In Murray v Foyle Meat Ltd, the then Lord Chancellor, Lord Irvine said that the language of one of the statutory definitions of redundancy – the requirements of the business for employees to carry out work of a particular kind have diminished – is “simplicity itself”. The EAT’s decision in Servisair UK Ltd v O’Hare and others shows that difficulty remains in identifying when a redundancy situation exists.

In this case, the number of flights dealt with in and out of Gatwick airport was expected to drop by 34%. As a result it was necessary to cut costs by reducing the employee headcount, including reducing the number of full time dispatchers by 12, with Grade 5 roles being replaced by new Grade 4 roles. An employment judge decided there was no redundancy situation. She found that as Grade 4 and 5 work was identical, there was no diminution in the type of work carried out by dispatchers. The reason for dismissal was cost, i.e. Grade 4 could do the same job for less money.

The EAT upheld the employees’ appeal. The judge had applied the wrong test. The judge stated that for there to be a redundancy, the employer’s requirements for work of a particular kind to be carried out had to have diminished. But that’s not what the law says. It requires that the requirements of the business for employees to carry out work of a particular kind have [ceased] or diminished. By missing out the for employees element, the judge had mistakenly thought that because there was no diminution in the type of work carried out by dispatchers, there was no redundancy. Applying the right test, there was a prima facie case that a redundancy situation existed as it was clear from the evidence that less employees were needed.

This case highlights that the question is not whether work of a particular kind done by employees has ceased or diminished, but whether the requirement for employees to do that work has ceased or diminished; in other words, reduced headcount.