Article / 7 Dec 2020

Genuine redundancy or a set up?

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Gateley Legal

What was the case of Berkeley Catering Ltd v Mrs J Jackson?

Redundancy is a potentially fair reason for dismissal. The Employment Rights Act 1996 defines redundancy as including a situation where there is a reduced requirement for employees to carry out work of a particular kind. In the case of Berkeley Catering Ltd v Mrs J Jackson the issue was whether there was a genuine redundancy situation if there was no reduction in work but the employee was being replaced by someone more senior in the organisation who had ‘undermined’ them in their role. 

What were the facts of the case?

Mrs Jackson had been appointed Managing Director, a role which had previously been undertaken by Mr Patel who was the owner of the company. Mr Patel continued to have a reduced role in the business. Sometime later however he started to spend increasing amounts of time undertaking work Mrs Jackson had been doing. She felt excluded and undermined. Mr Patel responded by announcing that he was to be the CEO and would take control of company management. Her role as MD would be redundant.

What was the court's decision?

The Employment Appeal Tribunal has held that this was a redundancy situation. It was irrelevant that Mrs Jackson had been undermined and treated badly. It was also not a requirement that the employer had to show a diminishing need for staff or a financial need to cut costs. Mr Patel had absorbed the work of the MD and whatever his reasons for doing there was a reduction in the requirement of the business for employees to carry out work of that kind, accordingly there was a redundancy situation.

Key takeaway points

A claimant may feel that they have been “set up” as redundant. However, whether a genuine redundancy situation exists will be decided by reference to the statutory definition. An employer may organise its affairs so that its requirement for employees to carry out particular work is reduced and the reason for dismissal will still be redundancy. The risk that the dismissal is unfair will need to be assessed with reference to the statutory test of “whether in the circumstances … the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee”.

Do you require any more information regarding redundancy as a reason for dismissal?

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