16 July 2013
A redundancy pool filled with different skilled workers?
The EAT has recently ruled that an employer is not limited to creating a pool for redundancy purposes only from employees doing the same kind of work.
In the case of Contract Bottling Ltd v Cave & Anor, an employer planning potential redundancies created a pool of employees with very different jobs from which to make redundancies. Those employees were what the Employment Tribunal called "a divergence of skills or totally incomparable skills", and which the Tribunal described as "surprising".
The employer then dismissed the four lowest-scoring employees (even though their jobs still existed) on the basis that those left could be retrained to cover those jobs, for example, a warehouse manager could be retrained in accounting.
The legal test for whether there is a redundancy situation is that there is 'a diminution in the requirement of the business for work of a particular kind'. The redundant employees claimed the test had not been satisfied. They argued that the wording of the legal test meant a pool for redundancies should be made up only of employees doing the same kind of work.
The EAT disagreed and said the test could be satisfied if there was a diminution in the requirement for several different kinds of work, which meant the pool could contain different types of employee. This was merely another form of 'bumping' – where an employee in one job can stay employed by replacing (or 'bumping') another employee with a different job, despite, for instance, being more senior or requiring retraining.
Senior associate lawyer, Kathryn Fielder, concludes: "Employers facing a diminution in their requirement for work generally may be able to create a pool for redundancy made up of employees doing quite different kinds of work, by using 'bumping'. If in doubt, contact the B P Collins employment team for specialist legal advice."