Understanding Sham Redundancy
A sham redundancy occurs when an employer claims a role is being made redundant, but in reality, the redundancy is not genuine. In a genuine redundancy, the job itself disappears – either because the business is closing, there’s a reduced need for the work, or the company is restructuring. By contrast, sham redundancy is used as a cover for dismissing an employee for another reason, such as performance issues, personality clashes, or to replace someone with a new hire. This practice is unlawful and can amount to unfair dismissal.
Employers might use sham redundancy to avoid the legal obligations and risks associated with disciplinary or capability procedures. For example, rather than following a fair process for addressing performance concerns, an employer might claim the role is no longer needed, even though the work still exists or is quickly filled by someone else. Recognising when redundancy is not genuine is vital for employees, as it protects their rights and enables them to challenge unfair treatment.
Spotting a sham redundancy can be challenging. Warning signs may include vague or inconsistent reasons for redundancy, lack of proper consultation, or seeing your role advertised soon after your dismissal. Understanding your rights under the Employment Rights Act 1996 is essential. This Act sets out the legal framework for fair redundancies and protects employees from unfair dismissal. If your redundancy does not follow the correct legal process, you may have grounds to challenge it.
It’s also important to know that employers are required to follow fair procedures when making redundancies, including genuine consultation and consideration of alternatives. For more information on how employers should handle restructures and avoid unfair or sham redundancies, you can read our advice on Avoiding Unfair or Sham Redundancies.
If you believe your redundancy may not be genuine, you are not alone. Understanding sham redundancy is the first step towards protecting your employment rights. For a broader overview of what sham redundancy is and how it affects employees, visit our main page on Sham Redundancy.
Signs You May Be Facing Sham Redundancy
Redundancy is a legitimate reason for dismissal, but unfortunately, some employers misuse redundancy as a cover for other motives, such as removing an employee for personal reasons or avoiding proper disciplinary procedures. Recognising the signs of a sham redundancy can help you protect your rights and take action if necessary. Here are some common indicators that your redundancy may not be genuine:
1. Lack of a Genuine Business Reason
A true redundancy happens when a job is no longer needed due to business changes, such as a company restructure, closure, or reduced need for a particular role. If your employer cannot clearly explain the business reason behind your redundancy, or the explanation seems vague or inconsistent, this could be a warning sign.
2. The Role Is Re-advertised or Refilled
If you notice that your job, or a very similar one, is advertised shortly after your redundancy, it suggests the role was not genuinely redundant. Sometimes, employers may also hire someone else to do your work under a different job title.
3. You Are Singled Out Without Fair Selection
Employers must use a fair and objective process to select employees for redundancy. If you are chosen without clear criteria, or it seems you were targeted because of personal issues, recent complaints, or protected characteristics (such as age, gender, or union activity), this could point to a sham redundancy.
4. Failure to Consult Properly
By law, employers should consult with you before making you redundant, explaining the reasons and considering alternatives. If you were not given a chance to discuss your situation, ask questions, or suggest alternatives, this could indicate the process was not genuine. This is especially important in cases involving collective redundancies, where additional consultation requirements apply.
5. Inconsistencies in Communication and Documentation
Pay close attention to what your employer tells you, both verbally and in writing. Contradictory messages, sudden changes in the stated reasons, or missing paperwork can all be signs that the redundancy process is not above board. Keep copies of all emails, letters, and notes from meetings, as these may be important if you decide to challenge your redundancy.
6. Your Workload Remains or Increases
If, after your redundancy, your responsibilities are simply distributed among remaining staff, or your workload continues much as before, this may indicate that your role was still required.
If you recognise any of these warning signs, it’s important to gather evidence and seek advice. For a more in-depth look at how to identify sham redundancy – including practical examples and further steps – see our detailed guide on Spotting Sham Redundancy.
Steps to Challenge Sham Redundancy
If you believe your redundancy is not genuine, there are clear steps you can take to challenge a sham redundancy. Acting promptly and following the correct process will give you the best chance of protecting your rights.
1. Review the Reasons and Gather Evidence
Start by carefully reviewing the reasons your employer has given for your redundancy. Genuine redundancy usually occurs when your role is no longer needed due to business changes, such as restructuring or closure. If you suspect the redundancy is a cover for unfair dismissal, discrimination, or to remove you for another reason, begin collecting evidence. This might include:
- Emails, meeting notes, or letters about your redundancy
- Recent job adverts for roles similar to yours within the company
- Records of your performance reviews or any recent changes to your role
- Witness statements from colleagues who may have relevant information
Keep a detailed record of all communications and events related to your redundancy. This documentation will be crucial if you need to make a formal complaint or claim.
2. Raise Your Concerns Internally
Before taking legal action, use your employer’s internal grievance procedure. Most companies have a formal process for employees to raise concerns about unfair treatment. Submit a written grievance outlining why you believe the redundancy is not genuine, including any evidence you have gathered. This gives your employer an opportunity to address the issue and may resolve the dispute without further escalation.
