Ms Fauchon was employed to provide largely book-keeping services by her employer Packman Lucas Associates. There was a downturn in business at Packman Lucas and, at a similar time, the organisation introduced an accountancy software package known as the Sage system, which in itself reduced the number of hours for which it needed book-keeping services. Packman Lucas tried to persuade Ms Fauchon to reduce her hours but when she refused, she was dismissed. The question was whether Ms Fauchon had been made redundant.
An earlier EAT case decided that there was no redundancy situation when a hotel which was suffering from financial difficulties decided to close during January and February of each year. In that case the same number of employees were required from March to December, but no staff were required during the months when the hotel would be closed. As there was no change in the number of employees needed overall, the EAT held there was no redundancy situation.
In this case, the EAT, going against that earlier authority, held that Ms Fauchon had been dismissed by reason of redundancy. This was despite the fact that there was still a role at Packman Lucas for a part-time book-keeper and therefore there was no reduction in overall headcount.
The EAT said that:
“…there may be situations…. in which the needs of the employer’s business are for fewer employees to do the same amount of work. If employees are dismissed for that reason, they are dismissed by reason of redundancy. But if the amount of work available for the same number of employees is reduced, then, again,… a dismissal of an employee caused wholly or mainly for that reason is also a redundancy. 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.”
The EAT was also satisfied that the situation could also be explained by the fact that the FTE (full-time equivalent workforce) is cut. This was the case even though the number of employees actually working remains the same.