Dismissal by reason of Redundancy: an introduction
Section 94 of the Employment Rights Act 1996 (“ERA”) provides that an employee has the right not to be unfairly dismissed. That concept is then explained by section 98:
“(1) … it is for the employer to show- (a) the reason (or, if more than one, the principal reason) for the dismissal, and (b) that it is either a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.
(2) A reason falls within this subsection if it- … (c) is that the employee was redundant,…”
For the purposes of the ERA, “redundancy” is defined by section 139, as follows:
“(1) … an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to- … (b) the fact that the requirements of that business- … (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.”
WAS IT BY REASON OF REDUNDANCY?
As observed in Murray and anor v Foyle Meats Ltd [1999] ICR 827, at p 829G-H, this provision makes clear that the ET must answer two questions of fact:
(1) whether a particular state of economic affairs exists (relevantly, whether the requirements of the business for employees to carry out work of a particular kind in a particular place have ceased or diminished, or are likely to do so);
(2) whether the dismissal was attributable (wholly or mainly) to that state of affairs.
In addressing the first question, it would be insufficient to satisfy section 139(1)(b)(ii) that a particular kind of work in a particular location ceases or diminishes; it is necessary that there is a reduction in the need “for employees” to carry out that work in that place (see the discussion in Safeway Stores plc v Burrell [1997] ICR 523, at p 530C-F). As for what is “work of a particular kind”, that is a question of fact that will require the ET to look at the tasks undertaken and the skills involved, which are not to be simply elided with the person undertaking the work or the qualifications they might hold (see the discussion in BBC v Farnworth [1998] ICR 1116 EAT, at pp 1122G-1123E)
ESTABLISHING THE REASON FOR DISMISSAL
- Turning to the reason for dismissal, that is a question of causation, and, again, one of fact for the ET (per Murray v Foyle Meats). The burden of establishing the reason for the dismissal, and whether it is capable of being fair for the purposes of section 98 ERA, is on the respondent and if it fails to discharge that burden the ET will be bound to find the dismissal was unfair. Where no issue has been taken with the reason pleaded by the respondent, however, it can be an error of law for the ET not to approach the question of fairness under section 98 on the basis of that reason, see per Wood J at pp 5H-6B Post Office (Counters) Ltd v Heavy [1990] ICR 1 EAT; albeit, whether a failure to do so will impact upon the fair hearing of the case will depend on whether the difference between the reason relied on by the respondent and that found by the ET is one of substance or merely of labelling, Hannan v TNT-IPEC Ltd (UK) Ltd [1986] IRLR 165 EAT at paragraph 22, and Secretary of State for Justice v Norridge UKEAT/0443/13 at paragraph 31.
