Employment Rights Act 1996, section 139

Redundancy

Part XI Redundancy payments etc.

(1)For the purposes of this Act 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.

(2)For the purposes of subsection (1) the business of the employer together with the business or businesses of his associated employers shall be treated as one (unless either of the conditions specified in paragraphs (a) and (b) of that subsection would be satisfied without so treating them).

(3)For the purposes of subsection (1) the activities carried on by a [F848local authorityF848] with respect to the schools maintained by it, and the activities carried on by the [F849governing bodiesF849] of those schools, shall be treated as one business (unless either of the conditions specified in paragraphs (a) and (b) of that subsection would be satisfied without so treating them).

(4)Where—

(a)the contract under which a person is employed is treated by section 136(5) as terminated by his employer by reason of an act or event, and

(b)the employee’s contract is not renewed and he is not re-engaged under a new contract of employment,

he shall be taken for the purposes of this Act to be dismissed by reason of redundancy if the circumstances in which his contract is not renewed, and he is not re-engaged, are wholly or mainly attributable to either of the facts stated in paragraphs (a) and (b) of subsection (1).

(5)In its application to a case within subsection (4), paragraph (a)(i) of subsection (1) has effect as if the reference in that subsection to the employer included a reference to any person to whom, in consequence of the act or event, power to dispose of the business has passed.

(6) In subsection (1) “cease” and “diminish” mean cease and diminish either permanently or temporarily and for whatever reason.

[F850 (7) In subsection (3) “local authority” has the meaning given by section 579(1) of the Education Act 1996 . F850]

Definitions used in section 139 9

employee

(1) In this Act “employee” means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.

Defined in s.230(1) · see it in the full Act
dismissed

“dismissal” and “dismissed” shall be construed in accordance with sections 136 to 138,

Defined in s.181(1) · see it in the full Act
dismissal

“dismissal” and “dismissed” shall be construed in accordance with sections 136 to 138,

Defined in s.181(1) · see it in the full Act
employer

(4) In this Act “employer”, in relation to an employee or a worker, means the person by whom the employee or worker is (or, where the employment has ceased, was) employed.

Defined in s.230(4) · see it in the full Act

(6) This section has effect subject to sections 43K , 47B(3) and 49B(10) ; and for the purposes of Part XIII so far as relating to Part IVA or section 47B, “worker”, “worker’s contract” and, in relation to a worker, “employer”, “employment” and “employed” have the extended meaning given by section 43K.

Defined in s.230(6) · see it in the full Act
business

“business” includes a trade or profession and includes any activity carried on by a body of persons (whether corporate or unincorporated),

Defined in s.235(1) · see it in the full Act
employed

and “employed” shall be construed accordingly.

Defined in s.230(5) · see it in the full Act

(6) This section has effect subject to sections 43K , 47B(3) and 49B(10) ; and for the purposes of Part XIII so far as relating to Part IVA or section 47B, “worker”, “worker’s contract” and, in relation to a worker, “employer”, “employment” and “employed” have the extended meaning given by section 43K.

Defined in s.230(6) · see it in the full Act
local authority

“local authority”, in relation to the placement of children under section 22C of the Children Act 1989 , has the same meaning as in that Act (see section 105(1) of that Act );

Defined in s.235(1) · see it in the full Act
act

“act” and “action” each includes omission and references to doing an act or taking action shall be construed accordingly,

Defined in s.235(1) · see it in the full Act
contract of employment

(2) In this Act “contract of employment” means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing.

Defined in s.230(2) · see it in the full Act

Cases considering section 139 82

Cartwright v King's College, London

[2010] EWCA Civ 1146 · 27 October 2010Interprets

Applies the statutory definition of redundancy to identify the governing condition and causal link for the dismissal. (see paras [78]-[82]) Treats the inquiry as whether a qualifying business state of affairs existed and whether the dismissal was wholly or mainly attributable to it. (see paras [79]-[82]) Recognises cessation of the business or its relevant operations as an alternative statutory state of affairs, although the present case principally engaged section 139(1)(b). (see paras [79]-[82]) Applies the diminished-work route: the requirements for employees to carry out work of a particular kind had ceased, and the dismissal was attributable to that cessation. (see paras [79]-[82])

Home Office v Evans & Anor

[2007] EWCA Civ 1089 · 2 November 2007Defines

The court used the statutory definition of redundancy, together with the consultation obligation, to distinguish a redundancy situation from a dismissal or proposed dismissal by reason of redundancy. A redundancy situation alone did not engage the contractual redundancy procedure where mobility was chosen (see paras [63]-[66]).

Lambe v 186K Ltd.

[2004] EWCA Civ 1045 · 29 July 2004Defines

The court identified this section as supplying the statutory meaning of dismissal by reason of redundancy. (see para [23]) A redundancy exists where dismissal is wholly or mainly attributable to the business’s ceased, diminished or expected-to-diminish requirement for employees to perform work of a particular kind. The tribunal’s findings fell comfortably within that definition. (see paras [23]; [31]-[35])

62 more judgments, and what each says about section 139, are in the case-law panel in the full Act.

Amendments and notes

7 notes from legislation.gov.uk

Amendments

  1. F848Words in s. 139(3) substituted (5.5.2010) by The Local Education Authorities and Children's Services Authorities (Integration of Functions) Order 2010 (S.I. 2010/1158), art. 1, Sch. 2 para. 41(4)(a)
  2. F849Words in s. 139(3) substituted (1.10.2002 except in relation to W. and otherwise 19.12.2002) by Education Act 2002 (c. 32), s. 215(1), Sch. 21 para. 31 (with ss. 210(8), 214(4)); S.I. 2002/2439, art. 3; S.I. 2002/3185, art. 4, Sch. Pt. 1
  3. F850S. 139(7) inserted (5.5.2010) by The Local Education Authorities and Children's Services Authorities (Integration of Functions) Order 2010 (S.I. 2010/1158), art. 1, Sch. 2 para. 41(4)(b)

Modifications

  1. C174S. 139 applied (1.4.1999) by 1998 c. 31, s. 57(6)(7); S.I. 1999/1016, art. 2(1), Sch. 1
  2. C175S. 139 applied (1.10.2002 except in relation to W.) by Education Act 2002 (c. 32), s. 37(6) (with ss. 210(8), 214(4)); S.I. 2002/2439, art. 3
  3. C176S. 139 applied by 2015 c. 26, s. 153A(5) (as inserted (1.2.2017) by Enterprise Act 2016 (c. 12), ss. 41, 44(4)(b); S.I. 2017/70, reg. 2(b))
  4. C177S. 139(3) extended (temp. from 1.4.1999 to 1.9.1999) by S.I. 1999/638, reg. 4