Thus employer A makes widgets. There is a loss of
orders and a diminution in the requirements of produc-
tion. Therefore, anyone dismissed by reason of the general
reduction in orders is to be regarded as redundant. The
contract and function tests need not be applied if the
dismissal is attributable to the loss of orders.
In addition, a redundancy may be ‘bumped’. Thus, if
Jones is to be dismissed because the employer no longer
needs anyone to do his job, the employer may, instead
of dismissing Jones, give him Green’s job and dismiss
Green, e.g. on a first-in last-out basis. Under Murray,
Green may well be found to have been dismissed on the
ground of redundancy (rather than unfair dismissal)
although he has been ‘bumped’ out of his job by Jones.
It should be noted, however, that although the House
of Lords put it in terms that Green’s dismissal was
attributable to redundancy, it does seem that his dis-
missal arises not so much out of the redundancy situa-
tion but rather out of the way it was managed. The
employer saves money by not being sued for unfair dis-
missal where compensation can be higher.
Eligibility
In general terms, all those employed under a contract
of service as employees are entitled to redundancy pay,
including a person employed by his/her spouse. Further-
more, a volunteer for redundancy is not debarred from
claiming. The right to a redundancy payment is no longer
lost at age 65, by reason of the Age Regulations. However,
certain persons are excluded by statute or circumstances.
The main categories are listed below:
1 A domestic servant in a private household who
is a close relative of the employer.The definition of
‘close relative’ for this purpose is father, mother, grand-
father, grandmother, stepfather, stepmother, son, daugh-
ter, grandson, granddaughter, stepson, stepdaughter,
brother, sister, half-brother, or half-sister.
2 An employee who has not completed at least two
years of continuous service.Alternate week working
does not break continuity (Colleyv Corkindale t/a Corker’s
Lounge Bar(1996)). These provisions remain unchanged
under amendments made by the Unfair Dismissal and
Statement of Reasons for Dismissal (Variation of Qualify-
ing Period) Order 1999 (SI 1999/1436), which apply only
to claims for unfair dismissal.
3 An employee who is dismissed for misconduct will
lose the right to a redundancy payment.Thus, if we
look back at the circumstances in the Boychukand
Kowalskicases, we can note that, although these cases
were brought for unfair dismissal, they would also have
been situations in which the employees concerned would
have lost the right to a redundancy payment because it
would be held that the dismissal was not for redundancy.
In such cases, therefore, the only issue will be the possib-
ility of unfair dismissal.
4 An employee who accepts an offer of suitable altern-
ative employment with his employer is not entitled
to a redundancy payment.Where a new offer is made,
there is a trial period of four weeks following the making
of the offer, during which the employer or the employee
may end the contract while retaining all rights and liab-
ilities under redundancy legislation.
An employee who unreasonably refuses an offer of
alternative employment is not entitled to a redundancy
payment, as illustrated in the following case.Part 4Business resources
552
Fullerv Stephanie Bowman(1977)F was employed as a secretary at SB’s premises which
were situated in Mayfair. These premises attracted a
very high rent and rates so SB moved its offices to Soho.
These premises were situated over a sex shop and F
refused the offer of renewed employment at the same
salary and she later brought a claim before an employ-
ment tribunal for a redundancy payment. The tribunal
decided that the question of unreasonableness was a
matter of fact for the tribunal and F’s refusal to work over
the sex shop was unreasonable so that she was not enti-
tled to a redundancy payment.
Comment.
(i)It should be noted that in North East Coast Ship
Repairersv Secretary of State for Employment(1978)
the Employment Appeal Tribunal decided that an appren-
tice who, having completed the period of his apprentice-
ship, finds that the firm cannot provide him with work,
is not entitled to redundancy payment. This case has
relevance for trainees and others completing contracts
in order to obtain relevant practical experience.
(ii)In Elliotv Richard Stump Ltd(1987) the EAT decided
that a redundant employee who is offered alternative
employment by an employer who refuses to accept a trial
period is unfairly dismissed. In Cambridge and District
Co-operative Society Ltdv Ruse(1993) the EAT held that
it was reasonable for an employee to refuse alternative
work if the new job involved what he reasonably believed