Redundancy series: Questions on suitable alternative roles in redundancy process

In this insight, we answer commonly asked questions about suitable alternative roles in a redundancy situation.

What makes an alternative role ‘suitable alternative employment’?

This is an objective test and is based on the employee’s skills, aptitudes, experience and whether they meet the need of the job; and the terms of the alternative job (e.g. status, place of work, tasks to be performed, pay, hours and responsibility) and how they compare with the employee’s previous role.

Some general rules to remember:

• A drop in status is likely to be mean an alternative is unsuitable.
• If pay is preserved at the same level this will not, on its own, necessarily make the new role suitable.
• A significant drop in salary will make the new role unsuitable.
• The pay and benefits package as a whole needs to be considered in determining suitability.

Usual practice across group companies is to share vacancies among the group, however, this is not a requirement in all cases. Where vacancies are regularly shared across the group this will be expected in a redundancy situation and the employer will at least be expected to draw the employee’s attention to any group vacancies and/ or where to find them. This is the case even if the vacancies are at a lower level than them – the vacancy may not be suitable, but the employee may be prepared to accept it.

Note that we are talking about vacancies – employers are not obliged to create roles.

What if an employee doesn’t want to accept a ‘suitable alternative role’?

To assess whether the employee’s refusal is reasonable you will have to consider whether the employee in front of you behaved reasonably given the circumstances in which the offer was made, the duration of the alternative employment and the employee’s personal circumstances. The test is subjective as opposed to objective: did this employee have sound and justifiable reasons for rejecting the offer based on the facts as known by the employee when making their decision?

How the offer is relayed is also likely to impact reasonableness; it is likely to be reasonable for an employee to refuse a job if they are given insufficient time to consider it or if the employee reasonably doubts the employer’s motives in making the offer. For example, where an offer is made just before the dismissal date and the employee has already accepted another job elsewhere, they are likely to be reasonable in not accepting the employer’s late offer of alternative employment.

In some cases, an employee may be concerned that the employer’s offer of suitable alternative employment might not be genuine, particularly where it has an ulterior motive for keeping them. In a recent case an employee believed that an alternative job had been manufactured to prevent him going to a competitor. He raised this with his employer who failed to deal with it. The employee was held to have behaved reasonably when he left at the end of a trial period.

Case law has also established that if the alternative offered is temporary then the length of the temporary post is important: a post of two months in duration could reasonably be turned down whereas if a role is for between 12 and 18 months it would likely be unreasonable for an employee to reject it.

An employee’s personal situation is often the main issue in determining whether the employee unreasonably turned down a suitable alternative role. One factor which features heavily in case law is the individual’s family situation and any additional commuting time, childcaring responsibilities, children established in schools, etc.

The employee’s reasonableness in rejecting a suitable alternative role will determine whether the employee is entitled to a statutory redundancy payment.