Thank you. What the employer has done is possible, as long as they can show that this is a redundancy situation. According to the Employment Rights Act 1996, redundancy occurs in the following circumstances:
1. Business closure – where the whole of the employer’s business is closed
2. Workplace closure – closure or relocation of the location where the employee worked
3. Reduced requirement for employees to carry out work of a particular kind
Generally, redundancy occurs when an employer decides to reduce the number of its employees, either within the business as a whole, or within a particular site, business unit, function or job role. There are various reasons why this may happen, such as economic pressure, changes in the nature of products/services offered, internal reorganisation, workplace relocation, etc. The reason for the proposed redundancies will rarely be challenged and the employer will simply have to justify that the actual reason satisfied one of the statutory definition of redundancy above.
One of the frequently misunderstood reasons for redundancy is when it is caused by an alleged reduced requirement for employees to carry out work of a particular kind. Many people think a job has to actually disappear for there to be redundancy but that is not the case and the following are examples of genuine redundancies:
- The same amount of work remains but fewer employees are needed to do it (this can include consolidation of jobs by spreading out certain duties amongst existing employees or outsourcing the work to contractors)
- There is less work of a particular kind and fewer employees are needed to do it (e.g. when a client reduces their work with the employer)
- There is less work of a particular kind, but the same number of employees are required overall (e.g. having to reduce employee’s hours)
So as long as the employer can show that their situation fell within one of the definitions of redundancy, the test will be satisfied and the focus then shifts on the remainder of the redundancy procedure. This would look at how the employer consulted with employees, whether any suitable alternative employment was offered to those at risk and the general fairness of the redundancy procedure applied by the employer.
Does this answer your query?