Fair redundancy or unfair dismissal?
Redundancy is sometimes necessary, but fair, transparent processes are vital to avoid legal and financial risks, Caroline Reidy reports
Print28 December 2025
Letting staff go due to redundancy is sometimes an unavoidable part of doing business, especially in today’s unpredictable economic environment. In Ireland, many companies are having to make tough decisions as global uncertainty and rising costs drive the need for restructuring. Big-name firms like TikTok, PayPal, Meta, and Indeed have all made headlines recently due to the requirement for them to make job cuts.
While redundancy is a legitimate reason to end employment, it also comes with significant legal risks. If employers don’t handle the process fairly, they could face claims under the Unfair Dismissals Act 1977. The consequences could include potential damage to your company’s reputation and costly compensation payouts.
Under the Unfair Dismissals Act 1977, all dismissals are presumed to be unfair unless the employer can prove otherwise, making it essential for businesses to approach redundancy with caution and clarity. While redundancy is one of the few legally accepted grounds for dismissal, it must be both genuine and handled in strict accordance with fair procedures to be valid.
This means employers must go beyond simply identifying roles at risk; they must also ensure transparency and fairness throughout the process. Key steps include providing employees with adequate training on relevant procedures, applying clear and objective selection criteria that can be justified if challenged, and meticulously documenting every decision, meeting, and communication related to the redundancy.
Even when the redundancy itself is legitimate, failing to follow a fair and consistent process can still lead to a successful claim for unfair dismissal, with significant legal and financial consequences for the employer.
Legislative Update: The 2024 Redundancy Reforms
The Employment (Collective Redundancies and Miscellaneous Provisions) and Companies (Amendment) Act 2024 commenced on 1 July 2024, and was introduced in direct response to past high-profile insolvency cases like Debenhams and Clery’s, where employees were made redundant with little to no consultation.
The Act now mandates at least 30 days of consultation and the provision of “all relevant information”, even where insolvency is involved. These reforms are designed to promote transparency, with the aim of ensuring that workers are treated with dignity and respect during times of business upheaval.
Case law reinforces and reminds us of the importance of fairness within redundancy processes. In JVC Europe Ltd v Panisi, the Employment Appeals Tribunal held that, even where redundancy was genuine, the employer’s failure to consult with the employee rendered the dismissal unfair.
More recent decisions from the Workplace Relations Commission continue to echo this message. In Kevin Foley v Digital River Ireland Ltd, the WRC awarded nearly €170,000 after finding that the appeal process during Foley’s redundancy lacked proper engagement and fairness.
Gary Rooney, a senior employee at Twitter/X’s European headquarters in Dublin, was awarded over €550,000 after being unfairly dismissed. Rooney did not respond to an email from Elon Musk requiring staff to commit to an “extremely hardcore” work ethic. His lack of response was interpreted as a resignation, leading to his dismissal. The WRC found that this constituted an unfair dismissal.
These cases demonstrate how failing to explore alternatives or apply a fair selection process can lead to large awards for unfair dismissal. Employers must also remain mindful of their obligations under the Protection of Employment Act 1977, particularly in cases of collective redundancy.
The Act requires notification to the Minister for Enterprise, Trade and Employment, alongside consultation with employee representatives. Skipping these procedural steps not only exposes the company to legal risk but also undermines employee morale and public trust.
Redundancy may be necessary, but a fair, well-documented process is essential to safeguard both your business and your people.
Best Practice for Employers During Redundancy
- Emphasise fairness, transparency and compliance
To minimise the risk of unfair dismissal claims during a redundancy process, employers should adopt a best-practice approach that emphasises fairness, transparency, and compliance. This begins with thorough planning to clearly outline the business rationale for the redundancy, the selection process, and a consistent communication strategy.
2. Engage in meaningful consultation
Employers should also engage in meaningful consultation with affected employees. While this is legally required in collective redundancy cases, it is considered best practice even in smaller-scale.
redundancy situations. Selection criteria must be objectively justifiable, using measurable data such as performance metrics, length of service and care should be taken to avoid over-reliance on any one factor.
3. Explore alternatives
Where possible, alternatives to redundancy should be explored, such as redeployment to other roles and/or reducing working hours. Throughout the process, meticulous documentation is essential. Employers should maintain accurate records of meetings, selection matrices, correspondence, and any employee feedback or responses to ensure transparency and accountability if the process is ever called into question.
4. Document everything
And finally, remember to document everything. Keep detailed records of decisions, consultations, selection processes, and correspondence. This not only strengthens your legal position but also demonstrates a responsible and people-centred approach to organisational change.
If you require further support or advice relating to HR, please do not hesitate to contact us at hrsolutions@nfpireland.ie / (066)7102887.
For more information visit https://nfpireland.ie
Caroline Reidy, Head HR Solutions, HR and Employment Law Specialist
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