Reduction in Headcount not Needed for a Redundancy

“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 –

(i) for employees to carry out work of a particular kind […]

have ceased or diminished or are expected to cease or diminish.

It was held in the recent EAT case of Packman t/a Packman Lucas Associates v Fauchon that for a redundancy situation to arise there does not necessarily need to be a reduction in headcount.  The focus must be on the employer’s requirements for employees generally to carry out work of a particular kind as opposed to the requirement for a particular employee to carry out work of a particular kind.  What this means is that the focus must be on the requirements of the business, not the particular contractual obligations of the employee although clearly these will be linked.

The particular facts of this case are as follows:

Ms Fauchon was a book-keeper for Packman.  However, there was a downturn in the business and, at the same time, Packman introduced an accountancy software package.  As a result Packman had a erduced need for book-keeping and therefore asked Ms Fauchon to reduce her hours.  She refused to work reduced hours and was therefore dismissed.  She brought tribunal proceedings against Packman and it was held that she had been dismissed by reason of redundancy and as such was entitled to a statutory redundancy payment.  Packman appealed but the appeal was dismissed.

The EAT held that whilst there may be redundancy situations in which an employer needs fewer employees to do the same amount of work, redundancy situations also arise where the amount of work available for the same number of employees is reduced (as in this case).  However, if there is just as much work for just as many employees, then a dismissal arising out of the situation would not be a redundancy.  It is not sufficient for an employer to simply say that it wants the same amount of work to be done by the same number of employees but over shorter hours.


About Belinda Lester
I am the managing director and founder of Lionshead Law, a boutique virtual law firm specialising in employment, immigration, commercial and IP law.

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