Redundancy: When is a refusal of alternative employment unreasonable?
As part of a redundancy consultation process, an employer must consider whether there is any suitable alternative employment within the company, or an associated company, which it could offer an individual at risk. If an employee unreasonably refuses a suitable offer, they lose their right to receive a statutory redundancy payment. However, what constitutes suitable alternative employment or an unreasonable refusal is not always straightforward. In the recent case of Readman v Devon Primary Care Trust, the Employment Appeal Tribunal had to consider these two issues.
Ms Readman had worked for the Trust since 1985 initially in a hospital setting but for the last 20 years, she had worked in the community. Her role as a community matron was placed at risk of redundancy and during consultation she was offered three alternative options to redundancy, one of which was a role as a matron working in a small community hospital. Ms Readman rejected all three options on the basis that the first two were not suitable and the third option was also not suitable as she did not want to return to a hospital setting. She rejected the roles and claimed her redundancy payment. Her employers refused claiming she had been offered suitable alternative employment but had unreasonably refused.
The employment tribunal concluded that the hospital matron role was a suitable alternative position which Ms Readman had unreasonably refused. Ms Readman appealed to the Employment Appeal Tribunal which overturned the employment tribunal’s decision. The Employment Appeal Tribunal concluded that whether a refusal of a role was unreasonable had to be considered from the perspective of the employee and not the employer. In this case, Ms Readman gave evidence that she did not wish to work in a hospital setting again as she had not worked in this environment for a long time and she did not see her career progressing along that path. This, the Employment Appeal Tribunal held, was a justifiable reason for turning down the Trust’s offer. She was, accordingly, entitled to receive a statutory redundancy payment.
When considering the issue of a suitable role and an unreasonable refusal, employment tribunals will have to consider two different tests. Whether the job is a suitable alternative is assessed from an objective perspective (similarity of pay, location, responsibility etc). However, whether a refusal of that job is reasonable is assessed from the subjective perspective of the individual employee and their own personal circumstances e.g. where they see their career etc.
This case may seem harsh on the employers who had at least been able to offer the employee some options other than redundancy. In some cases, there is simply nothing an employer can offer. However, with larger employers with more resources at their disposal, a greater emphasis will be placed on finding alternative roles. It is also interesting whether Ms Readman had ever told the employers of her desire to stay within the community setting.
Employers should continue to look for suitable roles within the business and document the steps taken to discharge this duty. However, employers should be wary of just offering an intranet web-page or a whole list of roles as this may not discharge the duty of looking for a suitable role for an individual at risk. Whilst it is advisable to keep those at risk informed of possible roles within the business, it is also a good idea to send something individualised with roles more suited to a person’s grade or other role specifications. The more tailored a role is to the individual in terms of grade or future career progression, the greater the chance of arguing the employee has unreasonably refused a suitable role.
Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.