- some general comments
The EAT made clear in Williams v Compair Maxam,that it is important that the criteria
chosen for determining the selection should not depend solely upon the subjective
opinion of a particular manager but should be capable of at least some objective
As the tribunal pointed out, the purpose of such objective criteria is to ensure that the
redundancy is not used as a pretext for dismissing an employee whom some manager
wishes to have removed for some other reason.
Consequently the criteria adopted in the Williams case itself which involved retaining
those 'who, in the opinion of the managers concerned, would be able to keep the company
viable' was unsatisfactory.
However, in Graham v ABF Ltd the EAT refused to find that a tribunal had erred in law
when it concluded that redundancy criteria based on 'quality of work, efficiency in
carrying it out and the attitude of the persons evaluated to their work' were not so
intrinsically nebulous and subjective that they could not form proper criteria for selection.
It did, however, emphasise that the vaguer the criteria the more important it was for
the employer to consult.
Given the limited numbers involved there would not have, and subject to any existing
applicable and enforceable collective agreement, been any breach of the statutory
obligation to consult, it would nevertheless be argued that consultation ought generally to
According to industry estimates the total number of employees
made redundant since September 2008: 190,301
During January 2009, XpertHR surveyed 266 employers,
covering 500,000 staff, who between them predicted they
would have to make 2,522 people redundant this year. By the
end of 2009, the actual figure will stand at nearly three times
that amount – 6,932 – according to a matched sample of 91
organisations that completed a repeat survey in July.
Employment Rights Act 1996.
Trade Union and Labour Relations (Consolidation) Act 1992.
B. The Redundancy Situation
Only an “employee” dismissed by reason of
redundancy is entitled to redundancy payment.
Definition of redundancy:
s. 139 Employment Rights Act (“ERA) 1996.
Redundancy situation arises where there is a:
Closure of the business;
Closure of employee’s workplace;
Diminishing need for employees to do the
Has the Workplace Disappeared?
s. 139 (a) ERA 1996.
Whole workplace, department, branch or office.
Change in the nature of the business may also
amount to closure if original business is replaced.
Whitbread plc t/a Whitbread Berni Inns v
Flattery and others EAT 287/94.
Lewis v Jones and Sons Plc EAT 776/92.
Effect of mobility clause.
High Table v Horst  IRLR 513:
Curling and ors v Securior Ltd 
Home Office v Evans & another 
If an employer seeks reliance on a mobility
clause, they can face claims of
Meade v Hill and Anor British Council
 ICR 847.
(ii) Temporary Closure &
(iii) What if There is a Transfer?
What amounts to “temporary” may vary
depending on the facts of the case.
What if there is a transfer?
The new employer may argue there is an
economic, technical or organisational (“ETO”)
reason for the dismissal of employees
Regulation 4 (8) of TUPE ~ An employee can
object to the transfer.
Has the Work Disappeared?
1. Work of a particular kind has ceased/diminished; or
2. Where the work has not diminished but fewer
employees are needed to do it.
Murray and anor v Foyle Meats Ltd  ICR 827:
Whether dismissal is attributable to diminishing need for
employees to do work of a particular kind.
Re-allocation of duties – depends on the particular
type of work
What if There is a
Are fewer employees needed?
Work allocated to contractors
No reduction in number of employees
Excel Technical Mouldings Ltd v Shaw EAT
0267/02 & EAT 0524/02/DA.
What if Terms & Conditions are
Where work remains the same but the
terms and conditions have changed, this
is not redundancy
Chapman and others v Gooneavean And
Rostowrack China Clay co Ltd  ICR
What are the options for the Employee?
Where an employer seeks to impose
changes of employment for <20
employees and dismisses and re-engages
them on different terms triggers collective
C. The Redundancy Process
The first approach
Consult with the union on alternatives;
Volunteers will sought ;
Where compulsory redundancies become
necessary there will be an agreed method of
Help with training, travel expenses for
interviews, counselling and careers advice
Has There Been Individual
Mugford v Midland Bank PLC  ICR 399.
If an employer fails to adequately warn and
consult it is probable that s/he is not acting
Alexander and anor v Brigden Enterprises
the employee must be given information on why
she/he has been selected and an opportunity to
contest her/his selection.