3. Seek Legal Advice
If your concerns are not resolved through the internal process, or if you need guidance at any stage, consider seeking independent legal advice. An employment law specialist can assess your situation, help you understand your rights, and explain your options. They can also advise you on the likelihood of success if you decide to make a formal claim.
4. Consider an Employment Tribunal Claim
If you are unable to resolve the issue internally, you may be able to make a claim to an employment tribunal for unfair dismissal. To do this, you usually need to have worked for your employer for at least two years. The tribunal will look at whether your redundancy was genuine and if your employer followed a fair process. You may also be able to claim if you believe the redundancy was used as a cover for discrimination.
5. Be Aware of Time Limits
Strict time limits apply for bringing a claim to an employment tribunal. In most cases, you must start the process within three months (less one day) from the date your employment ended or from the date of the act you are complaining about. Before submitting a tribunal claim, you are required to notify Acas and go through Early Conciliation, which may extend the deadline slightly.
Missing these deadlines can mean losing your right to challenge the redundancy, so it is important to act quickly.
6. Explore Related Legal Protections
If your situation involves multiple redundancies or you believe your employer has not followed proper consultation procedures, you may find it helpful to read about how to challenge or appeal a collective redundancy. Understanding the broader legal landscape can help you identify if additional rules or protections apply to your case.
By following these steps and seeking advice where needed, you can give yourself the best chance of successfully challenging a sham redundancy and protecting your employment rights.
Using Internal Procedures
When you suspect your redundancy is not genuine, it’s important to use your employer’s internal procedures before taking any external action. Most workplaces have a set process for raising concerns, often called a grievance procedure. This gives you a formal way to challenge decisions you believe are unfair, such as a sham redundancy.
How to Raise Concerns Formally
Start by reviewing your employer’s grievance policy, which is usually found in your staff handbook or on the company intranet. If you can’t find it, ask your HR department for a copy. The process typically involves writing a formal letter or email to your manager or HR, clearly stating your concerns about the redundancy process.
Your grievance should set out:
- Why you believe the redundancy is not genuine (for example, if your duties still exist or your role is being refilled under a different title).
- Any evidence you have, such as internal communications, job adverts, or witness statements.
- The outcome you are seeking, such as a review of the redundancy decision or reinstatement.
It’s important to be as specific as possible. Give dates, times, and the names of any individuals involved. If you are part of a larger group facing redundancy, you may also want to read about common issues and concerns in collective redundancy for additional context.
What to Include in a Grievance about Sham Redundancy
When drafting your grievance, include:
- A clear statement that you are raising a formal grievance.
- Details of the redundancy process as you experienced it.
- Any facts or documents that support your belief that the redundancy is a sham.
- Reference to relevant company policies or procedures that you believe were not followed.
- Any impact this has had on you and what you would like your employer to do next.
Following the ACAS Code of Practice on Disciplinary and Grievance Procedures is essential. This code sets out the minimum standards your employer should meet when handling your grievance, including holding meetings to discuss your concerns and providing a written outcome. If your employer does not follow the ACAS Code, it could strengthen your case if you later make a claim to an employment tribunal.
Keeping Records
Throughout the process, keep detailed records of all communications with your employer. Save copies of emails, letters, meeting notes, and any responses you receive. Make a note of any conversations, including dates, times, and what was discussed. These records can be vital evidence if you need to escalate your complaint or take legal action later on.
By following the correct internal procedures and keeping thorough records, you put yourself in the strongest possible position to challenge a sham redundancy and protect your rights at work.
Employment Tribunal Claims
Employment Tribunal Claims
If you believe your redundancy is a sham and not genuine, you may have grounds to challenge your employer’s decision by making a claim to an employment tribunal. An employment tribunal is an independent body that resolves disputes between employees and employers, including cases involving unfair dismissal, discrimination, or breaches of employment rights.
When to Consider Making a Claim
You should consider bringing a claim to an employment tribunal if you feel your redundancy was not genuine – for example, if your role still exists, or if you believe you were selected unfairly or for reasons unrelated to redundancy. In many sham redundancy cases, the relevant claim is for unfair dismissal. This means showing that your employer did not have a valid reason for dismissing you, or did not follow a fair redundancy process.
To understand more about what counts as unfair dismissal and how to make a claim, see Unfair Dismissal Claims.
Types of Claims Relevant to Sham Redundancy
The most common type of claim in these situations is unfair dismissal. You may also have a claim if you believe you were selected for redundancy due to a protected characteristic (such as age, gender, race, or disability), which could amount to discrimination. In some cases, if your employer has failed to follow proper redundancy procedures, you might also be able to claim for a breach of contract or wrongful dismissal.
For a detailed guide on preparing your case and understanding the legal landscape, you might find it helpful to read How to Win Your Redundancy Case.
