Redundancy Flashcards
Before redundancy provisions in the 1996 Act, what statute covered redundancy payments?
Redundancy Payments Act 1965
Redudancy payments only apply to..
Employees as defined in the Employment Rights Act 1996
A dismissal has taken place for redundancy purposes if ..
S136 ERA 1996
What is the statutory presumption regarding redundancy?
The dismissal is for reason of redundancy unless the contrary is proved.
Who has the burden of proving the reason for dismissal?
The employer must prove the reason for the dismissal
When is a dismissal for reason of redundancy?
s 139:
If the dismissal is wholly or mainly attributable to:
The fact that the employer cease or intends to cease… etc (See statute book)
An employee who is warned of redundancies and leaves employment early may not be entitled to redundancy payments
Morton Sundour Fabrics Ltd v Shaw (1966) - An employee heard the employer would be making some employees redundant, but left before he was actually made redundant
Held: Employee not entitled to redundancy payments
If an employee is still on the books, he will still be considered employed and therefore entitled to redundancy payments
Marshall v Harland & Wolf Ltd [1972] - Employee off sick for 18 months
Held: employee still entitled to redundancy payments as the employers could not show the contract had come to an end through frustration.
Name in your own words the ways in which redundancy occurs
Cessation of the business
Place of work disappearing
Work of a particular kind ceasing or diminishing
What is cessation of the business?
Cessation of the business includes temporary closure
Gemmell v Darngavil Brickworks Ltd (1967)
Employer had to close business down for 13 weeks to do repairs.
Held: Employees dismissed for reasons of redundancy as a temporary cessation is within the meaning of the act.
In determining whether the employee is redundant as the place of work has closed down what is the test?
A factual test
Which case set out the test that determined where the employee worked?
Bass Leisure Ltd v Thomas [1994]
Woman worked in Coventry and the employer closed down that business and moved it to Birmingham some 20 miles away.
The woman tried commuting but found it was too far and resigned claiming redundancy.
The employer tried to claim she had a mobility clause in her contract therefore could be required to work in any of those places and did not qualify for redundancy payments.
Held: The employer could not rely on the mobility clause if it was actually never relied up. She only ever had to work in Coventry therefore she was entitled to redundancy payments.
Which case confirmed the factual test in Bass Leisure Ltd v Thomas [1994]
High Table v Horst [1997] - the test is a factual one not a contractual one and where you actually worked is important
If the place of work closes down and moves to somewhere very nearby, the employee will not be entitled to redundancy payments
Managers (Holborn) Ltd v Hohne [1977] - woman resigned and claimed redundancy payment after the employer closed its business in Holborn and moved it to Regent Street
Held: Made no difference to the employee, so no redundancy payments
If work of a particular kind ceases or diminishes what does that mean?
The employee requires fewer employees to a do existing work or there is less work for existing employees
In order to claim redundancy for the reason that work has ceased or diminished, the work has to have actually ceased or diminished
Vaux and Associated Breweries v Waugh [1968]
The employer got rid of old bartenders and replaced them with younger more glamorous bartenders
The old employees tried to claim they had been dismissed for reasons of redundancy
Held: The job had not ceased or diminished and the work being done by the new bartenders was the same, so they couldn’t claim redundancy payments
Changing the time of day work is to be carried out does not mean the work has ceased or diminished
Lesney Products v Nolan [1977] - Employer changed employees working one long day shift plus overtime to two day shifts. Those who refused were dismissed.
Held: Employees not entitled to redundancy payments as the work had stayed the same.
Employer is entitled to rearrange his business to improve efficiency and rearranging shifts that results in reduced pay does not mean it is a redundancy situation.
What is the test for determining what the employees job is to determine whether the work of a particular job has ceased or diminished?
The test is a statutory test:
Safeway Stores v Burrell [1997]
Contractual test and function test are both wrong.
What should be considered is the statutory definition under s 139 ERA 1996, rather than focusing on the particular work of an individual employee it should be considered whether there was an actual diminution or cessation in the employer’s requirement for employees to carry out work of a particular kind?
What case confirmed the statutory definition in Safeway Stores v Burrell [1997]
Murray v Foyle Meats Ltd [1997] - the test is the causation test and there are two question to ask :
1) Has work of a particular kind ceased or diminished?
2) Whether the dismissal is wholly or mainly attributable to that state of affairs (causation)
If yes = redundancy situation and the contractual obligations/functions which the employee performed are irrelevant
What does NOT apply to redundancy procedures in determining if they are fair or unfair
ACAS Code
What things should be considered when determining whether a redundancy situation is fair or unfair?
1) Whether there is truly a redundancy situation?
2) Identify group of workers likely to be affected
3) Establish selection procedures
4) Employers should consult with employees and trade unions
5) Offers of suitable alternative employment + trial period
6) Formal notice of redundancy
7) Calculation of redundancy pay
