Redundany (L17) Flashcards
What is the definition of redundancy under ERA s139(1)?
An employee will be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to
(a) the fact that his employer has ceased or intends to cease –
(i) to carry on the business for the purposes of which the employee was employed by him, or
(ii) to carry on that business in the place where the employee was so employed, or
(b) the fact that the requirements of that business –
(i) for employees to carry out work of a particular kind, or
(ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer,
have ceased or diminished or are expected to cease or diminish.
What are the different circumstances for redundancy under ERA s139(1)?
S139(1)(a) – business closure OR workplace closure.
S139(1)(b) – cessation or diminution in requirements for employees to do work of particular kind whether generally or only in the place where the employee worked.
What is the business closure circumstance for redundancy (s139(1)(a))?
Permanent or temporary?
Whether a temporary closure can give rise to redundancy is a question of fact.
Business replaced?
The old business has ceased and any employees dismissed from the old business are dismissed under redundancy.
What is the workplace closure circumstance for redundancy (s139(1)(a))?
“Has ceased, or intends to cease … to carry on that business in the place where the employee was … employed”.
What is the ‘place where the employee was … employed’?
Must be specifically the site which was closed down, and not all the sites generally.
How does UK Atomic Energy v Claydon [1974] IRLR 6 show a contractual test for mobility clauses?
The terms of the contract were the only factor taken into consideration by the tribunals/courts as to where the employee was required to work.
If it contained a mobility clause, requiring the employee to work at all sites, then the place of work is all of these sites.
What is the ground of redundancy of requirements having ceased or diminished under s139(1)(b)?
Have the requirements of the business for employees to carry out work of a particular kind ceased or diminished – either generally, or in the place where the employee was employed?
Fewer employees needed for same work of a particular kind.
Fewer employees needed for less work of a particular kind.
Murray v Foyle Meats [1999] ICR 827 (HL).
How can business reorganisations involving new job specifications be more difficult to determine if they amount to redundancy?
An employer just changing the Ts&Cs for efficiency, will not automatically mean there is redundancy.
But what if they get rid of a job and replace it with a new job. Is this still requirements diminishing?
Historic approaches: Did there job function disappear? If it did, this is redundancy.
Contract approach.
Murray v Foyle Meats [1999] ICR 827 (HL).
Safeway Stores plc v Burrell [1997] ICR 523 (EAT).
Two questions which need to be asked to determine if dismissal is by reason of redundancy.
Diminution of the need for employees?
Was this diminution the cause for the dismissal?
How does Murphy v Epsom College [1985] ICR 80 (CA) show that business reorganisations involving new job specifications can be more difficult to determine?
If there is no diminution, this could still result in redundancy if it is clear that the employee’s job has changed so significantly that the job no longer exists.
2 plumbers hired at the college, college hired a new heating technician and got a new system.
Plumber dismissed because the employer’s requirement for employees to carry out general plumbing diminished.
What are the requirements to be eligible for statutory redundancy pay?
Employees only.
There must be a dismissal (ERA, s136).
Note the lay off and short time working provisions (ERA, ss147-154).
The employee must have 2 years’ continuous employment (ERA, s155).
What is the reward available under statutory redundancy pay?
Statutory redundancy payment (ERA, s162).
41 and above – 1.5 x week’s pay.
22 – 40 – 1 week’s pay.
Below 22 – 0.5 x week’s pay.
Maximum of 20 years.
Maximum weekly pay - £643 (as at April 2023).
Same award in a basic award of unfair dismissal claim.
How is the fairness of redundancy determined?
Redundancy is a potentially fair reason for dismissal in terms of the unfair dismissal provisions (ERA s98(2(c)).
Still necessary to consider whether employer acted reasonably in treating redundancy as a sufficient reason for dismissal (ERA s98(4)).
Which section of ERA tells us about the requirements for reasonableness of redundancy?
ERA s98(4).
Which cases tell us about the requirement for the selection of redundancy to be reasonable?
How does an employer decide who is to be dismissed for redundancy?
Criteria should be ‘objective’ and followed.
Williams v Compair Maxam Ltd [1982] ICR 156.
Should be capable of being applied in an objective manner.
Criteria in this case criticised for being too subjective in nature, including manager’s opinions etc.
Rolls Royce Plc v Unite the Union [2008] EWHC 242.
Considered last in first out (LIFO) approach.
Held it can be lawful if used with other criteria, but NOT on its own.
If a tribunal is satisfied that the method is fair, they will generally find that sufficient, without inquiring into how it is applied etc.
Which case tells us about the requirement for warning and consultation to a reasonable redundancy?
Polkey v AE Dayton Services Ltd [1988] ICR 142.
Which cases tell us about the requirement to provide alternative employment for a reasonable redundancy, and what does this mean?
Williams v Compair Maxam Ltd [1982] ICR 156.
Polkey v AE Dayton Services Ltd [1988] ICR 142.
Any alternative vacancies available that the employer could have offered instead of redundancy?
