Owner taking on claimant’s duties in addition to his own created a redundancy situation

A redundancy situation under section 139(1)(b) of the Employment Rights Act 1996, i.e., where the employer has a reduced need for employees to carry out work of a particular kind, either exists or it does not. It is open to an employer to organise its affairs so that its requirement for employees to carry out particular work diminishes and, if that occurs, the motive of the employer is irrelevant to the question of whether the redundancy situation exists, according to the EAT.

Berkeley Catering v Jackson (UKEAT/0074/20/LA(V))

What are the practical implications of this case?

This case is a helpful reminder to tribunals and parties dealing with redundancy dismissal claims to take a staged approach to the issues in play, namely, to ask:

• was there a redundancy situation?
• if so, was redundancy the reason or principal reason for dismissal?
• if so, was the decision to dismiss by reason of redundancy reasonable, both substantively and procedurally?

Asking whether or not there was a ‘genuine’ redundancy situation may confuse and conflate issues. Where a redundancy situation exists, it does not necessarily follow that the redundancy was the reason for the dismissal and, even less so, that the dismissal was fair.

In this case the owner of the respondent accepted that he had undermined and disparaged the claimant. Her duties had been absorbed by existing staff members, including by the owner himself, so that there was an overall need for fewer employees to carry out the work. The fact that these changes had arisen from the owner’s motive to cut out the claimant from the business did not prevent there from being a statutory redundancy situation under ERA 1996, s 139(1)(b). However, that background would, of course, still be relevant to the questions that are now to be remitted back to the employment tribunal as to the reason for the claimant’s dismissal and the consideration of reasonableness under ERA 1996 ss 98(1) and 98(4).

What is the background?

Under the ERA 1996, an employee is dismissed by reason of redundancy if their dismissal is wholly or mainly attributable to:

• the employer ceasing or intending to cease carrying on the business for the purpose of which the employee was employed by the employer
• the employer ceasing or intending to cease carrying on that business in the place where the employee was so employed
• the requirements of the business for employees to carry out work of a particular kind, either generally or in the place where the employee was employed, ceasing or diminishing (or being expected to cease or diminish)

In relation to the final of these scenarios, the particular cause or reason for the diminution in the employer’s need for employees to carry out work of a particular kind is irrelevant to the legal test; the only relevant feature is the fact of the diminution.

Dismissal due to overstaffing is a simple example of applying the definition. If there are two employees inefficiently cleaning an office and the employer decides that one employee could adequately complete the job in the time allotted and so dismisses the other, the dismissal arises from a redundancy situation. There is not a diminution in the need for the particular work (cleaning), but there is a reduction in the need for employees to carry out particular work (two cleaning employees were needed before, now only one is needed).

A business may need the same work to be done, but by different employees at different levels, or on different shifts, or with more general skills, or with more specialised skills. In these situations:

• where the requirement for employees to carry out the particular kind of work has changed, but not ceased or diminished, the situation will be one of reorganisation but not redundancy
• by contrast, where it is a genuinely different kind of work which is now required by an employer, this gives rise to a redundancy situation

There may be a very fine distinction between these situations. Where the situation is one of reorganisation but not redundancy, the reason for a dismissal may nonetheless, in the context of unfair dismissal, be for a potentially fair reason, namely ‘some other substantial reason’.

 Case details

• Court: Employment Appeal Tribunal
• Judge: Mr Justice Bourne
• Date: 27 November 2020

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