Murray and another v Foyle Meats Limited [1999] IRLR 562
In a remarkably short judgment, the House of Lords may have ended years of uncertainty regarding the meaning of redundancy. In Murray and another v Foyle Meats Limited, the Lords decides what amounts to a redundancy situation, interpreting the statute and grappling with the old "contract" and "function" tests.
In 1997 the Employment Appeal Tribunal decided that a simple factual analysis was the correct approach, Safeway Stores Limited v Burrell [1997] IRLR 200.
The Employment Appeal Tribunal's reasoning is adopted in the leading judgment of Lord Irvine, the Lord Chancellor. The statutory definition of redundancy includes reference to dismissals being attributable wholly or mainly to redundancy in the employer's business, including the location of business, and/or a reduction in working of a particular kind (Section 139 Employment Rights Act 1996). Such a straightforward definition has led to numerous problems with Employment Tribunals considering the terms of contracts and becoming involved in endless debates about the functions actually performed or able to be done under the terms of the contract.
The Burrell case led the way and Lord Irvine has now decided that redundancy is a question of fact decided by applying two questions to the statutory definition. Employment Tribunals must ask whether or not one of the sets of economic tests set out in Section 139 is established, eg are less workers needed to perform work of a particular kind? If that is established then the Employment Tribunal must ask whether the dismissal is attributable wholly or mainly to that reason, or whether it is the cause of the dismissal.
Murray had a flexible contract but normally worked in the slaughter hall. The employer reduced the slaughter hall work and the employees were selected for redundancy. The Lords rejected the idea of considering the work that could be done under the contract, and instead decided: 
that there was a reduction in work of a particular kind (ie slaughter work) that the particular reduction in work caused the dismissals to occur that having decided the above questions, the dismissal fell within Section 139.
Lord Irvine rejected the contract approach from a long line of authority, and instead the straightforward analysis in Murray should assist in all redundancy cases. The Lords also confirmed that the reduction in work which causes the dismissal need not relate to the work actually done by the dismissed employee. Thus "bumping" dismissals can be by reason of redundancy, thereby removing some of the uncertainty caused by the decision in Church v West Lancashire NHS Trust [1993] IRLR 4. In any case, whether involving bumping or not, Employment Tribunals should enquire carefully before deciding that the dismissal is caused by the particular circumstances, and the work done in terms of the contract will fall to be determined as part of the overall factual enquiry undertaken by the Tribunal. In a separate case, Shawkat v Nottingham City Hospital NHS Trust [1999] IRLR 340, the Employment Appeal Tribunal has considered the issue of redundancy in a typical reorganisation situation. In this case Mr Shawkat's work altered so that he undertook a new role, but the employer did not need fewer employees and denied that a redundancy situation existed.
The Employment Tribunal applied the Burrell case in a very restrictive sense and this approach was rejected by the Employment Appeal Tribunal. The Employment Appeal Tribunal referred the case back to the Employment Tribunal and confirmed that the terms of the contract and the work done are relevant, but not conclusive factors in applying the statutory test in Section 139.
The Employment Appeal Tribunal adopts a similar approach to the Lords in Murray, in looking to reduce the test to a straightforward factual analysis.
In applying the test to the facts in Shawkat, the Employment Appeal Tribunal offers guidance as to the relevant circumstances to be considered, but they must relate to the facts of the particular case. Shawkat was decided before Murray, but it is generally in line with both the House of Lords and the Employment Appeal Tribunal in Burrell so that we are now left with a simple test of fact. Have the employer's business requirements altered in accordance with Section 139, and has this caused the dismissal? If the answer to those questions is positive then there is a redundancy situation.
The test set out by the Lords is to be welcomed for its simplicity. However, the real world produces facts that do not always sit neatly into simple tests and the real test will be to see how the Lords decision is applied in practice.