Under that subsection once the employer has shown that the reason for dismissal was redundancy the determination of the question whether the dismissal is fair or unfair is determined by the Tribunal and takes into account whether in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee in accordance with equity and the substantial merits of the case.
Following the business reorganisation in March 2005 L claimed it genuinely needed to make 3 members of staff redundant. The employer merely has to show that there is a good business reason for the reorganisation and that it will result in a strengthening of the business: Hollister v National Farmers' Union . Although this case falls under the 'other substantial reason' head the fact that the National Farmers' Union (NFU) reorganised its insurance business to benefit the running of the business was held to be a 'good business reason' to dismiss an employee who would not accept the variation in his contract terms.
"it is possible for an employer to use such a situation as a pretext for getting rid of an employee he wishes to dismiss. It is for the tribunal in each case to see whether on all the evidence, the employer has shown them what was the reason for dismissal."
L has admitted that M was dismissed due to her sickness record, and not simply because of the need to reorganise the business. Where an employee has a long-term health issue which effectively frustrates the contract, it is possible to legitimately dismiss him/her provided there has been a fair review of attendance record and appropriate warnings have been given: International Sports Co Ltd v Thomson . Whether the dismissal is 'fair' turns on the interpretation of s98(4) of the ERA 1996. In Iceland Frozen Foods v Jones  Browne-Wilkinson J said:
"there is a band of reasonable responses to the employee's conduct within which one employer might reasonably take one view.If the dismissal falls within the band the dismissal is fair."
On the facts L has made no attempt to address M's sick