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Restructuring vs Redundancy

Is Restructuring the same as Redundancy?

Re-organisations are concerned with employers making changes either to terms and conditions of employment or to personnel as part of its efficiency driven measures to improve productivity and profitability.

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Where changes are detrimental, they can potentially amount to fundamental breaches of contract, which could give rise to claims for constructive unfair dismissal. In case of the latter, they could result in redundancy situations.

The question of whether a 'reorganisation' is in fact a redundancy exercise is fact sensitive. As it was put by Burton P in Kingwell and others v Elizabeth Bradley Designs Ltd EAT/0661/02 (paragraphs 3 and 9):

Redundancy does not only arise where there is a poor financial situation at the employers… It does not only arise where there is a diminution of work in the hands of an employer… It can occur where there is a successful employer with plenty of work, but who, perfectly sensibly as far as commerce and economics is concerned, decides to reorganise his business because he concludes that he is overstaffed. Thus, even with the same amount of work and the same amount of income, the decision is taken that lesser number of employees are required to perform the same functions. That too is a redundancy situation… it is not an automatic consequence of there being a business 'reorganisation' that there is a redundancy; nor is there a need for a business 'reorganisation' in order that there should be a redundancy situation. The two are entirely self-standing concepts. But if a business 'reorganisation' leads to a diminution in the requirement for employees carrying out the relevant work, then that business 'reorganisation' leads to a redundancy situation and if not, not.

At Premier Solicitors, our experienced client focused employment team can be relied upon to provide expert practical legal advice to help you resolve your concerns about your treatment at work.

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