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Redundancy is a technical term, and will often
catch out the unwary. It is a fundamental and often costly mistake to dismiss
an employee for redundancy where no redundancy exists.
Basically, a redundancy will exist in the following
circumstances:
1. Business closure
This is redundancy in its simplest form, covering a
business closing down altogether. It can, however, cover other scenarios, such
as an employer replacing its old business with an entirely new one, which is
sufficiently different in nature.
2. Workplace closure
This happens where an employer closes down a
particular workplace at a particular location, even where it carries on
business elsewhere. It also includes an employer moving part of its business to
another location.
However, there can be difficulties when it is
unclear whether an employee was employed to work at the location that has
closed. If not, apart from in rare circumstances (see
Bumping below), there will be no
redundancy.
It is a common mistake to assume that if the
employee’s contract allows the employee to be moved around that there is
no redundancy. When assessing if a redundancy exists, it is necessary to look
at the reality of what happens, rather than simply looking at the employment
contract. So there is likely to be a redundancy where the employer moves its
business from a particular location where an employee normally works, even
though that employee’s contract requires the employee to work from other
locations.
3. Reduced need for employees
This third scenario tends to be the most difficult
identify as it covers a number of different situations, although they all have
a common theme, namely a reduced need for employees to do work of a particular
kind. Different kinds of work are identified by the special skills, aptitudes
or knowledge they require.
A reduced need for employees can cover the
following situations: duties being reallocated; a fundamental change in duties;
reorganisation leading to a reduced need for employees; restructuring of
departments.
It is even possible to have a reduced need for
employees where workload has increased. For example, an employer may choose to
meet an increased workload by installing machines that do the work of several
employees.
4. Bumping
It is common to assume that if an employee is to be
dismissed for redundancy, it must be for their redundancy. This assumption is
wrong. It is possible to dismiss an employee for redundancy where the
redundancy relates to another employee’s job, for example there is less
need for the type of work that Ms. Smith does, but he is given the job of Mr.
Jones, and Mr. Jones is made redundant. The reason for Mr. Jones dismissal is
redundancy, only it is the redundancy of Ms. Smith’s position and not his
own. |
