Can there be a redundancy where the headcount remains the same?
In Packman v Fauchon the EAT said ‘Yes’.
The claimant was employed as a book-keeper. There was a downturn in business. Also, the employer introduced an accountancy software package which reduced the number of hours which it was necessary for the book-keeper to work. Accordingly, it sought to persuade the claimant to cut down her hours. She refused and was dismissed.
The Employment Tribunal held that the downturn in business meant there was a diminishing need for book-keeping. Since the claimant did not agree to a significant reduction in her hours, the reason for her dismissal was redundancy. This analysis is consistent with an early, Divisional Court, decision in Hanson v Wood .
But in a later, unreported, EAT decision in Aylward v Glamorgan Holiday Home Ltd it had been suggested that there must always be a reduction in the headcount of employees for redundancy to apply. Aylward has, however, always been doubted, notably by the editors of Harvey on Industrial Relations and Employment Law. The Employment Tribunal took this into account and decided not to follow Aylward.
The employer appealed, relying upon the Aylward case, which, it contended, bound the Employment Tribunal. The EAT dismissed the appeal, departing from Aylward and noting Harvey’s criticism with approval.
Hence, if the amount of work available for the same number of employees is reduced then a dismissal of an employee caused wholly or mainly for that reason is a redundancy.
Comment: If you are downsizing or reorganising and require some help please get in touch – getting it wrong could lead to all sorts of issues.