Redundancy: Removal of overnight parking facility did not trigger redundancy
Published 11 February 2015
The claimants were employed as delivery drivers using HGVs by EXOL Lubricants Limited (EXOL). They lived in Manchester, but the depot they had to attend to load up and receive their instructions was in Wednesbury. Their contracts of employment stipulated that their place of work was Wednesbury. In order to reduce the claimants' cost of commuting each day EXOL agreed to make available secure parking for their HGVs in Stockport near their homes. They would drive from their homes to Wednesbury each day and the journey to and from Stockport was treated as part of their working day for which they were paid. It was accepted that this arrangement had become a term of their contracts of employment. All the other HGVs were parked overnight at the depot in Wednesbury. A time came when EXOL felt it could no longer afford to pay for the secure parking in Stockport and gave notice to the claimants that it was terminating the arrangement. No alternative terms of employment could be agreed, and EXOL dismissed the claimants, initially for some other substantial reason ("SOSR"). In the end, EXOL claimed that a redundancy situation had arisen, on the basis that it had ceased carrying on business in Stockport.
The employment tribunal rejected EXOL's case finding the dismissals to be unfair. This was because the claimants’ place of work was not in Stockport but in Wednesbury which was where they had to take their lorries every day to be loaded, where their instructions came from and to where they reported. The Employment Appeal Tribunal upheld that decision, finding that there was no redundancy situation, since there was no diminution in the employer's requirements for delivery drivers, and the drivers' place of work had always been the Wednesbury depot, both contractually and in fact. The Stockport parking facility was not and never had been their place of work and so there had been no workplace closure.
What this means for employers:
EXOL might have had a better chance of succeeding had it relied on "some other substantial reason", as it originally proposed, or subsequently as an alternative. This would be the more common route where there is a refusal to accept changes to terms and conditions, and has the added advantage of not requiring the employer to make a statutory redundancy payment.
EXOL Lubricants Ltd v Birch and another UKEAT/0219/14