Restructures & Reorganisations – Am I Redundant?

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Restructures & Reorganisations – Am I Redundant?

With a challenging economic climate, the news seems to be inundated with reports of redundancies as companies and businesses struggle to keep their workers employed.

Ruthless employers will, however, be tempted to use the economic conditions as an excuse to ‘reorganise’ or ‘restructure’ their business resulting in redundancies. But redundant employees would be wise not to accept the fact that they have been made ‘redundant’ at face value.

What is redundancy?

S.139(1) ERA defines a redundancy as follows: “For the purposes of this Act an employee who is dismissed shall be taken to have been dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to (a) the fact that his employer has ceased or intends to cease (i) to carry on the business for the purposes of which the employee was employed by him, or (ii) to carry on that business in the place where the employee was so employed, or (b) the fact that the requirements of that business (i) for employees to carry out work of a particular kind, or (ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer, have ceased or diminished or are expected to cease or diminish”.

In simple terms, an employee will be genuinely redundant if his or her dismissal is linked to the business ceasing to trade or because of the closure of an office.

This is not always the case though, and employers commonly make employees redundant following a ‘reorganisation’ or ‘restructure’. If this is the case, the employer will only be able to dismiss an employee for redundancy if the employer’s need to do “work of a particular kind” had ceased or diminished.

On the surface it may be seem easy for the employer to demonstrate that work of a particular kind has diminished, but when one scratches below the surface, this is not always the case.

For example, if as part of a restructure, a receptionist is made redundant, but someone else is brought in to do their work either before or shortly after their dismissal, a tribunal is likely to conclude that there is likely to have been no diminution in work, and therefore no redundancy and an unfair dismissal. Likewise, if, as part of a restructure, a part time Office Manager is made redundant, and then replaced with a full time Office Manager, possibly for because they will do the job more ‘efficiently’, again, there is no diminution in work. In fact in this example, it is arguable that there is more work! There will, again be no redundancy and the dismissal will be unfair.

Even if the employer tries to justify their decision to dismiss because it wants the work to be done by a different kind of employee, possibly with a different job title, as long as the same work is being done, there is likely to be no diminution in work and therefore no redundancy.

For example a Cost Technician is made redundant as part of a restructure, and his duties are given to a slightly more junior Purchase Ledger Technician. Despite this, the work still needs to be done. There is no diminution in work and therefore no redundancy and the dismissed employee can claim that he was unfairly dismissed.

Summary

To summarise, employees can be legitimately dismissed for redundancy for 3 main reasons:

1. The closure of a business;
2. The shutting down of a particular location or workplace; or
3. A decreasing requirement for employees to do work of a particular kind.

It is the last category that employers often get caught out. If you have been made redundancy as part of a ‘restructure’, ‘reorganisation’ or ‘efficiency drive’ it is worth asking a solicitor to analyse the situation, as you may not, in fact, have been redundant at all and can bring a claim for unfair dismissal.

To find out more about Redundancy please see our redundancy pages and also our Unfair Dismissal pages.

If you feel you have been made redundant unfairly please do not hesitate to contact us. Either on via the online form on our employment pages or via 0800 014 8727.