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Redundancy – Jan 2018

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Reasons behind redundancy

Many practice owners mistakenly believe that they can simply make a person redundant in order to cut costs or avoid using the correct disciplinary procedures to terminate a member of staffs’ employment. This is not the case and may open the door to expensive and time consuming claims.

A valid redundancy situation occurs where an employer decides it needs to reduce the number of its employees across the business, at a particular site or from a particular job type or role within the business. This decision of the practice may be made due to a variety of factors such as economic pressures, the relocation of the business or changes in the nature of how it arranges surgeries or staffing. And as long as the tribunal is satisfied that redundancy was the genuine reason behind a dismissal it will not look at how the situation arose.

The test for determining whether an employee has been dismissed by reason of redundancy is a 3 stage process established in the case of Safeway v Burrell:

  1. Was the employee dismissed? If so,
  2. Had the business requirements for employee to carry out work of a particular kind ceased or diminished? And
  3. Was the dismissal at stage 1 wholly or predominantly caused by the business requirement at stage 2?

Only if all 3 of these criteria are passed will there be a redundancy dismissal.

This test shows that whilst redundancy is a potentially fair reason for dismissal, care must be taken when identifying the reasons necessitating the redundancy. If your reason relates to the person and not the position, then it is unlikely to be a genuine redundancy dismissal.

If you are unsure as to whether you have a valid redundancy situation or need advice as to the onerous consultation obligations following the correct procedure can entail, please contact us at FTA law.

The team at FTA Law provides advice to clients across the commercial and healthcare sectors with many of our instructions coming from referrals from long standing clients and industry contacts.

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