Dismissals for redundancy

A redundancy is a dismissal as a result of a workplace closing down or the employer needing fewer employees to do work of a particular kind. In Berkeley Catering Ltd v Jackson the question was whether the reason that an employer needed fewer employees made a difference to whether or not there was a redundancy situation.

Mrs Jackson was the Managing Director of a company owned by Mr Patel. Over the course of 2017 Mr Patel began – as he himself admitted – to undermine Mrs Jackson and disparage her in front of colleagues. He also began to take a more active role in the business. In 2018 he decided that he would step in as a full time CEO, making the role of Managing Director redundant. After a series of consultation meetings, Mrs Jackson was dismissed.

She claimed unfair dismissal, arguing that her redundancy was bogus. The Tribunal upheld her claim. There was no diminishing need for an MD role. Mr Patel had simply decided to increase the amount of time that he put into the company. There was no financial difficulty and the employer had taken on an Events Director after Mrs Jackson was made redundant, indicating that there was no diminishing need for senior management staff as a whole.

On appeal, the EAT held that this was the wrong approach. The Tribunal had distracted itself by asking whether there was a ‘genuine’ redundancy situation. A redundancy situation either existed or it did not and an employer was free to organise its affairs in such a way as to reduce its requirement for employees. If it did so, then the motive behind that decision was irrelevant to the question of whether or not there was a redundancy. Motive was of course relevant to the issue of reasonableness, both in terms of whether the employer had acted in good faith and whether Mrs Jackson should have been offered the role of Events Director. But the Tribunal had fallen into error by bringing motive into play when considering whether there was a redundancy situation. The case was sent back to a different employment tribunal to decide whether the redundancy situation was genuinely the reason for dismissal and whether the dismissal was fair.