Martland v Co-operative Insurance Society
If a business does not need as many employees to do work “of a certain kind” then, according to the law, they are redundant. In Martland v Co-operative Insurance Society, the Employment Appeal Tribunal (EAT) said that it was for tribunals to decide whether the work had changed so much that it could be described as being “of a different kind” from the work that had been done before.
Basic facts
In 2005 the Co-op terminated the contracts of all its financial advisors due to huge operating losses. It then offered them new contracts including a new payment system, more rigorous performance management and an end to the old system of collecting members’ dues.
Some advisors accepted the new terms and stayed on, but others left. Those who left claimed that they had been made redundant and were therefore entitled to redundancy payments because their jobs had changed so significantly.
Tribunal decision
The tribunal said that the real question to resolve was whether the advisors were being asked “to carry out work of a particular kind which was different to the work they had performed under their existing contracts”. If so, then they had been made redundant under section 139(1)(b) of the Employment Rights Act 1976.
To decide this question, the tribunal needed to look at whether the changes to their terms and conditions in reality had resulted in them being asked to sign up to new terms that amounted to “a different kind of job”.
The tribunal said that that although the advisors’ jobs had changed significantly, they were still essentially employed as “salesmen” with their pay based on commission from products they sold to customers.
Although the company was introducing additional channels for selling and the advisors would be required to be more aggressive in their selling, it was still in reality the same work. It would just be carried out in a different way in future.
In the view of the tribunal, the changes therefore represented a reorganisation of the salesforce by the Co-op, not a redundancy situation, to stem the colossal losses that it had been experiencing. The advisors had therefore been dismissed “for some other substantial reason”.
EAT decision
And the EAT agreed. It said that the tribunal had looked at what the claimants did in reality and not what their contracts said when deciding whether they were no longer being required to carry out work “of a certain kind”. This was the correct test to apply.
Although the tribunal made the observation that the changes were required for sound commercial reasons, the EAT did not think it had been swayed by this factor when coming to their decision.
It did not consider that the tribunal’s decision was perverse, even though it had made clear in its judgment that the jobs of the advisors had changed significantly. This, said the EAT, was a question of fact and it was therefore up to the tribunal "to consider whether the change in the nature and quality of the tasks and the way in which they were being carried out is sufficient to justify an inference that the work could now be described as being of a different kind or not."
Although another tribunal might have come to a different conclusion, it was not for the EAT to make that assessment. In this case, it was satisfied that there was no basis for saying that this decision was so off beam that it could properly be described as perverse.
The tribunal “concluded that the essence of the job was selling, and that the changes in the method of performance and the removal - largely albeit not entirely - of the regular links with clients did not justify the inference that there was a different kind of job being performed. In our judgment, that was a decision which the Tribunal was plainly entitled to reach and for which it gave clear reasons.”
The appeal was therefore dismissed.