Redundancy definition focuses on staff numbers needed, not amount of work

A recent ruling from the Employment Appeal tribunal is a reminder that, where a business does not close completely, the statutory definition of redundancy focuses on the number of employees required to do work of a particular kind. This does not always amount to the same thing as looking at the amount of work to be done.

Where there is not a complete workplace closure, an employee is dismissed on redundancy grounds where the dismissal is wholly or mainly attributable to the fact that the requirements of the business “for employees to carry out work of a particular kind” have ceased or diminished, or are expected to cease or diminish (emphasis added).

In this case, the claimant was dismissed after the owner of the business, who had previously worked alongside her, increased his hours and in effect took over her role.  Relations between the claimant and the owner were not cordial, so one issue the tribunal had to decide was whether the decision to dismiss her was on redundancy grounds, for some other substantial reason, or simply personally motivated.

The employment judge cited the law correctly, but then, in the EAT’s view, failed to apply it correctly.  The fact that the employer had in effect organised its affairs to create a redundancy situation did not mean that it no longer needed an employee at the claimant’s level, even if there had been no drop in overall business activity. While these steps may have been personally motivated, that was not relevant to assessing whether there was a redundancy situation. Rather, the question of motivation was relevant to determine whether redundancy was the reason for the dismissal, and, if it was the reason, whether the dismissal had been fair.

The employment judge’s ruling that the dismissal was not on redundancy grounds has therefore been overturned, and this issue remitted to a new tribunal.