What is Sham Redundancy?
A sham redundancy occurs when an employer claims to be making a role redundant, but the redundancy is not genuine. Instead, the process is used as a cover for dismissing an employee unfairly or for reasons unrelated to a real reduction in work or organisational need. This is different from a genuine Redundancy, where a job truly no longer exists due to business changes, such as restructuring, closure, or a reduced need for certain roles.
Employers might use sham redundancy to sidestep proper disciplinary procedures, remove an employee they no longer want, or replace them with someone else – sometimes at a lower cost. In these cases, the redundancy process is misused, and the legal protections for employees are not properly followed.
Recognising sham redundancy is important because it affects your employment rights. If you suspect your redundancy is not genuine, you may have grounds to challenge it as an unfair dismissal. You can learn about legal rights around dismissal and how to take action if you believe your employer is acting unfairly.
Understanding the difference between genuine and sham redundancy is crucial. For an overview of your rights, statutory payments, and the redundancy process, you can refer to the official GOV.UK guidance on redundancy. This resource explains what you are entitled to and what to expect if you are facing redundancy.
How to Spot Sham Redundancy
When facing redundancy, it’s important to know whether your employer is following the law or using redundancy as an excuse for dismissal. Sham redundancy occurs when the stated reason for redundancy isn’t genuine – perhaps your role still exists, or your employer is simply trying to avoid proper dismissal procedures. Common signs of sham redundancy include your job being advertised shortly after you leave, only certain individuals being targeted, or the selection process lacking transparency.
A legitimate redundancy process requires fair selection, proper consultation, and adherence to legal requirements set out in the Employment Rights Act 1996. If these steps are skipped or manipulated, it may indicate a sham redundancy. Identifying these warning signs early is crucial, as it can help you challenge an unfair dismissal and protect your rights at work.
For a more detailed breakdown of the warning signs and what to look for, visit our guide on Spotting Sham Redundancy. You may also want to explore related legal topics to understand your rights around notice periods and termination.
Your Rights if You Suspect Sham Redundancy
If you suspect your redundancy is not genuine, it’s important to know that UK law offers strong protections against unfair dismissal disguised as redundancy. Employers must follow fair procedures and have a genuine reason for making a role redundant. If they use redundancy as a cover to dismiss you for other reasons, this could be classed as unfair dismissal.
Under the Employment Rights Act 1996 Section 94, employees have the right not to be unfairly dismissed. This means your employer must show that your redundancy is real – for example, that your job will genuinely no longer exist, or the business is changing in a way that affects your role. If the redundancy process seems rushed, lacks proper consultation, or your job is quickly filled by someone else, these could be signs of a sham redundancy.
If you believe your redundancy is not genuine, start gathering evidence. Keep records of communications with your employer, note any inconsistencies, and collect documents related to your redundancy. This information can help you challenge the decision if needed.
Understanding your legal rights is the first step in protecting yourself. If you want to learn more about your options or how to challenge an unfair dismissal, explore our related legal topics for further guidance.
Challenging Sham Redundancy
If you suspect your redundancy is not genuine, it’s important to act promptly and understand your options. UK law requires employers to follow fair procedures and only make redundancies for genuine business reasons. If you believe your dismissal is a sham redundancy – where redundancy is used as a cover for unfair dismissal – you have the right to challenge it.
Start by raising your concerns with your employer and ask for clear reasons and evidence supporting your redundancy. If you are not satisfied with their response, you can use your company’s internal grievance procedures. Employers must follow the ACAS Code of Practice on Disciplinary and Grievance Procedures, which sets out the minimum standards for handling such issues at work.
If internal steps do not resolve the issue, you may be able to take your case to an employment tribunal. For more on the process, see How to make a complaint to an employment tribunal. Outcomes of a successful challenge can include reinstatement to your job or financial compensation.
For a step-by-step guide on how to proceed, including what evidence you’ll need and how to prepare your case, visit our detailed page on Challenging Sham Redundancy.
You may also find it helpful to explore How to Win Your Redundancy Case for practical tips, or Learn about related laws to understand your rights around unfair dismissal.
Legal Protections and Employment Rights Related to Sham Redundancy
When facing redundancy, UK employment law offers strong protections to ensure the process is fair and genuine. Under the Employment Rights Act 1996, you have the right not to be unfairly dismissed, and this includes situations where redundancy is used as a cover for dismissal – known as sham redundancy. Employers must follow fair procedures, including proper consultation, to show that a redundancy is genuine and not simply a way to remove an employee for other reasons.
A key part of a fair redundancy process is meaningful consultation. Your employer should inform you about the reasons for redundancy, discuss alternatives, and consider your ideas. To help you prepare, see the Key Redundancy Consultation Questions for Fair Treatment for guidance on what to ask and expect during this stage.
If your employer is making 20 or more staff redundant within 90 days, special rules apply. Learn more about your rights in these situations by visiting Collective Redundancies.
You may also be entitled to redundancy pay if you’ve worked for your employer for at least two years. For details on eligibility and timing, see Redundancy Pay Eligibility and Timeline, or use the official Redundancy Pay Calculator to estimate your statutory redundancy pay.
Employers should also consider offering you suitable alternative employment if possible. If you’re unsure about accepting a new role, find guidance at Refusing Suitable Alternative Employment.
If you suspect your redundancy is not genuine and may be a case of unfair dismissal, you have the right to challenge it. For more on your options and next steps, explore Related legal topics.
Redundancy can be stressful and affect your mental wellbeing. It’s important to know your rights and seek support if needed. For advice and resources, visit Mental Health and Work: Your Rights.
Additional Support and Resources
If you suspect your redundancy is not genuine, it’s important to seek advice as soon as possible. You can contact your trade union, Citizens Advice, or an employment law specialist to discuss your situation and understand your options. The law protects employees from unfair dismissal under the Employment Rights Act 1996, and you may be entitled to challenge your dismissal if redundancy is being used as a cover for another reason.
If you have lost your job and are unsure about your financial situation, you may be eligible for support. Our guide on Claiming Benefits After Being Sacked explains what benefits you can claim and how the process works if you are dismissed or made redundant.
Employers also have legal responsibilities when making redundancies. If you are an employer or want to understand your rights and obligations from an employer’s perspective, see our Employer Specific Guidance for clear, practical information.
For a deeper understanding of your employment rights and how to challenge an unfair dismissal, you can learn about related laws that may apply to your case. These resources can help you navigate the process and ensure your rights are protected.
