Redundancy is one of the hardest things any business has to deal with, employers usually face it when money is tight, when the business model changes, or when technology takes over certain jobs. Employees, on the other hand, often feel anxious and uncertain about the future, that’s why it’s so important to understand how redundancies in Scotland actually work and what the law expects from the process.
What Redundancy Really Means
Redundancy has a legal definition. Under the Employment Rights Act 1996, it happens when a job disappears. That might be because the whole business is closing, a workplace is shutting down, or fewer people are needed for the same kind of work.
It’s not about performance. It’s not a disciplinary issue. It’s about the role itself no longer being required. If redundancy is used as cover for something else, the dismissal can be challenged in a tribunal.
Checking It’s Genuine
Before anything else, employers need to make sure redundancy is real. Maybe the company is cutting costs, maybe a department is moving, maybe automation has reduced the need for certain roles. If the work is still there and it’s only one person being singled out, that’s not redundancy.
Planning Ahead
Rushing into the process is risky. Employers should stop and think about who’s affected, which departments or roles are under review, and what criteria will be used to make decisions. Skills, attendance records, qualifications, even disciplinary history, these can all be factors, but they need to be applied fairly and consistently. Discrimination can’t play a part.
It’s also worth thinking about whether redeployment is possible. Sometimes moving someone into another role avoids the need for redundancy at all.
Consultation Is Key
Consultation is where employers talk to employees about what’s happening and why. It’s not meant to be a tick-box exercise. Staff should be given the chance to ask questions and suggest alternatives.
The rules change depending on numbers. If fewer than 20 employees are at risk, the law doesn’t set a minimum consultation period, but the process still has to be fair. If there are 20 or more, there are formal timelines. At least 30 days of consultation is needed when 20 to 99 staff are involved. For 100 or more, it’s 45 days. In larger cases, the Redundancy Payments Service also has to be notified.
Deciding Who Goes
When several people do similar jobs, selection criteria are needed. Employers often score staff against agreed factors like skills, qualifications, or attendance. But there are clear red lines. Selecting someone because they’re pregnant, on maternity leave, or disabled is automatically unfair.
Keeping written notes is essential. If the decision is ever challenged, those records will be important evidence.
Considering Alternatives
Employers have a duty to look for other roles. If there’s a suitable vacancy, it should be offered to the employee at risk. They get a four-week trial in the new role. If it doesn’t work out, they’re still entitled to redundancy pay.
Notice and Payments
Once the process is complete, employees must be given proper notice. The minimum is one week if they’ve worked between one month and two years. After that, it’s one week per full year of service, up to 12 weeks. Anyone with 12 years or more gets the maximum of 12 weeks.
Statutory redundancy pay applies to employees with at least two years’ service. The calculation depends on age, length of service (capped at 20 years), and weekly pay (capped at the statutory maximum, which changes each year). Some employers also offer enhanced payments under contracts or workplace policies.
Employees are also due any outstanding wages, holiday pay, or bonuses when they leave.
Supporting People
Redundancy is stressful. The law covers the basics, but good employers often go further. Clear communication, reasonable time off for interviews, even small things like CV advice, these can make a difficult process a little easier. They also protect the employer’s reputation.
Avoiding Mistakes
The most common mistakes in handling redundancies in Scotland include rushing consultation, using unfair selection methods, and failing to offer suitable alternative jobs. Miscalculating redundancy payments or pressuring employees into signing settlement agreements without advice are also frequent errors.
These mistakes can turn a tough process into a legal dispute, costing more time and money in the long run.
Final Thoughts
Managing redundancies in Scotland is about more than following the letter of the law. Employers need to show the situation is genuine, consult properly, apply fair criteria, and pay what’s owed. Employees should know their rights and seek advice if anything feels unclear.
Handled fairly, redundancy allows a business to adapt while treating staff with dignity. Handled badly, it can lead to unfair dismissal claims and reputational harm. If you’re facing redundancy, whether you’re an employer making difficult decisions or an employee caught up in them, independent legal advice is the best way to move forward with confidence.