UK: Redundancy - continued confusion over whether reduction in total hours, rather than total employees, qualifies

Last month we reported an EAT ruling (Packman) that a reduction in total employee hours needed, ie in full-time equivalent employees, could be a redundancy situation entitling a dismissed employee to claim a statutory redundancy payment. Hot on its heels is a decision of the Scottish EAT this month apparently taking the opposite approach and concluding that a reduction in the number of individual employees is necessary. (Welch v The Taxi Owners Association, EATS)

However, the claimant in the latest case did not actually claim statutory redundancy pay;  instead the EAT found that she was really claiming that she ought to have been made redundant and was unfairly constructively dismissed because she was not.  In our view Packman is to be preferred. 

Of course the issue will only arise where the reduction in hours can be shown to be attributable to a reduction in work and where there is an actual dismissal for refusing to agree to the reduction, or a constructive dismissal (ie, the employee can show that a unilateral reduction in hours is a fundamental breach of contract and resigns in response).