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Alternative work
[ch 11: pages 354-355]An employer should give employees at risk of redundancy the chance to apply for suitable alternative work if available including, where appropriate, vacancies in other companies in the same group. The obligation is stricter in the case of employees on maternity, adoption or additional paternity leave (or for babies born or matched for adoption on or after 5 April 2015, shared parental leave). For these employees, employers must offer a suitable available vacancy (see page 356).
Failing to consider suitable alternative employment can make redundancy unfair. An employer should be looking for alternative employment opportunities from the first moment they realise the role is at risk. The larger and better resourced the employer, the more that will be expected (Richardson v HSBC Bank plc [2010] UKEAT/0499/10).
The legal responsibility for finding alternative roles rests firmly with the employer, as they have all the relevant knowledge. However, the more proactive the employee, the more sympathetic a tribunal is likely to be. Compensation can be significantly reduced where an employer persuades the tribunal that the employee would not have accepted a particular alternative job even if it had been offered (see page 315: Compensation).
The employer should keep looking for suitable alternative vacancies right up to the dismissal date (King v Royal Bank of Canada Europe Limited [2011] UKEAT/0333/10).
Offers of suitable alternative employment are covered by section 141 of the ERA 96. This states that any offer must be made before the old contract ends and must begin within four weeks of the date of the end of the original employment.
An employee who unreasonably refuses a suitable role that is the same as or not substantially different from their previous work can lose their redundancy pay.
The issue of whether work is suitable is considered separately from the question whether an employee is reasonable in refusing it, although there may be some overlap. The more suitable the offer, the easier it is likely to be for an employer to show that a refusal to accept it is unreasonable.
Whether work is suitable depends on objective, job-related factors such as the terms and conditions and the skills required, taking into account individual skills and experience. Work is normally considered unsuitable if it involves material changes in pay, skills and experience or status.
The reasonableness of a refusal to take up an offer often depends on subjective factors personal to the employee. The test here is whether the employee had sound and justifiable reasons for refusing the offer, taking into account their personal circumstances such as domestic arrangements, health and housing. For example:
Mr Ruse was made redundant and offered suitable alternative work at the same grade but in a post that he felt to have lower status. His rejection of the offer was reasonable and he was entitled to redundancy pay.
Cambridge Co-op v Ruse [1993] IRLR 156
www.bailii.org/uk/cases/UKEAT/1992/266_90_1505.html
Mr Denton was offered an alternative job that involved working in a dusty environment. Even though the work was suitable, he was very concerned about the potential health hazards of airborne dust since close relatives had died from respiratory infections. The tribunal said that even though his fears were unfounded, they were genuine and this made his refusal reasonable.
Denton v Neepsend [1976] IRLR 164
Mrs Readman was made redundant from her role as a community matron and offered alternative work on the same grade as a matron in a twelve-bed hospital. The only difference between the two jobs was the work setting. She turned it down because she felt her career path and qualifications were in community nursing. “She had not worked in a hospital setting since 1985 and had no desire to do so”. The Court of Appeal concluded that although the role was “suitable”, she was not unreasonable in rejecting it for this reason. She was entitled to a redundancy payment.
Readman v Devon Primary Care Trust [2013] EWCA Civ 1110
www.bailii.org/ew/cases/EWCA/Civ/2013/1110.html
During the NHS Agenda for Change reorganisation, Ms Bird was made redundant from a physiotherapy role at a PCT involving a mix of 80% managerial and 20% clinical responsibilities. She rejected two posts that had 15%-20% managerial content. The Trust refused to pay her £70,000 redundancy payment, arguing that she had unreasonably refused suitable alternative employment. Backed by her union, UNISON, she brought a tribunal claim. The EAT upheld her claim, finding that her refusal of an alternative role with a different skills mix was reasonable.
Bird v Stoke on Trent PCT [2011] UKEAT/0074/11
The manner in which an offer is made can be relevant to the reasonableness of any refusal, especially where this has damaged the parties’ relationship (Commission for Healthcare Audit & Inspection v Ward UKEAT/0579/07/JOJ).
The employee should be consulted about alternative work and given adequate information to be able to decide whether it is suitable. Failure to do this is likely to make a refusal reasonable (Fisher v Hoopoe Finance UKEAT/0043/05).
Where a member opts to accept a new job at a lower salary to avoid redundancy, unions may be able to negotiate a period of pay protection preserving the old terms and conditions, known as red-circling.
An offer by the employer of self-employed or freelance status is not an offer of suitable alternative employment (F&G Cleaners Limited v Saddington [2012] UKEAT/140/11/JQT).