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Recruitment of replacement employee led to a redundancy situation

05 April 2013 #Employment

In Malekout v Ahmed & others (t/a The Medical Centre) UKEAT/0556/12 the Employment Appeal Tribunal has upheld the decision that a redundancy situation existed when an employee was dismissed following recruitment of a better performing replacement.

After Practice Manager M, had indicated he was thinking of resigning from his post, his employer recruited a replacement K, initially on a short term basis as a ‘trouble shooter’ to avoid being left without a Practice Manager should M leave. K proved to have a positive impact on the running of the Medical Practice, he assumed greater responsibilities for management of the practice and it was apparent that he was performing tasks that M had failed to complete. M then decided to remain at the practice effectively leaving the employer with two people (M and his replacement K) for the one position of Practice Manager. They decided to retain recently recruited K and dismissed M for redundancy.

The Employment Appeal Tribunal agreed with the Employment Tribunal’s finding that this was a redundancy situation. The Medical Centre required only one employee not two, to perform the tasks of Practice Manager. This represented diminished requirements of the Medical Centre for employees to carry out work of a particular kind as defined in s.139 Employment Rights Act 1996. The case reiterates that in determining a redundancy situation it is the requirements or needs of the business which are important and reduced requirements and so a potential redundancy situation may not be difficult to establish before a Tribunal.

But even though a redundancy situation may exist, it is still for a Tribunal to establish if this was the real reason for dismissal. This must be kept in mind by the Tribunal when considering all of the evidence in order to determine the main or principal reason when more than one may present itself. The reason for dismissal in this case was held to be due to the redundancy situation, despite the circumstances suggesting possible capability issues with M and his dismissal apparently following prior replacement of him by a better performing recruit. This may have been due to the Tribunal’s judgement of evidence upon the particular events in this case, with the employer’s recruitment of K initially prompted by M’s stated intention to leave. However, it may also show a narrow interpretation of the reason for dismissal by the Tribunal with focus upon the principal reason being redundancy at the time of M’s dismissal, rather than the background leading up to it as to possible alternatives for capability.                                                                             

The dismissal of M was held to have been procedurally unfair due to a lack of genuine consultation, the Medical Practice having already decided to retain K as Practice Manager. However, compensation was reduced by 100% as it was held to have been inevitable that the two employees would be reduced to one and that the choice would result in M being dismissed and K retained, the trust and confidence in the relationship between the Medical Centre and M having been lost.

Ann Marie Burke
Carillion Advice Services

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