Can a reduction in hours amount to a redundancy?
Section 139(1) of The Employment Rights Act 1996 states the definition of redundancy as follows:-
‘An employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to –
(a) the fact that his employer has ceased or intends to cease –
(i) to carry on the business for the purposes of which the employee was employed by him, or
(ii) to carry on that business in the place where the employee was so employed, or
(b) the fact that the requirements of that business –
(i) for employees to carry out work of a particular kind, or
(ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer, have ceased or diminished or are expected to cease or diminish.’
The leading case on establishing whether an employee has been dismissed by reason of redundancy is Safeway Stores plc v Burrell  IRLR 200 (EAT)where the Employment Appeal Tribunal formulated a three-stage test for applying Section 139of ERA 1996:
1. Was the employee dismissed? If so,
2. Had the requirements of the business for employees to carry out work of a particular kind ceased or diminished (or did one of the other economic states of affairs in section 139(1) exist)? If so,
3. Was the dismissal of the employee caused wholly or mainly by the state of affairs identified at stage 2 above?
Only if the answer at all three stages is “yes” will there be a redundancy dismissal.
There has been uncertainty as to whether a reduction in the number of employees is required when there is a reduction in the number of hours. In Aylward v Glamorgan Holiday Home Ltd t/a Glamorgan Holiday Hotel EAT/0167/02, eight employees claimed redundancy payments after being dismissed for refusing to agree to reduced hours. The employer sought, in view of its financial difficulties, to reduce the time worked from 52 to 42 weeks a year (although employees would still be employed for all 52 weeks of the year, their pay would be reduced). The EAT found that this was a variation of contract issue which did not involve the question of redundancy because fewer employees were not required.
In Packman t/a Packman Lucas Associates v Fauchon  IRLR 721the EAT departed from Aylwardon the basis that it relied on a misunderstanding of the three stage test in Safeway. The EAT held that it is not necessary for headcount to reduce in order to satisfy the statutory definition of redundancy under section 139(1)(b)(i) of the ERA 1996. If the amount of work available for the same number of employees is reduced (as in this case), then a dismissal of an employee caused wholly or mainly for that reason can be a redundancy. However, if there is just as much work for just as many employees, then a dismissal arising out of the situation said to give rise to that would not be for redundancy because there would be no reduction in the requirements of the business to carry out work of a particular kind.
Replacing part-time work with full-time work (therefore increasing the amount of work overall) does not amount to redundancy. In Barnes v Gilmartin Associates EAT/825/97the dismissal of a part-time secretary and her replacement by a full-time secretary was not for redundancy as the requirement for secretarial work had not diminished.
There are no satisfactory authorities on whether part-time work as opposed to full-time work is “work of a particular kind”. However, the latest case law (Fauchon) is clear that there does not need to be a reduction in the number of employees. If the amount of work available is reduced, then a dismissal of an employee caused wholly or mainly for that reason can be a redundancy.