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When a dismissal is not a redundancy

Martland vs Cooperative Insurance Society

Key facts

Martland, an insurance salesman, was dismissed for ‘some other substantial reason’ and immediately offered re-employment in a very similar role on lesser terms and conditions. The employees argued that they had been made redundant and were therefore entitled to benefit from the company’s contractual redundancy payment scheme.

Decision

The EAT supported an earlier decision in the Tribunal in finding that the similarities between the roles meant that the position had not been redundant as there was clearly a continuing need for the work to be done.

Our view

In certain circumstances, it is worth remembering that it is possible to make significant changes to terms and conditions of employment, and dismiss those who do not accept them, without creating a redundancy situation and an obligation to pay a redundancy payment.

Provided that the employer can show that the employee's new terms and conditions involve the same kind of work the employee was doing before, then no redundancy situation will arise. What is more, there will be no obligation to pay a redundancy payment if the new role is unreasonably refused.