Does the way a redundancy arises affect whether a redundancy situation exists?

The EAT has ruled that the way a redundancy situation arises is irrelevant to whether a redundancy situation exists.

Employee dismissed for redundancy

Mrs Jackson worked for Berkeley Catering Limited from 2013. In 2016 she was promoted to Managing Director. From 2017, the owner of the company, Mr Patel, began to spend more time in the business. He excluded her from activities and set out to undermine her.

On 12 March 2018 Mr Patel announced that he was taking control of management decision-making and operation. He informed Mrs Jackson he would take the title of CEO and her role of Managing Director would be redundant. Mrs Jackson was then made redundant.

She claimed unfair dismissal.

Tribunal rules no redundancy situation

The tribunal ruled there was no redundancy situation. Therefore, the employer did not have a fair reason for dismissal and the dismissal was unfair.

Employment Appeal Tribunal finds redundancy situation existed

The employer appealed, arguing there was a genuine redundancy situation. 

The Employment Appeal Tribunal agreed. The requirement for Mrs Jackson’s role had diminished following the restructure. Mr Patel had taken over her duties, which established a redundancy situation as fewer employees were needed to do the work. Mr Patel’s undermining of Mrs Jackson’s role was irrelevant to the question of whether a redundancy situation existed. This was only relevant when deciding if the dismissal was fair.

The case was sent back to the tribunal to decide if Mrs Jackson’s redundancy was fair.

What does this mean?

A redundancy situations exists where there is a business or workplace closure or where the business has a reduced requirement for employees to do work of a particular kind.

The manner in which a redundancy situation arises is irrelevant to the question of whether there is a redundancy situation. However, it may be relevant to the fairness of the dismissal and whether the process leading to the dismissal was fair. Employers must therefore follow fair and reasonable procedures.

Berkeley Catering Limited v Jackson