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Redundancy: headcount reductions

PLEASE NOTE: Information in this article is correct at the time of publication, please contact DFA Law for current advice on older articles.

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.

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