Earlier this month, we reported that the EAT in Packman v Fauchon had held that there can be a redundancy even though there is no reduction in the workforce headcount. Now the Scottish EAT, in Welch v The Taxi Owners Association (Grangemouth) Ltd, has reached a different conclusion.
As in Packman, this case revolved around a decision, taken in the light of a business downturn, to reduce an employee's hours. The claimant, a radio control operator for a taxi company, resigned when her weekly hours were cut from 36 to 28. The Tribunal found that she was not unfairly constructively dismissed. Although the reduction in hours was a fundamental breach of contract, it was justified in circumstances where competition from another cab operator had led to a slump in business.
The Tribunal went on to decide that there was no question of redundancy since, although the employer's need to have the claimant (and the other night-time operator) work as many hours as before had reduced, there was no reduction in their need for employees to work as radio control operators.
On appeal, the EAT agreed with the Tribunal's conclusions. On the redundancy point, the EAT did not think it was strictly relevant but agreed that the key question was "did the employer need fewer employees to do the work?" As the answer to that was no, there could not be a redundancy situation.
Packman was different in that the claimant refused the request to reduce her hours and was dismissed, but the EAT in that case was firm in its view that reduced demand alone can constitute a redundancy and that the previous EAT case, Aylward v Glamorgan Holiday Home Ltd, which had suggested otherwise, was wrong. The way the EAT rationalised this in Packman does appear logical: if the needs of the employer's business are for fewer employees to do the same amount of work, and employees are dismissed for that reason, they are dismissed by reason of redundancy, so, by the same token, if the amount of work available for the same number of employees is reduced, then a dismissal wholly or mainly for that reason is also a redundancy.
It is clearly unsatisfactory to be left with two EAT decisions on the same point and, despite limited endorsement in this latest case, it is probably not safe to rely on Aylward.