What is technical redundancy?

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When the business that employs you is sold, but you’re offered employment on the same (or similar) terms with the purchaser, this is often referred to as a ‘technical redundancy’. Technically your job is redundant because your current employment agreement ends at the point of sale, but in effect your job continues with the new employer. There are two main ways that employment agreements deal with these situations.
First, an employment agreement might say that you only get the usual period of notice, without compensation, if there’s a technical redundancy. Your agreement might say that if the business is sold and you decline employment on the same (or substantially similar) terms with the new employer you won’t get redundancy compensation. In this case your employer doesn’t have to pay you any compensation if you decide not to transfer.
The other option is when your agreement says you can get compensation if you’re redundant, but says nothing about how technical redundancy affects that entitlement. If this is the case, you could choose not to move across to your new employer, and take redundancy compensation from your current employer instead.

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