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Redundancy and Bumping

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Thanks to Ed McFarlane of Deminos HR for preparing this case summary

May an employee be dismissed for redundancy where the employee's own job remains, but the needs of the business for different kinds of employee reduces?

Yes, held the EAT (HHJ Richardson presiding) in Contract Bottling Ltd v Cave. The Claimants worked in the Respondent's accounts department and were unfairly dismissed after a redundancy exercise in which a group of staff with diverse functions were put in a 'rather surprising' pool, with the lowest scoring four staff dismissed regardless of job function. Remaining staff were retrained to fill gaps, even if it would have meant retraining a warehouse manager in accounting. The Employment Tribunal rejected redundancy as the reason for the dismissals.

The Employment Appeal Tribunal held that the dismissals were for redundancy and were a form of 'bumping'. Applying the well-known two-stage test of Murray v Foyle Meats, the EAT held that the first stage of the test, of a 'diminution in the requirement of the business for work of a particular kind' can be met in respect of several kinds of work, not just individual kinds of work.

The EAT declined to overturn the finding of unfair dismissal, but held that the Tribunal should have considered a Polkey reduction, following Software 2000 Ltd v Andrews; the evidence showed a need to reduce manpower, with a new accounting computer package requiring staff reductions in the accounts function. The EAT said that Tribunals should grapple with the evidence available and give reasons for decisions on Polkey reductions.

The case was remitted to the same Tribunal for reconsideration of the Polkey issue.