ExpertEasy2 marksMultiple Choice
ACCA · Question 09 · Employment law
'ThreadWorks Ltd', a textile manufacturer, decides to fully automate its weaving process. As a result, the company no longer requires manual loom operators and dismisses ten employees who have worked there for five years.
Under the Employment Rights Act 1996, is this a valid reason for redundancy?
'ThreadWorks Ltd', a textile manufacturer, decides to fully automate its weaving process. As a result, the company no longer requires manual loom operators and dismisses ten employees who have worked there for five years.
Under the Employment Rights Act 1996, is this a valid reason for redundancy?
Answer options:
A.
No, because the company is still operating and has not closed down its business.
B.
No, because automation is considered an unfair business practice under employment law.
C.
Yes, because the requirement for employees to carry out work of a particular kind has ceased or diminished.
D.
Yes, but only if the employer is insolvent.
How to approach this question
Recall the statutory definition of redundancy. It covers business closure, workplace closure, and a reduced need for employees to do a specific type of work.
Full Answer
C.Yes, because the requirement for employees to carry out work of a particular kind has ceased or diminished.✓ Correct
Under s.139 of the Employment Rights Act 1996, redundancy occurs in three main situations: closure of the business, closure of the employee's workplace, or where the requirement for employees to carry out work of a particular kind has ceased or diminished. Automation replacing manual labor fits the third category perfectly.
Common mistakes
Believing that a company must be failing or closing down entirely to make redundancies.
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