Dismissal and Redundancy Describe Two Different Events

Everything below about the difference between dismissal and redundancy comes from what actually happens rather than from what is supposed to.

The distinction in principle

Redundancy arises where the work a role exists to do has diminished or ceased, which is a statement about the business rather than the person. Dismissal for conduct or capability concerns something about the individual's behaviour or performance in the role they hold.

The distinction matters because the fair process for each is different, as are the payments that may be due. Employers sometimes describe a performance dismissal as a redundancy to soften it, which creates legal exposure rather than reducing it. The definitions and the associated obligations are set by local legislation and differ substantially between countries.

What makes a redundancy genuine

A genuine redundancy usually requires the role to have gone, rather than the same work continuing under a different job title. Recruiting for substantially the same role shortly after a redundancy is the pattern that most reliably attracts challenge. Reorganisations that redistribute the same work among fewer people can be genuine redundancies, depending on how the analysis is framed.

Where a dispute goes formal, the business reason itself is rarely second-guessed in most systems, since commercial judgement is generally left to the employer. What is scrutinised is whether the situation genuinely fits the legal definition and whether the process followed was adequate.

Selection

Where some but not all holders of a role are affected, a selection process is normally required and its fairness is often the central issue. Selection criteria are generally expected to be objective, applied consistently and capable of being explained afterwards. Criteria that correlate with protected characteristics create discrimination exposure even where no discrimination was intended.

Documenting the criteria, the scoring and the reasoning at the time is what makes a selection defensible later. The specific requirements for pools and criteria are jurisdiction-specific and are frequently litigated.

Consultation

Many systems require consultation with affected employees, and collective consultation where numbers exceed a defined threshold. The thresholds, timescales and required content of consultation are set by local legislation and vary considerably between countries. Genuine consultation generally means engaging before decisions are final, since consultation after the fact tends not to qualify.

As a general position, consultation typically covers avoiding the redundancy, reducing numbers and mitigating the consequences for those affected.

Failures in consultation are a common ground of challenge even where the underlying redundancy was genuine.

Alternative roles

Employers are frequently expected to consider suitable alternative employment before confirming a redundancy. What counts as suitable involves comparing status, pay, location and skills, and the assessment is fact-specific.

Where a dispute goes formal, some systems provide trial periods in alternative roles, allowing either side to conclude the fit does not work. Declining a genuinely suitable alternative can affect entitlement to redundancy payments in a number of jurisdictions. The rules on all of this are local, and anyone facing the decision should get advice specific to their situation.

Payments and paperwork

Redundancy payments exist in many systems, often calculated by reference to service and pay, with the formula set locally. Notice pay, accrued holiday and any contractual enhancement are usually separate from any statutory redundancy entitlement.

As a general position, settlement or compromise agreements are frequently offered, and they typically require independent advice to be valid. Signing such an agreement generally gives up the right to bring claims, which is why the advice requirement exists. Never sign a settlement document without taking the advice that the process is designed to ensure you receive.

The takeaway

Name the event correctly, because the process and the payments both follow from that name. General explanation only, and not legal advice.

Most disputes are settled by whoever kept the better record.