July 31, 2013

Redundancy and Bumping

The Claimants were found to be unfairly dismissed when they were dismissed after a redundancy exercise in which a group of staff with differing functions were put into what was described as an “rather surprising” pool. The lowest scoring 4 staff were dismissed regardless of job functions and the remainder were retrained to fill gaps, even if it would have meant retraining a warehouse manager in accounting. The Employment Tribunal rejected redundancy as the reason for dismissals. However the EAT held that the dismissals were for redundancy and were a form of bumping. Following the two stage test in Murray v Foyle Meats, the EAT held that the first stage of this test, a reduction in the requirement for work of a particular kind to be carried out, can be met with regard to several kinds of work and not just the work which the individual did. The unfair dismissal finding was not overturned but the EAT did consider that the Tribunal should have looked at a Polkey reduction. The evidence demonstrated there was a need to reduce manpower, with a new accounting computer package reducing the requirement for staff carrying out an accounts function. Consequently the case was remitted back to the same Tribunal to consider the Polkey issue.

This legal update is provided for general information purposes only and should not be applied to specific circumstances without prior consultation with us.

For further details on any of the issues covered in this update please contact Gemma Ospedale, Partner in Employment on 020 7583 2222.

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