Reorganisation or change in duties

Whether a reorganisation or change of duties results in a redundancy depends on the kind of work the employee was required to do before and after the change or reorganisation. The test is always whether the statutory definition set out on page 323 (section 139 ERA 96) has been met. For example:

The dismissal of employees and their replacement with individuals who are not directly employed is likely to be a redundancy situation, even if the replacement workers are taken on to do the work of the dismissed employees (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 a reduction in the employer’s need for employees not workers. The same should apply to the dismissal and replacement of direct employees with workers who are not direct employees, such as “self-employed” workers, franchisees, agency workers, or the same individuals as before but engaged through a payroll or umbrella company.

The employer does not have to demonstrate an economic justification for making redundancies, or that financial problems have led to the decline in work. Indeed, 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 [2003] UKEAT 0661/02/1902).

Although a tribunal will not second-guess an employer’s business decision that redundancies are needed, it will still 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 capability (see page 289) or trade union victimisation (see page 121).

The law also permits a practice known as bumping. This is what happens when an employee whose own role becomes redundant is offered another employee’s job, resulting in that person’s dismissal. The reason for the dismissal will be redundancy even though there remains a need for the dismissed employee’s role, to be filled by someone else. Whether or not the dismissal was fair is a separate question.

Failing to consider bumping can sometimes make a dismissal unfair (Lionel Leventhal v North [2004] UKEAT 0265/04/2710). There is no obligation always to consider bumping. The test is whether bumping would have been within the band of responses of a reasonable employer in the particular circumstances of the dismissal (Samuels v University of Creative Arts [2012] EWCA Civ 1152).