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Reorganisation or change in duties
Whether a reorganisation or change of duties results in a redundancy depends on the kind of work an employee is required to do before and after the change or reorganisation. The test is always whether the statutory definition (section 139 ERA 96) has been met.
Mr Murphy was a plumber at Epsom College. The college installed a new heating system that he was not qualified to operate. The college decided to employ a residential heating engineer instead of a plumber. As a result, Mr Murphy was dismissed. The Court of Appeal upheld the tribunal’s conclusion that he had been dismissed because of redundancy. The requirement for a plumber had ceased or diminished. In its place was a new requirement for a heating engineer.
Murphy v Epsom College [1984] IRLR 271
A dismissal of employees and their replacement with self-employed workers, franchisees or agency workers will be a redundancy situation, even where the agency workers are taken on to do exactly the same kind of work as the dismissed employees were doing (Bromby & Hoare Limited v Evans [1972] ICR113; Hodgkins v CJB Development Limited [1984] EAT/948/83). This is because the statutory test is based on the employer’s need for employees to do work of a particular kind. Replacing direct employees with other workers is likely to be a redundancy, even if they are doing the same job.
The employer does not have to show an economic justification for a decision to make redundancies, or that financial problems have led to the drop in work. There can still be a redundancy where a successful employer with plenty of work decides to reorganise the business (Kingswell and others v Elizabeth Bradley Designs EAT/0661/02) (and see Packman v Fauchon (UKEAT/0017/12/LA)).
Although the tribunal will not second-guess the business decision that redundancies are needed, it will want to see good evidence of the business case for redundancies, to make sure redundancy is the real reason for the dismissal, and not some hidden reason, such as concerns about performance.
The law also permits a practice known as bumping. This is what happens where an employee whose role becomes redundant gets offered someone else’s role, resulting in that person’s dismissal (Lionel Leventhal v North UKEAT/0265/04). The reason for the dismissal in these circumstances is likely to be redundancy, as long as overall, there was a reduction in either the work available to be done or the number of employees needed to do it. There will be a separate question as to whether the dismissal was fair.