Section 104K(4)

In the case of an employer that is not a local authority, subsection (1) does not apply in relation to an employee if the employer shows that— the reason for the replacement was to eliminate, prevent or significantly reduce, or significantly mitigate the effect of, any financial difficulties which at the time of the dismissal were affecting, or were likely in the immediate future to affect— the employer’s ability to carry on the business as a going concern, or where the employer is a public sector employer, the financial sustainability of carrying out the employer’s statutory functions, and in all the circumstances the employer could not reasonably have avoided the need to replace the employee.

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Source: legislation.gov.uk · retrieved 2026-09-04