Redundancy is an unfortunate but sometimes necessary aspect of managing a workforce, especially in times of organisational change. However, it becomes significantly more complex when an employee is off work due to illness.
One common question employers and employees alike ask is: Can you be made redundant while on sick leave in the UK? The short answer is yes — but with very specific legal obligations and processes involved.
This article explores what the law says about redundancy during sick leave, how it affects employees, and the correct procedures that employers must follow to avoid legal repercussions.
What Does UK Employment Law Say About Redundancy During Sick Leave?
Under current UK employment law, it is legal to make an employee redundant while they are off work due to illness. However, the redundancy must be genuine and not connected to the employee’s health condition or absence.
A genuine redundancy typically arises when a business undergoes restructuring, experiences a downturn in work, or completely shuts down.
Employers are required to ensure the decision is based on business needs rather than on the employee’s capability to work. If an employer makes a redundancy decision that is even partially influenced by the employee’s health, it may be classed as discriminatory under the Equality Act 2010. This is particularly significant if the employee’s illness qualifies as a disability.
The Employment Rights Act 1996 further obligates employers to carry out a fair and consistent dismissal process. Failing to do so can give rise to claims of unfair dismissal.
Employment tribunals closely scrutinise cases where employees are dismissed during periods of ill health, especially if the employer cannot prove that redundancy was the only viable option.
Can You Be Consulted for Redundancy While on Long-Term Sick Leave?
Consultation is a legal requirement in the redundancy process and it applies to all employees, including those who are on long-term sick leave.
Employers must inform affected employees about the redundancy proposal and give them an opportunity to provide feedback, raise concerns, or suggest alternatives.
For employees on sick leave, adjustments may need to be made to ensure meaningful consultation. These can include:
- Communicating by post or email if the employee cannot attend in-person meetings
- Offering video calls as an alternative method of consultation
- Allowing representation by a colleague or trade union official if direct involvement is difficult
Employees should receive the same level of information and updates as their colleagues who are actively working. Excluding or isolating someone from the consultation process due to their health status could lead to allegations of unfair treatment.
What Is a Fair Redundancy Process for Employees on Sick Leave?
A fair redundancy process is essential to ensure that employees on sick leave are treated lawfully and ethically. Employers must be able to demonstrate that they followed a consistent, impartial, and well-documented approach throughout the redundancy procedure.
Below are the key stages of a fair redundancy process with specific considerations for employees who are absent due to illness.
Identifying a Genuine Business Reason
The foundation of any fair redundancy process is the existence of a legitimate business need. Redundancy must be based on factors such as:
- A reduced requirement for employees to carry out specific work
- Business closure or relocation
- Financial constraints leading to restructuring
- Technological changes making roles obsolete
It is unlawful to use an employee’s health condition or long-term sickness as the reason for redundancy. Employers must keep detailed records showing that the redundancy decision was tied to business needs, not personal circumstances.
Establishing a Suitable Redundancy Pool
The redundancy pool refers to the group of employees from which the redundancies will be selected. Employers must ensure that the pool includes all employees performing similar roles, including those who are currently off sick.
Excluding an employee from the redundancy pool because they are on long-term sick leave could result in claims of discrimination or unfair dismissal. Even if a role is unique, employers should document why the pool is limited to a single individual.
Applying Fair and Objective Selection Criteria
Once the pool has been identified, fair and measurable criteria should be applied to select which employees will be made redundant. These criteria may include:
- Skills and qualifications relevant to current or future business needs
- Job performance and experience
- Attendance records (excluding sickness related to disability or long-term illness)
- Disciplinary records (if applicable)
Employers must avoid using sick leave itself as a negative criterion unless it relates to patterns of non-health-related absences and is applied consistently across all staff. If the absence is linked to a disability, different rules apply under the Equality Act 2010, and adjustments may be needed.
Consulting the Employee Effectively
Consultation is a legal and essential step in the redundancy process. Employees on sick leave have the same right to be informed and consulted as those in the workplace. The aim is to discuss the reasons for redundancy, explore possible alternatives, and understand any concerns the employee may have.
Employers should consider flexible methods of communication such as:
- Sending detailed letters or emails outlining the situation
- Offering phone or video calls for consultation meetings
- Involving a trade union representative or chosen colleague if preferred by the employee
Consultation should not be treated as a one-off event. Employers are encouraged to hold multiple meetings and provide adequate time for the employee to process the information and respond.
Exploring Alternatives to Redundancy
Employers have a duty to explore suitable alternatives to redundancy, including:
- Redeploying the employee into another available role
- Making reasonable adjustments to accommodate a return to work
- Offering part-time or flexible working options if appropriate
In the case of employees on long-term sick leave, employers should seek medical advice (usually via occupational health) to understand whether the employee might return to work and what accommodations might be necessary.
Failure to offer suitable alternatives or explore all options may result in a redundancy being judged as unfair by a tribunal.
Issuing Redundancy Notice and Providing Support
Once a final decision is made, the employer must provide written notice of redundancy and explain the entitlement to statutory or contractual redundancy pay. The notice must be provided in accordance with the employee’s contract or statutory requirements, whichever is more generous.
Support should also be offered during this phase, including:
- Information on how redundancy pay is calculated
- Guidance on accessing job search or outplacement services
- Assistance in applying for benefits or exploring other employment opportunities
The employee should be given a clear explanation of their rights, any appeals process, and how to raise concerns if they believe the process was unfair.
