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28th January 2021

Does the manner in which a redundancy situation arises affect whether or not a genuine redundancy exists?

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In the recent case of Berkeley Catering Limited v Jackson, the Employment Appeal Tribunal (EAT) held that the way in which a redundancy situation arises is irrelevant to whether a genuine redundancy situation exists.

The claimant was employed by the respondent as a Managing Director, having taken over the role from the owner of the respondent. From 2017, the owner began to spend more time in the business, absorbing some of the claimant’s duties. The claimant alleged that she started to feel excluded from matters within her role and felt undermined. In March 2017, the owner informed the claimant that he was taking control of management decision-making and operations under the title of CEO, and the MD role would be made redundant. During this time, the respondent also offered an external candidate the role of Events Director, which was a new role in the business. The Claimant was placed at risk of redundancy and after a final consultation meeting the respondent wrote to her confirming that redundancy was unavoidable and there was no suitable alternative work. The claimant requested an appeal but it was never arranged. The claimant issued a claim for unfair dismissal on the basis that she had been pushed out of the business and there was no genuine redundancy situation.

The Employment Tribunal (ET) held that there was no redundancy as a matter of law and fact, and that there was no business reorganisation constituting some other substantial reason for dismissal. The ET found that there was a deliberate attempt to undermine the individual fulfilling the role of MD at the material time by the person who was about to take over. On appeal, the EAT held that the ET had erred in its review of whether the redundancy situation was genuine. An employer’s motive and conduct are only relevant when determining the real reason for dismissal and whether it was fair. The EAT found that the respondent had arranged its affairs so that the owner, with or without other existing employees, absorbed the work of the MD, whatever his reasons for doing so. There was, therefore, a diminution in the requirement of the business for employees to carry out work of that kind and, accordingly, a redundancy situation. The existence of a redundancy situation does not necessarily mean the redundancy was the reason for dismissal however. The case was therefore referred back to the ET to decide whether the claimant’s redundancy was fair.

For more information on any of the items raised in this article please contact a member of our Employment Law team.