Shawkat v Nottingham City Hospital NHS Trust (No 2)

Under the Employment Rights Act 1996, a reorganisation or change in duties does not itself establish redundancy. The tribunal must decide as a question of fact whether the employer’s requirements for employees to carry out work of a particular kind have ceased or diminished, and whether the dismissal was wholly or mainly attributable to that state of affairs. Different work or skills performed by a replacement may be relevant, but does not compel that conclusion. An appellate court should not disturb the tribunal’s factual decision unless its reasons disclose an error of law. The appeal was dismissed.

Dr Shawkat, a staff-grade thoracic surgeon, declined proposed changes requiring him to undertake cardiac work and was dismissed. He claimed unfair dismissal and a redundancy payment. The employment tribunal upheld the unfair-dismissal claim but rejected redundancy. Following remittal for further findings, it found that the Trust’s requirements for employees to carry out thoracic surgery had not diminished. The Employment Appeal Tribunal dismissed his appeal, finding no reasonably arguable error of law. The issue before the Court of Appeal was whether the different work performed by a replacement necessarily established diminished requirements under the Employment Rights Act 1996.

Longmore LJ delivered the judgment, with Robert Walker LJ agreeing. The appeal was dismissed.

1. The statutory redundancy inquiry under section 139(1) of the Employment Rights Act 1996 has three stages: whether the employee was dismissed; whether the employer’s requirements for employees to carry out work of a particular kind had ceased or diminished, or were expected to do so; and whether the dismissal was wholly or mainly caused by that state of affairs. The formulation in Safeway Stores Plc v Burrell [1997] ICR 523 was endorsed by the House of Lords in Murray v Foyle Meats [1999] ICR 827.
2. Whether the statutory requirements had ceased or diminished was a question of fact for the employment tribunal. Reorganisation, reallocation of functions, or a change in the work required did not make redundancy inevitable. Murphy v Epsom College [1985] ICR 80 confirmed that the nature and effect of the reorganisation had to be assessed in each case. Robinson v British Island Airways Ltd [1978] I.C.R. 304 showed that reorganisation might or might not result in redundancy.
3. The fact that a replacement employee performed work of a different kind or possessed different skills and abilities could be taken into account, but did not compel a finding of diminished requirements. Lord Clyde’s observation in Murray was not intended to depart from Lord Irvine LC’s treatment of the issue as factual. The broader interpretation in Harvey on Industrial Relations was rejected.
4. The tribunal was entitled to focus on the Trust’s continuing requirement for thoracic surgery. The reduction in Dr Shawkat’s thoracic sessions resulted from the proposed allocation of time to cardiac work, not from any diminution in the need for thoracic surgery. The change in duties could support the unfair-dismissal finding, but did not itself establish redundancy. Even if thoracic requirements had diminished, causation would have been difficult to establish on the findings.

The appeal was dismissed with costs subject to detailed assessment. Permission to appeal to the House of Lords was refused.

1. Court of Appeal (Civil Division): In [2001] EWCA Civ 954, the court dismissed the appeal with costs subject to detailed assessment and refused permission to appeal to the House of Lords.
2. Employment Appeal Tribunal: The EAT held that the second employment tribunal decision disclosed no reasonably arguable error of law and dismissed the appeal.
3. Employment tribunal: The first decision upheld the unfair-dismissal claim but refused a redundancy payment. After remittal for further findings, the tribunal concluded that the Trust’s requirements for employees to carry out thoracic surgery had not diminished.