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Alternative work
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 within the same group. The obligation is stricter in the case of employees on maternity, adoption or additional paternity leave , where employers must offer any suitable available vacancy.
A failure to consider offering suitable alternative employment may make redundancy unfair. Several recent tribunal decisions have shown that tribunals are often prepared to take a quite robust approach to enforcing the employer’s duty to look for suitable alternative work. An employer should not confine the period of any search to any formal consultation period. Rather, the employer should be looking for alternative employment opportunities from the moment the employer realises that the role is at risk, whether or not that risk has been communicated to the employee. The larger and better resourced the employer, the more that will be expected of it (Richardson v HSBC Bank plc UKEAT/0499/10).
Responsibility for looking for alternative employment rests firmly with the employer, as it holds all the knowledge. However, in practice, the more the employee actively engages with the process of seeking alternative employment, the more sympathetic a tribunal is likely to be.
The employer’s obligation to keep looking for suitable alternative vacancies lasts right up to the dismissal date. If an employer decides to cut short the period of consultation or notice, a tribunal will want to know what employment possibilities might have come up during the whole period when the employer should have consulted and given notice, if it had acted fairly. In King v Royal Bank of Canada Europe Limited ([2011] UKEAT/0333/10), the EAT placed the burden squarely on the employer to produce evidence of all the vacancies during this period, and to explain why the dismissed employee was not suitable for any of them, given her qualifications.
In both the Richardson and the King cases the employer’s practice of addressing the issue of “alternative employment” by giving the redundant employee a single token “snapshot” list of vacancies was criticised as wholly inadequate.
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.
The new role must be the same as, or not substantially different from, the previous work and must be suitable for the employee. The employee is not obliged to accept the alternative offered, but unreasonable refusal can lead to the loss of redundancy pay.
The issue of whether work is suitable is considered separately from the question whether an employee is acting reasonably in refusing it, although there may be some overlap. The more suitable the offer, the easier it may 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. By contrast, the reasonableness of any refusal to take up the offer depends on subjective factors personal to the employee. The test here is: Did this particular employee have “sound and justifiable reasons” for refusing the offer, taking into account their personal circumstances, and their knowledge at the time?
Work is normally considered unsuitable if it involves material changes in pay, skills and experience or status, while the reasonableness of the refusal may relate to issues like domestic arrangements, health and housing:
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
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. 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 work setting was the only difference between the two jobs. The EAT concluded that while 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 [2011] UKEAT/0116/11/ZT
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 circumstances in which an offer is made can be relevant to the reasonableness of any refusal, especially where these have led to a deterioration in the parties’ relationship (Commission for Healthcare Audit & Inspection v Ward UKEAT/0579/07/JOJ).
An offer 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)).