Case Law Update: Welcome clarification on redundancy dismissals

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Published

In the case of Mr Ron Packman T/A Packman Lucas Associates v Ms P Fauchon the EAT has confirmed that there can be a redundancy situation in circumstances where the number of employees doing work of a particular kind stays the same.

Facts

Ms Fauchon was employed by Packman Lucas Associates (“Packman”) to provide book-keeping services. There was a downturn in business, and at that time Packman introduced an accountancy software package which in itself also reduced the number of hours which it needed Ms Fauchon to work. Packman asked Ms Fauchon to reduce significantly her hours per week. She refused and was ultimately dismissed.

Decision

The employment tribunal held that the downturn in business meant there was a diminished need for book-keeping, and since Ms Fauchon did not agree to a reduction in her hours she was dismissed by reason of redundancy. Ms Fauchon appealed. The EAT agreed with the employment tribunal, reverting back to the statutory test (which provides that an employee who is dismissed shall be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to the fact that the requirements of that business for employees to carry out work of a particular kind have ceased or diminished, or are expected to do so). That test, it said, should be read as a whole and so a redundancy situation will arise where fewer employees are needed to do the same amount of work, or crucially (as here) the amount of work available for the same number of employees is reduced.

Comment

Whilst it is fairly established law that a redundancy situation can arise where the overall number of employees in the organisation remains the same (for example, Murphy v Epsom College), in the 2002 case of Aylward v Glamorgan Holiday Home Ltd t/a Glamorgan Holiday Hotel the EAT caused some confusion when they held that the number of employees performing “work of a particular kind” must nonetheless reduce. However, the EAT in Fauchon has greatly assisted in clarifying that, in its view, there is no need for the number of employees performing work of a particular kind to reduce; if the business need for work of a particular kind has diminished – that is, less work of that sort needs to be done – there will be a redundancy situation.

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