you are entitled to receive, and what deductions are lawful, helps you identify if you have been underpaid.

5 min

Disclaimer

The information on this page was correct at the time of writing. Amounts, thresholds, and rules may change. Always check the latest official guidance.