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Legislation update: Redundant employee refuses alternative job

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Legislation updateRichard White examines a recent case involving an employee who was made redundant, and refused an offer of a suitable alternative job; yet the tribunal considered that the employee acted reasonably in doing so.




In a redundancy situation, an employee who unreasonably refuses an offer of suitable alternative employment made before termination, or within four weeks thereafter, will lose their entitlement to a redundancy payment. A recent case has considered when it may be reasonable for an employee to refuse such an offer.

Commission for Healthcare Audit and Inspection v Ward

Ms Ward commenced employment with the commmision on 12 February 2001. In April 2005 she was appointed head of resourcing, scheduling and new business in the operations group at a salary of just under £80,000 per annum.

“Ms Ward became disillusioned with the handling of the redundancy process, partly because of the commission’s initial lack of clarity.”

When a restructuring exercise commenced in May 2006, Ms Ward’s role was identified for deletion. The commission’s redundancy and redeployment policy was engaged. Ms Ward had been involved in and had survived an earlier restructuring exercise which ended in November 2004.

The commisson identified two potential roles for Ms Ward: head of planning, business management and performance (the new post), and head of independent healthcare. Ms Ward was offered the new post, but she did not consider it to be suitable for her (having drafted the job description for the post) on four grounds: (1) status – her team would be reduced from 28 to seven staff members and her budget would be cut from £2.9 million to £1.5 million; (2) job content and experience – the new post she perceived to be more ‘inward looking’ than her old post; (3) future job prospects, and (4) job security.

Ms Ward became disillusioned with the handling of the redundancy process, partly because of the commission’s initial lack of clarity over, and refusal to discuss the details of, the alternative job on offer. She also perceived the alternative job as involving a significant loss of status. Accordingly, she raised a formal grievance on 1 September 2006 concerning the redeployment process.

A total of three offers were made to Ms Ward relating to the new post. The first two offers were not sufficiently clear to enable Ms Ward to decide whether the offer was suitable or not. It was not until January 2007 that the third offer was made with the necessary clarification that had been missing from the previous two offers. Ms Ward refused the offer of the alternative job and brought a claim in the tribunal for a redundancy payment which the commission objected to paying, arguing that she had unreasonably refused the suitable alternative job offer.

The decision

The tribunal found that the job did not involve any loss of status and was on balance suitable, but that it was reasonable for Ms Ward to refuse it, based on her perceptions. The tribunal therefore decided that she was entitled to her redundancy payment.

“This case highlights the fact that an employer’s communication and general handling of a redundancy situation is a key issue.”

The commission appealed to the Employment Appeals Tribunal (EAT). The EAT held that it was permissible for a tribunal to find that a job was suitable, but that in the circumstances the employee perceived it (not unreasonably) as unsuitable. The fact that, objectively speaking, the job was only ‘marginally’ suitable rather than ‘plainly’ suitable was a relevant consideration. Hence it was reasonable for Ms Ward to have refused the offer of an alternative job and she was entitled to her redundancy pay.

Comment

This case highlights the fact that an employer’s communication and general handling of a redundancy situation is a key issue. Failure to handle the process properly and communicate adequately with the employee will inevitably affect the employee’s perception of any job offer.

Wherever possible, employers should provide adequate information to employees about alternative jobs in order that they can make a well-informed decision as to whether or not to accept or refuse the offer.

An employer who offers a suitable alternative job to an employee may find that they are not absolved from having to make a redundancy payment. An employee’s refusal of the alternative job may be reasonable, based on their perception of the role arising from the employer dragging out the redundancy process and not providing adequate information to the employee. An otherwise unreasonable refusal by the employee may be turned into a reasonable one, by reason of the employer’s default.


For further advice on this topic, please contact Richard White, specialist employment solicitor at Withy King, on 01225 352 921 or email [email protected]

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