What is Sham Redundancy?
A sham redundancy occurs when an employer claims that a job role is no longer needed, but in reality, the dismissal is for another reason entirely. Instead of following the proper process for redundancy – which is a genuine reduction or reorganisation of the workforce – the employer may be trying to disguise an unfair dismissal, avoid dealing with performance issues, or remove a particular employee for personal reasons.
This practice is not just unethical; it is also unlawful. Under the Employment Rights Act 1996, employees have the right to fair treatment during redundancy processes. If a redundancy is not genuine, it may be challenged as an unfair dismissal, and employees could be entitled to compensation or reinstatement.
Sham redundancy matters because it undermines your legal protections at work. If your employer is using redundancy as an excuse to dismiss you for reasons such as discrimination, whistleblowing, or simply to avoid proper disciplinary procedures, you may be losing your job unfairly and missing out on redundancy pay or other entitlements.
Spotting sham redundancy can be difficult, but there are warning signs to look out for. For example, if your job is advertised again shortly after your dismissal, or if other employees are hired to do similar work, this could suggest the redundancy was not genuine. Likewise, if you are the only person selected for redundancy without a clear business reason, or if the consultation process was rushed or incomplete, you may have grounds to question your employer’s motives.
If you suspect sham redundancy, it’s important to act quickly. You have the right to challenge your dismissal, raise a grievance, or take your case to an employment tribunal. Understanding how employers should handle restructuring can help you identify when the process is not being followed properly. For more on this, see our guide to Avoiding Unfair or Sham Redundancies.
To learn more about your rights and the legal definition of redundancy, visit our main Sham Redundancy page for a broader overview and further guidance.
Common Signs of Sham Redundancy
Spotting a sham redundancy can be challenging, especially if you are not familiar with your rights or the proper process. However, there are several warning signs that may suggest your redundancy is not genuine. Understanding these can help you decide your next steps and protect yourself from unfair dismissal.
1. Jobs Advertised or Filled Soon After Redundancy
If your employer makes your role redundant, but then advertises a similar position or hires someone else to do the same work shortly afterwards, this is a strong indication that the redundancy may not be genuine. Redundancy should mean that your job is no longer needed. If the work still exists and is simply given to someone else, your dismissal could be classed as unfair.
2. Lack of Genuine Consultation or Proper Redundancy Procedure
Employers are legally required to follow a fair redundancy process. This includes meaningful consultation with affected employees, providing clear reasons for the redundancy, and considering alternatives to redundancy. If you were not properly consulted, or if the process felt rushed or secretive, this could point to a sham redundancy. In larger-scale situations, different rules may apply – see how these requirements compare in cases of Collective Redundancies.
3. Unexplained Selection Criteria or Unfair Treatment
When more than one employee is at risk of redundancy, employers must use fair and objective selection criteria. If your employer cannot explain how or why you were selected, or if the criteria seem unfair or discriminatory, this could suggest the redundancy is a cover for another reason, such as performance issues or personal conflicts. The law protects you from being selected for redundancy based on discriminatory grounds, such as age, gender, or maternity leave.
4. Employer Continues the Same Work with Other Employees or Contractors
A genuine redundancy happens when the work you do is no longer required. If, after your dismissal, the same tasks are being carried out by remaining staff or outsourced to contractors, this may indicate that your redundancy was not legitimate. This is especially relevant if your employer simply redistributes your duties to others without reducing the overall workload.
5. Sudden Changes in Business Needs That Do Not Match Redundancy Claims
Employers may claim that changes in business needs, such as financial difficulties or restructuring, are the reason for redundancies. However, if these changes are not clearly explained, or if the business continues as usual without any obvious impact, you may have reason to question whether the redundancy is genuine. Watch out for vague or inconsistent explanations, or if the business appears to be expanding rather than contracting.
If you notice any of these signs, it’s important to seek advice and gather evidence. You have the right to challenge a sham redundancy and may be able to claim unfair dismissal at an employment tribunal. Understanding the process and your legal protections is the first step towards ensuring your rights are respected.
How to Protect Yourself if You Suspect Sham Redundancy
If you suspect your redundancy is not genuine, it’s important to take proactive steps to protect your rights and build a clear record of what’s happening. Here’s how you can safeguard yourself if you think you’re facing a sham redundancy:
1. Keep Detailed Records
Start by keeping copies of all communications related to your redundancy. This includes emails, letters, meeting notes, and any documents your employer provides. Make your own notes after any conversations or meetings, recording dates, times, and what was discussed. Having a clear paper trail can be invaluable if you need to challenge your dismissal later.
2. Ask Direct Questions During Consultation
During the redundancy consultation process, don’t hesitate to ask for specifics about why your role is at risk. Questions like “What business reasons are behind this redundancy?” or “Are there alternatives to redundancy being considered?” can help clarify whether your employer is following a fair process. For more ideas on what to ask, see Key Redundancy Consultation Questions for Fair Treatment.
It’s also important to understand your rights during this stage. Employers are legally required to consult with you if you’re being made redundant. For official information on what a proper consultation involves and your rights during this process, check the Guidance on Redundancy Consultation.
3. Seek Early Advice
If you feel uncomfortable or believe the redundancy process isn’t being handled properly, seek advice as soon as possible. You can speak to a trade union representative if you are a member, contact an employment advisor, or consult a legal expert specialising in employment law. Early advice can help you understand your options and avoid missing important deadlines.
4. Know Your Legal Rights
Employees have the right to fair redundancy procedures and protection from unfair dismissal under the Employment Rights Act 1996. This means your employer must have a genuine reason for redundancy, follow a fair selection process, and consult with you properly. If you have worked for your employer for at least two years, you may also be entitled to statutory redundancy pay. You can check your entitlement using the Redundancy Calculator.
