Redundancy: headcount reductions

An Employment Appeal Tribunal (EAT) decision clarifying the statutory definition of redundancy will be welcomed by business owners. The EAT confirmed that it is not necessary to have a reduction in the number of employees carrying out work of a particular kind in order for it to be a true redundancy. Therefore, reducing the amount of work to be done by the same number of employees can give rise to a redundancy situation.

However, the decision does not mean that a reduction in hours will always amount to a redundancy. The question of whether a change in working pattern or reorganisation leads to a redundancy is fact specific. In this case, an employee who provided book-keeping services to a company was asked to significantly reduce her weekly hours as a result of a downturn in business and the introduction of an accountancy software package. The employee refused to work reduced hours and was dismissed.

Our checklist summarises the key issues that a business needs to be aware of when dealing with a redundancy situation.