Redundancy and Layoffs in UK Law

Thus, in the case of incapacity, the employer will normally not act reasonably unless he gives the employee fair warning and an opportunity to mend his ways and show that he can do the job; in the case of misconduct, the employer will normally not act reasonably unless he investigates the complaint of misconduct fully and fairly and hears whatever the employee wishes to say in his defence or in explanation or mitigation; in the case of redundancy, the employer will normally not act reasonably unless he warns and consults any employees affected or their representative, adopts a fair basis on which to select for redundancy and takes such steps as may be reasonable to avoid or minimise redundancy by redeployment within his own organisation.

If it is held that taking the appropriate steps which the employer failed to take before dismissing the employer would not have affected the outcome, this will often lead to the result that the employee, though unfairly dismissed, will recover no compensation or, in the case of redundancy, no compensation in excess of his redundancy payment.

It is settled by those cases that an employer is entitled toreorganise his business so as to improve its efficiency and, in so- doing, to propose to his staff a change in the terms and conditions of their employment: and to dispense with their services if they do not agree. Such a change does not automatically give the staff a right to redundancy payments. It only does so if the change in the terms and conditions is due to a redundancy situation.

In my judgment, in a case where the reason or principal reason for dismissal is redundancy but the employer acted unreasonably in some particular respect in the process of selecting the applicant for redundancy so that the dismissal was rendered unfair, it is for the industrial tribunal to decide what it is just and equitable in all the circumstances to award the applicant, having regard to the loss sustained by the applicant in so far as that loss is attributable to action by the employer (s.74(1) of the Act).

A reason for the dismissal of an employee is a set of facts known to the employer, or it may be of beliefs held by him, which cause him to dismiss the employee. If at the time of his dismissal the employer gives a reason for it, that is no doubt evidence, at any rate, as against him, as to the real reason, but it does notnecessarily constitute the real reason.

As this is one of our first cases on the Redundancy Payments Act, 1965, it is as well to remind ourselves of the policy of this legislation. As I read the Act, a worker of long standing is now recognised as having an accrued right in his Job; and his right gains in value with the years. So much so that, if the Job is shutdown, he is entitled to compensation for loss of the Job - Just as a director gets compensation for lossof office.

It is not always easy to reconcile these authorities since as is to be expected they are frequently concerned with situations close to the borderline between payments which fall within and payments that fall without the statutory provision. In each case ultimately it is a matter of applying the statutory language to the facts.