Ps had contracts with D to work in a slaughterhouse but the contracts contained a flexibility clause, saying Ps could be required to work in other parts of the plant. The market declined and D made Ps (35% of slaughterhouse workers) redundant. Ps sued for unfair dismissal, claiming they were not redundant because D still required Ps to work under same conditions, albeit in different departments. HL held that Ps were made redundant, and it adopted a test of factual causation for redundancy: (1) Was there a reduction in the workforce as a result of a business reorganisation/fall in demand etc; and (2) Was the dismissal under consideration wholly or mainly attributable to that reduction.
Lord Irvine LC: He rejects both the contract test (‘did the employer need less employees of the kind specified in P’s contract) and the function test (did D need fewer employees for the kind of work P was doing) for redundancy. The test is a simple one of factual causation (see above), as seen from the work ‘attributable’. The dismissal of an employee who could perfectly well have been redeployed would count as redundancy under the contract and function tests, but requires explanation under the factual causation test, which is more realistic. This prevents a flexibility clause from precluding the outcome of redundancy (as they can’t argue that just because the employer still needs people working under the same contract/function they are not redundant). This test is more realistic, taking into account market conditions.