Support and Legal Advice
Making a claim to an employment tribunal can feel daunting, but support is available. You can seek free advice from organisations such as Acas, or consult a solicitor who specialises in employment law. Many people also find it useful to talk to their trade union, if they are a member. Legal advice can help you assess the strength of your case, gather evidence, and prepare your claim effectively.
How to Make a Claim
To start your claim, you need to complete and submit a specific form to the tribunal. The main form used is the Form ET1: Claim form for an Employment Tribunal, which allows you to set out your case and the details of your complaint. This form is essential for anyone who believes they have been treated unfairly by their employer, including those contesting a sham redundancy.
Time Limits
It’s important to act quickly if you wish to challenge a sham redundancy. Employment tribunal claims for unfair dismissal or discrimination must usually be submitted within three months less one day from the date your employment ended. If you miss this deadline, your claim may not be considered, except in very limited circumstances.
If you’re unsure whether you have a valid claim or need help with the process, seeking advice early can make a significant difference. Taking prompt action will help protect your rights and give you the best chance of a successful outcome.
What You Can Do After Being Dismissed
After being dismissed through redundancy – especially if you suspect the process was not genuine – it’s important to take practical steps to protect your rights and secure your financial future. Here’s what you can do next:
1. Review Your Dismissal and Understand Your Rights
First, carefully review the circumstances of your redundancy. UK employment law requires employers to follow fair redundancy procedures, including proper consultation and selection processes. If you believe your redundancy was a sham or handled unfairly, you may have grounds to challenge it as an unfair dismissal. Take time to gather any evidence, such as emails, meeting notes, or witness statements, that could support your case.
Understanding your rights after dismissal is crucial. You have the right to request a written statement from your employer explaining the reasons for your redundancy. If you feel the redundancy process was not genuine, you can appeal the decision internally or make a claim to an employment tribunal.
2. Consider Your Financial Options
Losing your job can create immediate financial pressure. You may be entitled to redundancy pay, notice pay, and accrued holiday pay. If your employer is insolvent and unable to pay what you’re owed, you can apply to the government for these payments.
It’s also important to explore your entitlement to benefits. Many people who have lost their job due to redundancy are eligible for support such as Universal Credit, New Style Jobseeker’s Allowance (if you’re working less than 16 hours a week), Pension Credit (if you’re of pension age), or Housing Benefit. If you’re disabled, a carer, or supporting a family, there may be additional help available.
For a step-by-step overview of what you can claim, see the official Guidance on claiming benefits after redundancy. This resource explains how to report your job loss, declare any redundancy pay, and what to do if you were on furlough before being made redundant. It also covers how redundancy can affect your workplace pension and where to get free pension advice if you’re over 50.
If you want more detailed information about claiming benefits specifically after being dismissed, our guide on Claiming Benefits After Being Sacked explains the process and what to expect.
3. Plan Your Next Steps
While managing your immediate financial needs, it’s a good idea to start planning your next steps. This might include updating your CV, searching for new work, or seeking training to improve your skills. The government’s redundancy guidance also offers tips on finding work and managing debts.
If you’re considering challenging your redundancy, you may want to seek legal advice or support from a union representative. Employment tribunals can be complex, but with the right preparation and understanding of your rights, you can improve your chances of a successful outcome. For further insights on how to approach your case and what to consider, visit How to Win Your Redundancy Case.
4. Don’t Delay Taking Action
There are strict time limits for contesting unfair redundancies – usually three months less one day from the date your employment ended. Acting quickly ensures you don’t miss your chance to challenge an unfair or sham redundancy.
Taking these steps can help you regain control after a difficult dismissal and ensure you receive any financial support or compensation you’re entitled to. If you need more help, you can use benefit calculators or request a home visit from a Department for Work and Pensions (DWP) officer, especially if you require extra support with your claim.
Additional Resources and Guidance
If you are concerned that your redundancy may not be genuine, it’s important to understand both your rights and your employer’s responsibilities. There are a number of resources and guidance materials that can help you navigate this situation.
For a deeper understanding of what employers must do to ensure redundancies are fair and lawful, you can review the Employer Guide to Making Positions Redundant by Restructuring. This guide explains the correct procedures, including consultation requirements, selection criteria, and the need to avoid discrimination. By familiarising yourself with these processes, you can better identify if your employer has followed the rules or if there are signs your redundancy might be a sham.
If you want to know more about how employers can avoid unfair or sham redundancies, the section on Avoiding Unfair or Sham Redundancies provides practical advice on what constitutes a genuine redundancy situation. This can help you compare your own experience to best practice and spot any irregularities.
Employees and employers alike have specific legal rights and obligations during redundancy. For a broader overview of these, including guidance on fair treatment and resolving disputes, see Employer Specific Guidance. This resource covers the legal framework around redundancies, including your right to challenge decisions you believe to be unfair.
If you remain unsure about your situation or believe your redundancy is not genuine, it is wise to seek professional advice. Employment law can be complex, and a solicitor or trade union representative can offer tailored support. Acting promptly can help protect your rights and ensure you take the correct steps to challenge a sham redundancy.
