In the complex landscape of UK employment law, three terms often surface in discussions around employee rights and employer obligations: “lay off”, “dismissal”, and “making redundant”. While they may seem similar, there are key differences between them that are crucial to understand. This article will explore these concepts and their distinctions in accordance with UK law and precedent cases.
Lay Off
A lay off occurs when an employer temporarily suspends an employee’s work, and consequently their pay, due to a lack of available work. This is typically a short-term solution used by employers during periods of economic downturn or organisational restructuring. The right to lay off an employee must be explicitly stated in the employment contract or be a customary practice within the industry.
Dismissal
Dismissal, on the other hand, is when an employer terminates an employee’s contract for reasons related to the employee’s conduct or capability. This could include misconduct, poor performance, or a failure to carry out their duties. The employer must follow a fair procedure, which includes informing the employee of the reason for their dismissal, holding a meeting to discuss the issue, and providing the right to appeal.
Making Redundant
Making redundant is a form of dismissal that occurs when an employer needs to reduce their workforce. This could be due to the closure of the business, a workplace, or a decrease in the need for employees to do a particular kind of work. Similar to dismissal, employers must follow a fair redundancy process, which includes selecting employees for redundancy in a fair way, consulting with employees, and considering suitable alternative employment.
Precedent Cases
Several precedent cases highlight the differences between these concepts. For instance, in the case of Nicholls v Rockwell Automation Ltd (2012), the Employment Tribunal considered whether an Employment Tribunal was entitled to closely examine the scoring in a redundancy selection process in order to determine whether the dismissal was unfair.
In another case, Mhindurwa v Lovingangels Care Limited (2021), the Tribunal held that an employee was unfairly dismissed where the employer failed to consider using the Coronavirus Job Retention Scheme as an alternative to redundancy.
In Aylward v Glamorgan Holiday Home Ltd, the Employment Appeal Tribunal held that to satisfy the provisions of s139 (1) (b) (i), a reduction in the headcount is required, and that accordingly where employees were dismissed for refusing to work reduced hours there was no redundancy.
Understanding the differences between lay off, dismissal, and making redundant is crucial for both employers and employees. Employers must ensure they follow the correct procedures and act reasonably to avoid potential claims of unfair dismissal or redundancy. Employees, on the other hand, should be aware of their rights and the recourse available to them if they believe they have been unfairly dismissed or made redundant.