The EAT in Mugford v Midland Bank summarised the state of the law as
Where no consultation about redundancy has taken place with either
the trade union or the employee the dismissal will normally be unfair,
unless the [employment] tribunal finds that a reasonable employer
would have concluded that consultation would be an utterly futile
exercise in the particular circumstances of the case.
Consultation with the trade union over selection criteria does not of
itself release the employer from considering with the employee
individually his being identified for redundancy.
It will be a question of fact and degree for the [employment] tribunal
to consider whether consultation with the individual and/or his union
was so inadequate as to render the dismissal unfair.
A lack of consultation in any particular respect will not automatically
lead to that result.
The overall picture must be viewed by the tribunal up to the date of
termination to ascertain whether the employer has or has not acted
reasonably in dismissing the employee on the grounds of redundancy.
What is the Pool of Employees?
Occurs before the selection criteria is
Employer should follow the agreed
procedure or ensure the pool of employees
is fairly defined.
The pool should be agreed with the union
An employer should take into account of:
Whether the employees do similar work
Whether employees jobs are interchangeable
Previous work the employees have done
Where an employee is redeployed to
another job and that employee is dismissed
Thomas and Betts Manufacturing v
Harding  IRLR 255.
Lionel Leventhal Ltd v North EAT
Factors to be taken into account:
Whether there is a vacancy;
How different the jobs are;
The difference in pay; and
Length of service.
What is the Selection Criteria?
Tribunals take into account any previously agreed
If incorporated into the contract of employment,
a departure from the procedure needs to be
If not incorporated, a deviation from the
procedure does not prevent the employer from
changing the selection criteria.
Williams v Compair Maxam Ltd  ICR
Selection Criteria continued…
(i) Has it been applied fairly?
(i) Is it discriminatory?
(i) Can it be challenged?
Eaton Ltd v King and ors .
Selection Criteria continued…
The EAT made clear in Williams v Compair Maxam that it is important
that the criteria chosen for determining the selection should not
depend solely upon the subjective opinion of a particular manager but
should be capable of at least some objective assessment.
As the tribunal pointed out, the purpose of such objective criteria is to
ensure that the redundancy is not used as a pretext for dismissing an
employee whom some manager wishes to have removed for some
Consequently the criteria adopted in the Williams case itself which
involved retaining those 'who, in the opinion of the managers
concerned, would be able to keep the company viable' was
However, in Graham v ABF Ltd the EAT refused to find that a tribunal
had erred in law when it concluded that redundancy criteria based on
'quality of work, efficiency in carrying it out and the attitude of the
persons evaluated to their work' were not so intrinsically nebulous and
subjective that they could not form proper criteria for selection.
It did, however, emphasise that the vaguer the criteria the more
important it was for the employer to consult.
Has Suitable Work Been Offered?
Offers must be made before the old
contract ends; and
Must be for work to begin within 4 weeks of
the end of original contract.
Fisher v Hoopoe Finance Ltd EAT
Employer should consult the employee and
provide her/him with sufficient information to
make an informed decision.
Suitable Alternative Work
Is it suitable? Is it reasonable?
Onus is on employer to show the job is
suitable and the employee’s refusal of it
Job content and status.
Pay and other benefits.
Working hours/Change of work place.
x 3 types of trial period:
2. Common law
Time Off Work
s. 52 ERA 1996:
reasonable time off with pay during work hours either to
look for work or to make arrangements for future training.
Whether an employee acts reasonably will depend on:
Length of the notice period;
When the employee requested his/her entitlement;
Provisions of any redundancy procedures agreement;
Effect of the employee’s absence on health and safety; and
Effect of the employee’s absence on the running of the
Employee unreasonably refused time off can bring claim to
ET within 3 months of the day on which time off should
have been granted.
Notice & Counter Notice
s. 86 ERA 1996 ~ statutory minimum
Amount of notice is based on “length of
For counter notice, the “obligatory period”
is the period ending on the expiry of the
If the employer does not agree they must
serve further notice requiring the employee
D. Unfair Dismissal
s. 98 ERA 1996, redundancy is one of
six reasons for dismissal.
(i) Was there a dismissal?
s. 136 (1) ERA 1996
Is there notice of redundancy?
Morton Sundour Fabrics Ltd v Shaw
 ITR 84.