Keeping Clear Records and Documentation
Employers must document every step of the process, especially when dealing with employees on sick leave. This includes:
- Minutes from consultation meetings
- Copies of letters and notices
- Notes from occupational health assessments
- Justifications for selection criteria and scoring
These records are critical in demonstrating that the process was fair, lawful, and consistent. They can also be used to defend the employer in the event of a tribunal claim.
Are Employees on Sick Leave Still Entitled to Statutory Redundancy Pay?
An employee’s entitlement to statutory redundancy pay is not affected by their sick leave status. The only condition is that the employee must have completed at least two years of continuous service with the employer.
Statutory redundancy pay is calculated based on three key factors: the employee’s age, length of service, and gross weekly pay up to the statutory cap. As of April 2025, the weekly pay cap is £700.
Being on statutory sick pay or receiving other medical benefits does not reduce or eliminate the right to redundancy pay. However, employees should be aware that any enhanced redundancy terms mentioned in their contract could be subject to different rules depending on company policy.
The law ensures that employees are not financially penalised simply because they were unwell at the time of redundancy. Employers must calculate redundancy pay fairly and provide it at the same time they would for an employee who is currently in work.
How Is Redundancy Pay Calculated for Employees on Sick Leave?
Redundancy pay is calculated using a set structure that is applied universally across the UK. This includes employees who are currently on leave due to sickness.
The calculation formula remains consistent and focuses on the employee’s age, length of continuous service, and weekly pay rate at the time of redundancy.
The table below outlines how many weeks’ pay an employee is entitled to for each full year of service:
| Age at Time of Redundancy | Weekly Entitlement Per Year of Service |
| Under 22 | 0.5 week’s pay |
| 22 to 40 | 1 week’s pay |
| 41 and over | 1.5 week’s pay |
Redundancy pay is capped at 20 years of service and is calculated up to the maximum weekly amount allowed by law.
Employees often ask whether unused sick leave contributes to redundancy pay. The answer is no. Unused sick leave is not part of the redundancy calculation. Redundancy pay is strictly based on weekly pay, age, and years of service.
However, any accrued holiday pay during the period of sick leave may need to be paid separately upon termination. This is often handled as part of the final settlement.
Can Employers Offer Voluntary Redundancy to Staff on Sick Leave?
Offering voluntary redundancy to an employee on sick leave is legally acceptable, as long as it is done fairly and with full transparency. The offer must be extended in the same way it is to other employees, and the person on sick leave must not be pressured or treated differently because of their absence.
Under the Employment Rights Act 1996, voluntary redundancy is still classed as a form of dismissal. Therefore, all rights and protections apply, including the right to a consultation and the opportunity to ask questions or seek legal advice.
If an employee accepts voluntary redundancy, the employer should provide them with:
- A written agreement outlining the redundancy terms
- Information about redundancy pay and notice period
- Details on how other benefits, such as accrued leave, will be handled
The process must be managed with care to avoid any suggestion that the employee was unfairly influenced or targeted due to their illness.
Employers are also expected to maintain clear records of all communications regarding voluntary redundancy. These documents can be essential in the event of a dispute or claim later on.
What Are the Common Mistakes Employers Make When Handling Sick Leave Redundancy?
Handling redundancy for employees on sick leave involves complex legal and ethical considerations. Employers can face significant legal risks if they fail to approach this correctly. Some of the most common errors include:
- Assuming that absence from work justifies redundancy without a genuine business reason
- Not including employees on sick leave in consultation processes
- Using sickness absence as a negative factor in selection criteria
- Failing to make reasonable adjustments for consultations or redeployment
- Inadequate documentation of the decision-making and consultation processes
To reduce these risks, employers should review internal redundancy policies, consult with HR professionals, and consider legal guidance if necessary.
A well-managed redundancy process ensures fair treatment for all staff and helps protect the business from legal claims. For employees, understanding their rights and ensuring open communication with their employer is key to navigating this challenging period.
Conclusion
Yes, it is legally permissible to make an employee redundant while they are on sick leave, provided the process is fair, transparent, and based on a genuine business need.
Employers must treat employees on sick leave with the same respect and diligence as those actively at work, following all legal procedures to avoid serious repercussions.
For employees, understanding your rights and seeking professional advice can help ensure you’re treated fairly if redundancy is on the horizon during your absence.
FAQs About Redundancy and Sick Leave in the UK
Can my employer select me for redundancy just because I’m off sick?
No, redundancy must be based on business needs, not health status. Doing so could result in a claim for unfair dismissal or discrimination.
What happens if I can’t attend the consultation meeting due to illness?
Your employer should make reasonable adjustments, such as conducting meetings via email, phone, or video call, or involving a representative.
Do I still accrue holiday while on long-term sick leave before redundancy?
Yes, statutory holiday continues to accrue while on sick leave, and any unused holiday must usually be paid upon termination.
Can I refuse voluntary redundancy while on sick leave?
Yes, you have the right to accept or decline voluntary redundancy, and declining should not negatively affect your employment rights.
Will being on SSP affect how much redundancy pay I receive?
No, SSP does not impact redundancy pay calculations. It is based on your contractual or standard weekly wage before sick leave.
Can I bring a legal claim if I feel my redundancy was unfair?
Yes, you can take your case to an employment tribunal if the redundancy process was flawed or discriminatory.
What role does occupational health play in redundancy while sick?
Occupational health can advise on your fitness for consultation or redeployment, but it cannot justify redundancy on health grounds alone.
