Dismissing on grounds of redundancy

27th January 2021

Dismissing on grounds of redundancy

A redundancy situation arises where a workplace closes or an employer needs fewer employees to do a particular kind of work. In the case of Berkeley Catering Ltd v Jackson, the company was owned by Mr Patel. The Claimant, Mrs Jackson, was the Managing Director. During the Tribunal proceedings, Mr Patel admitted that he had made disparaging comments about Mrs Jackson in front of her colleagues and had begun to undermine her. Around the same time, he had also started taking a more active role in the company’s business. He subsequently decided to make the role of Managing Director redundant and to take on the role himself of a full-time CEO. Mrs Jackson was dismissed following a period of consultation.

Mrs Jackson claimed unfair dismissal, asserting that there was no genuine redundancy situation. The Employment Tribunal found in her favour. It said that there was no reduced requirement for employees to do work of the kind for which she was employed – the MD role. All that had happened was that Mr Patel had chosen to involve himself more in the company’s business. The company was not in any financial difficulty. Furthermore, an Events Director was employed following Mrs Jackson’s dismissal, which indicated that there was no reduction in the requirement for senior management level staff.

The company appealed and the Employment Appeal Tribunal held that the Tribunal had taken the wrong approach. The Tribunal had got distracted by considering whether the redundancy situation was genuine. The Employment Appeal Tribunal said there was either a redundancy situation or there wasn’t. It was up to the employer if it chose to arrange its affairs such that it was able to reduce the number of employees required. The employer’s motive was irrelevant to the question of whether a redundancy situation existed. The motive was however relevant to the question of whether the redundancy situation was genuinely the reason for Mrs Jackson’s dismissal, taking into account whether the employer’s actions had been in good faith and also whether the role of Events Director ought to have been offered to Mrs Jackson. The case was sent back to a differently constituted employment tribunal to decide.

The Employment Appeal Tribunal confirmed that the fact that there remained a need for management of the company (the work performed by Mrs Jackson) did not prevent a redundancy situation arising given that the work had been rearranged such that fewer employees were needed to do the work. This decision highlights the key distinction between a reduced requirement for the particular work for which the employee was employed and a reduced requirement for employees to do that work – it’s the latter that’s relevant to whether there is a redundancy situation. It is only necessary that an employer needs fewer employees, irrespective of whether the amount of work which needs to be done has changed. Furthermore, the manner in which a redundancy situation arises will not affect whether a redundancy situation exists.

If you require advice on this, or any other employment law issue, please contact Marie Allen on 01473 298133 /marie.allen@gotelee.co.uk or Elizabeth Clazie on 01473 298187 / elizabeth.clazie@gotelee.co.uk.

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