Gateshead Metropolitan Borough
Council v Mills EAT 610/1992.
Did the employer act reasonably?
Williams v Compair Maxam
 ICR 156
Selection criteria objective and
Consult and warn
Discuss with union
Suitable alternative work
Was the employee dismissed for
Sound Business Reason
Martland v Cooperative Insurance Society  ALL
Where an employee is under notice of dismissal
Burden on employee to show:
The employer has acted in fundamental breach of contract
S/he resigned as a result of the breach; and
S/he did not delay in resigning
E. Redundancy Pay
Who can get it?
s. 135 ERA 1996 ~ an employee with 2 years’
Employees laid off and put on short time working
An employee who has accepted or unreasonably
refused suitable alternative employment or resigned
in anticipation of redundancy.
How much is it?
(i) Statutory; and
1.5 week’s pay for each complete year of service after
1 week’s pay for each complete year of service
between ages 22 and 40 inclusive; and
0.5 week’s pay for each complete year of service
£350 per week statutory limit, as from 1 February
“The Relevant Date” and “the Calculation Date”.
Employee may be entitled to an enhanced
Pellowe v Pendragon PLC EAT 804/98.
Employee will need to prove that the
entitlements are incorporated into her/his
contract of employment.
Payments of redundancy pay up to £30,
000 are not subject to deductions for tax.
Lay Off and Short Time Working
This is only effective if provided for in the
contract of employment.
Davies v Hotpoint  IRLR 538.
s. 135 (1) (b) ERA 1996 ~ An employee
who is “LOST” may be able to claim
redundancy payment provided s/he
complies with statutory procedure.
s. 147 ERA 1996 ~ Lay off definition:
Under her/his contract of employment s/he is
required to work in order to be paid; and
S/he gets no work for the week in question and
therefore no pay.
The Statutory Scheme
laid off/put on short time working 4 or more consecutive weeks or
total of 6 weeks ( but no more than 3 consecutive weeks) in a
period of 13 weeks; and
Employee to providing employer with NIC within 4 weeks of the
last weeks of lay off/short time working to which the claim relates;
Where employer resists, they must serve a counter notice; or
If employer does not withdraw a valid counter notice ET to
Employee to terminate contract with one full week’s notice which
must be given within 3 weeks of:
the employers failure to give counter notice ( i.e. 4 weeks from the
the employer’s counter notice; or
Notification of ET’s decision
Continuity important to calculate length of service and
entitlement to redundancy pay
Continuity broken if receive redundancy pay
Senior Heat Treatment v Bell  IRLR 614 at
Secretary of state for Industry v Lassman and
others Pan Graphics (in Receivership) 
F. Collective Consultation &
s. 195 (1) TULR (C) Wider definition
“References to dismissal as redundant are
references to dismissal for a reason not
relates to the individual concerned or for a
number of reasons all of which are not so
Applies to new terms and conditions -
GMB v Man Truck and Bus Ltd
 ICR 1101.
When does the duty arise?
“Proposing to dismiss” as redundant 20 or
more employees at one establishment ….
Junk –v- Kuhnel  IRLR 301
Leicestershire County Council –v- Unison
 IRLR 920
“In good time”
Amicus –v- Nissan EAT 0184/05auxhall
Motors Ltd v TGWU  IRLR 674.
“20 or more”
Optare Group Ltd v TGWU  IRLR 931.
Hardy v Tourism South East  IRLR
When should it take place?
Before notices of dismissal Junk and
UK Cool Mining
When should it end? Vauxhall
Motors Ltd –v- TGWU
What is the nature and purpose?
Reasons for dismissal
What information should be
Reasons for proposals
Numbers and descriptions of
Method of selection
Method of dismissal with due regard
to agreed procedures
Method of calculating redundancy pay
Unfair dismissal – 3 months less one day
Redundancy Payment – 6 months from relevant
Breach of Contract – 3 months less one day
Protective Award – 3 months less one day
Haine v Secretary of State for BERR
 EWCA Civ 262.
Type – liquidation, administrator,
Insolvency – voluntary winding up,
compulsory winding up, floating
Guaranteed payments – 8 weeks pay,
notice pay, holiday pay, basic award
Statutory Redundancy pay