Dismissal due to business reasons in the UK
| Autor | Dr. Mark Butler |
| Páginas | 53-61 |
Page 53
Dismissals due to economic reasons in the UK is effectively considered under two different systems, depending on the number of dismissals taking place; however, it must be noted that one system does not automatically mean compliance with the other, and as such where there are in excess of 20 dismissals it is probably better viewed as an additional element of obligation rather than two distinct and mutually exclusive systems.
Between January 2013 and March 2014, according to Office for National Statistics, there have been 624,000 dismissals in the UK for redundancy reasons.
The UK legal system allows dismissals due to business reasons in two different contexts. Where the dismissal forms part of a collective set of dismissals a wide definition contained in s.195(1) of the Trade Union Labour Relation (Consolodation) Act 1992 (TULRCA, hereinafter) is applied, which covers ‘references to dismissal as redundant are references to dismissal for a reason not related to the individual concerned or for a number of reasons all of which are not so related’. Where the dismissal is individual (or less than 20) rather than the collective (more than 20) there is a requirement that any such dismissal is fair in accordance with the law relating to unfair dismissal pursuant to Part X of the Employment Rights Act 1996 (ERA, hereinafter). Such dismissals are defined at s.139 ERA, which considers them through three distinct sub-categories:
· When the employer is ceasing business
Falling within this sub-category is relatively easy to determine. It simply requires looking at whether a business which was previously in operation has shut down. However, this category does not just cover permanent cessations of business but also covers temporary cessations, and thus if a business closes down for renovation purposes for a matter of months this might also fall within this category.
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· When the employer is moving his place of business
It is clear from case law, including Managers (Holborn) Ltd v. Hohne [1977] IRLR 230, that not all business premises moves could justify dismissal, but only moves that were deemed to be substantial. Thus determining the employee’s place of work was important in order to determine how substantial such a move of premises was. Judicial confusion surrounding the correct test for determining an employee’s place of work was brought to an end by the Court of Appeal in Bass Leisure Ltd v. Thomas [1997] IRLR 513. The Court of Appeal held that the correct approach was a factual approach, which looked at where in fact the employee actually worked on a daily basis, rather than a contractual approach, which took into account contractual provisions such as mobility clauses which may have provided alternative places of work for an employee.
· When the employer is reducing his workforce number
This is quite a wide category, and covers a number of different situations including where there is less work available for the workforce, or where the work is being rationalized or where more efficient practices are being adopted. The question to be asked is whether requirement of the employer for employees to do work of a particular kind has ceased or diminished? The employer is free to adopt the most efficient practices, and it is difficult to question such managerial decisions.
In the UK legal system, where the dismissals are affecting more than 20 workers then the focus will be on the single establishment (the workplace) at which the worker is employed. This is in line with the jurisprudence of the Court of Justice of the European Union (CJEU, hereinafter); however, the Court of Appeal in the recent Woolworths litigation has referred this matter to the CJEU, asking the question whether such dismissals ought to be viewed across the whole company or individual...
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