The Employment Appeal Tribunal (EAT) has held in Packman Lucas Associates v Fauchon UKEAT/0017/12 that there does not need to be a reduction in headcount for a dismissal to be by reason of redundancy.

Ms Fauchon provided book-keeping services for Packman Lucas Associates. Packman introduced new accountancy software and also suffered a downturn in business, which led to a diminished need for Ms Fauchon to carry out book-keeping work.  Packman asked Ms Fauchon to work significantly reduced hours; she refused and was dismissed.  Ms Fauchon brought a claim alleging that she had been made redundant and therefore was entitled to redundancy pay.  Packman argued that there could be no redundancy situation where an employer required the same number of employees to carry out work, albeit at reduced hours (Aylwardv Glamorgan Holiday Home Ltd EAT/167/02). 

The EAT disagreed with Packman and upheld the employee's claim.  The wording of s139 of the Employment Rights Act 1996 states that there will be a redundancy if the dismissal is "wholly or mainly attributable to the fact that the requirements of that business for employees to carry out work of a particular kind…have ceased or diminished or are expected to cease or diminish".  The EAT said that the whole phrase must be taken into account and that means there does not necessarily need to be a reduction in headcount; a reduction in the requirements for work of a particular kind is sufficient.