Available alternative work when making redundancies

Andrew Masters

Partner & Head of Employment

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July 15, 2020

Categories Employment Law Updates

Part seven of ‘Seven things to think about when making redundancies’ series

7. Alternative work

Quite apart from the specific obligation to those on maternity, adoption or shared parental leave, a reasonable employer carrying out a redundancy exercise will consider whether there is any alternative work available for affected employees elsewhere in the organisation.

Employers sometimes make the mistake of not discussing some alternative roles with employees because they believe they will not be interested. They may be lower paid or less senior roles than the one the employee currently has. On the whole, however, it is better to present all the possible alternatives to the employee and have a genuine discussion about which of them might be appropriate.

An employee who unreasonably refuses an offer of suitable alternative work is not entitled to a redundancy payment. But, employers should not be too quick to assume that this applies when an employee does not accept the alternative work that they are offered.

First of all the offer itself must be ‘suitable’. That involves looking at the terms and conditions of the new role and comparing them to those currently enjoyed by the employee. If the new role involves a significant pay cut, more unsociable hours or a need to relocate then it is unlikely to be regarded as a suitable alternative. The same is true if there would be a significant loss of status or seniority.

Even if the role itself is suitable, the employee’s refusal of it may be reasonable. Reasonableness in this context is judged from the employee’s point of view and the subjective reasons for them refusing the role are taken into account. These may include family commitments that prevent them working further away from home or reasons to do with the nature of the work. Provided the employee can explain why the new role was not right for them, a Tribunal is likely to be sympathetic to their claim for a redundancy payment.

If the employee accepts an offer of alternative work, it is often assumed that this acceptance will be subject to a four-week trial period. In fact this is only the case if the employee is given formal notice of dismissal and the alternative work begins after that notice has taken effect. In those circumstances the employee can resign at any time in the first four weeks of the new role and still claim a redundancy payment.

If, however, the employer and employee arrange for the alternative role to begin before the notice period expires or even before formal notice is given, then any trial period is simply a matter to be agreed between them. If the employee is not happy in the new role and resigns then it may be that there is no dismissal at all – much less a dismissal for redundancy – and that there is no redundancy payment owing.

To avoid disputes about an employee’s entitlement, the employer should clearly set out when making the offer of alternative work whether any trial period will apply and what will happen if either party is unhappy with the new role.

For legal advice about making redundancies contact Andrew Masters on 01227 763939 or email asm@furleypage.co.uk