If your employer is making 20 or more employees redundant at the same time, additional rules for collective redundancies apply, including specific consultation requirements. Learn more about these processes and common issues by visiting Common Issues and Concerns in Collective Redundancy.
5. Take Action if You Suspect Unfair Dismissal
If you believe your redundancy is a sham or you’ve been unfairly selected, you may have grounds to challenge the decision. You can raise a formal grievance with your employer and, if necessary, consider making a claim to an employment tribunal. Remember, strict time limits apply for bringing claims, so act promptly.
By staying informed, keeping thorough records, and seeking advice early, you can protect your rights and take appropriate action if you suspect your redundancy is not genuine. For further guidance, explore the resources linked above and make sure you understand the full scope of your employment rights.
What to Do if You Think Your Redundancy is a Sham
If you suspect your redundancy is not genuine, it’s important to take action quickly and carefully. Here are the key steps you should consider if you believe your redundancy is a sham:
1. Review Your Situation and Gather Evidence
Start by collecting all relevant information about your redundancy. This could include:
- Your redundancy letter and any correspondence with your employer
- Notes from meetings about the redundancy process
- Records of your job performance and recent appraisals
- Details of any new hires or changes in your workplace that suggest your role still exists or has been replaced
Look for signs that the redundancy may be a cover for dismissal, such as your duties being given to someone else, your role being advertised soon after your departure, or the selection process being unclear or unfair. Evidence is crucial if you decide to challenge your redundancy.
2. Raise Your Concerns Formally
If you think your redundancy is not genuine, you should raise your concerns with your employer. This usually means following your workplace’s grievance procedure. If your employer does not have a formal process, you must still follow the minimum standards set out in the ACAS Code of Practice on Disciplinary and Grievance Procedures. This code outlines how grievances should be handled fairly and transparently.
To start, you may wish to use a Form to Raise a Grievance to put your concerns in writing. Clearly explain why you believe the redundancy is a sham, include any evidence you have gathered, and state what outcome you are seeking (such as reinstatement, compensation, or a fair redundancy process).
3. Seek Legal Advice
It’s a good idea to get independent legal advice as soon as possible. An employment law specialist can help you understand your rights, assess the strength of your case, and guide you through the process of challenging your redundancy. They can also help you prepare for any meetings with your employer or for a potential employment tribunal claim.
4. Consider an Unfair Dismissal Claim
If your employer does not resolve your concerns through the grievance process, you may be able to bring a claim for unfair dismissal. Under the Employment Rights Act 1996, employees who have been employed for at least two years have the right not to be unfairly dismissed. If your redundancy is a sham, a tribunal may find that your dismissal was not for a genuine redundancy reason and was therefore unfair.
Tribunals will look at whether your employer followed a fair redundancy process, consulted with you properly, and considered alternatives to redundancy. If you win your case, you could be awarded compensation or, in some cases, reinstated to your job.
5. Learn More About Your Options
Challenging a sham redundancy can be complex, but you don’t have to face it alone. For more detailed guidance on the steps you can take, see our page on Challenging Sham Redundancy. This resource covers the process in greater depth, including what to expect from your employer and how to prepare for a tribunal.
6. Understand the Legal Landscape
It may also help to understand how employers are expected to avoid unfair or sham redundancies in the first place. For a comparison of best practices and the legal requirements employers must follow, visit our guide to Avoiding Unfair or Sham Redundancies.
Taking these steps gives you the best chance of protecting your rights and ensuring any redundancy is handled fairly and lawfully. Remember, acting promptly and following the correct procedures is essential for a successful challenge.
Additional Support and Practical Advice
Facing redundancy can be overwhelming, but there are practical steps you can take to protect your wellbeing and financial security during this challenging time. If you believe your redundancy is not genuine, it’s important to know that you’re not alone and support is available.
Claiming Benefits After Redundancy
If you lose your job due to redundancy, you may be entitled to claim benefits to help cover your living costs while you look for new work. This could include Universal Credit, Jobseeker’s Allowance, or other support depending on your circumstances. To understand what you might be eligible for and how to apply, see our guide on claiming benefits after being sacked. Even if your redundancy is under dispute, you can usually begin the benefits process straight away.
Managing Stress and Looking After Your Wellbeing
Redundancy can be a stressful experience, especially if you suspect it’s not genuine. It’s normal to feel anxious or uncertain, but there are ways to manage stress and protect your mental health. Try to maintain a routine, reach out to friends or family for support, and consider speaking to a professional if you’re finding it particularly difficult. Remember, taking care of your wellbeing is just as important as addressing the legal aspects of redundancy.
Understanding Proper Redundancy Procedures
Knowing your rights can help you spot sham redundancy and respond appropriately. Employers must follow a fair process, including genuine consultation, clear selection criteria, and consideration of alternative roles. For a detailed overview of what proper redundancy should look like from an employer’s perspective, read our Employer Guide to Making Positions Redundant by Restructuring. This can help you identify whether your employer has acted lawfully.
If you want to explore your options after redundancy, including appealing the decision or seeking further legal advice, visit the Support and Next Steps After Redundancy section of our employer guide. This resource offers additional guidance on what to do if you believe your redundancy was unfair or a sham.
Don’t Face Redundancy Alone
You have the right to seek advice and support if you’re unsure about your redundancy or feel you’ve been treated unfairly. Speaking to a union representative, trusted colleague, or legal adviser can make a significant difference. Remember, taking action early and accessing the right information can help you protect your rights and move forward with confidence.
