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EAT sets out the correct approach to determine if redundancy is the principal reason for dismissal

In Arnold Clark Automobiles Limited v Mak, Mak, a training specialist, mostly involved in setting up and developing staff at new contact centres, was made redundant after the employer decided that no more centres would be opened.  The tribunal found that Mak was in a genuine redundancy situation, as her work was to cease and she was in a 'pool of one' because she was the only person carrying out that role. However, the tribunal decided that redundancy was not the “operative reason” for the dismissal and was unfair. Mak had alleged that Hadden, a manager in her department, was mistreating her after she had challenged him about having an affair with a team member. The tribunal concluded that but for the 'Hadden' problem, Mak would have been retained. 

The EAT allowed the employer's appeal. Two cases, Safeways Stores plc v Burrell [1997] ICR 523 and Murray v Foyle Meats Ltd [1999] ICR 827 show there are three tests to be considered in redundancy situations:

1.     Has the employee has been dismissed?

2.     Had the requirements of the business for employees to carry out work of a particular kind ceased or diminished?

3.     Was the dismissal attributable, wholly or mainly, to the fact that work had ceased or diminished? 

In this case, the tribunal correctly identified the first and second limbs of the test and found them as satisfied, but then fell into error on the third limb, by developing a “gloss” on the approach, by looking for the “operative reason”. The correct way is: if the answer to (3) is “yes”, then the reason for dismissal is redundancy, but if the answer is “no”, then the tribunal has to try and identify the real reason (if it can) and justify making that finding. So here, the case would go back to the tribunal to apply the third part of the test properly.

 

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