Dismissals that comply with redundancy law are potentially fair. However, every case is different, and the ultimate determination of fairness depends on the facts of each dismissal. Under The Employment Rights Act 1996 which is the main legislation governing redundancy law, the Employment Tribunal is required to determine whether the dismissal was fair and reasonable by considering issues such as the size of the business and the employer's administrative resources.

An employee who wishes to seek a payment under redundancy law must meet both of the following criteria in order to qualify:

• The applicant cannot be self-employed; he must be an employee of the business.
• The applicant must have been continuously employed by the business for at least two years.

Current redundancy law requires employers to provide a detailed explanation of the calculations performed in order to arrive at the amount of the payment. The employee can dispute the proposed amount by making an application to the Employment Tribunal within six months of the date of the dismissal. The payment amount depends on the applicant's age and their length of service. In any event, there is a statutory cap on the amount of money the applicant can receive. In addition the maximum weekly pay award is capped, even if the applicant's actually weekly wage is higher. If the applicant's weekly wage is lower than the cap, then the actual amount is used. The following redundancy law formula is used to calculate payments:

• 20 is the maximum number of years of employment which may be counted .
• Half a week's pay for each year during the employment that the employee was over 18 but under 22.
• One week's pay for each year during the employment that the employee was over 22 but under 41.
• One and a half week's pay for each year during the employment that the employee was over 41.

In order to qualify for payments under current redundancy law, the dismissal must have occurred for one of two reasons. One qualifying reason for termination is that the entire business closed. The other is that there is a reduced need for workers in the employee's particular field. Not all redundancy terminations are legitimate. Sometimes employers use the reason as an excuse when they want to terminate an employee but have no justification for it. The employer puts forth the redundancy claim because redundancy law payments are much less than those awarded for an unfair dismissal. In either situation, the employee can apply to the Employment Tribunal for unfair dismissal. As previously mentioned, the awards paid out for unfair dismissal claims are generally much higher than those paid under redundancy law.

In deciding whether an employee's dismissal was fair, the Employment Tribunal has certain criteria they must take into consideration:

• Was the employee or the applicable Trade Union given adequate and reasonable notice of the impending dismissal?
• Was fair selection criteria applied when choosing which employee to terminate?
• Did the employer adequately consider the employee's work record before selecting him for dismissal?
• Did the employer give sufficient consideration to possible alternative jobs available within the business?

Rather than terminating the employment, an employer sometimes offers the employee an alternative job within the business. If the employee refuses to take the alternative employment, then he cannot make a redundancy claim. The exception is if the employee refuses the alternative job on the grounds of personal circumstances and family commitments. The employee's other option is to take the job and assess it during a 4-week trial period. Should the employee find the job unsuitable during this evaluation, he then has the right to bring forth a claim for a redundancy payment.