Dealing with redundancies can be unhappy and difficult for both employers and employees. On top of emotional aspects there may be large redundancy payments to handle and, if the employer gets things wrong, even more compensation for an unfair dismissal claim.
There are four main hurdles for an employer to consider:
- consulting with the employees potentially affected
- identifying the correct pool from which to select employees for redundancy
- choosing and applying objective selection criteria to those in the pool
- considering if there is suitable alternative employment (“s.a.e”) for an otherwise redundant employee.
These notes focus on the last of these and the issues of suiatblity and employee refusal. Failure to consider alternative employment may make a dismissal unfair. On the other hand an employee’s unreasonable refusal of s.a.e may relieve an employer from having to make a redundancy payment. The Employment Appeal Tribunal (EAT) recently looked at these issues in the case of Bird v Stoke-on-Trent Primary Care Trust which provides a platform from which to review the practicalities of this area of redundancy practice and law.
Over-riding duty to consider and offer any vacancies
Once a tribunal has concluded that there has been a genuine redundancy, as defined by statute, it has to decide if it had been fair to dismiss for that reason. The employer must be seen to have acted reasonably in dismissing the employee in all the circumstances. The employer must also be able to show that he has offered alternative employment. This does not have to be suitable but the employee must have been given the chance to consider if any vacancy might be acceptable rather than going on the dole. Wholly unsuitable roles need not be mentioned, particularly if they could be taken as insulting. Refusal of unsuitable roles has no impact: it is just that the employer must have considered and made them available for consideration by the employee.
Suitable alternative employment
The legal implications of suitable alternative employment (as distinct from other vacancies that are not suitable but merely available) are important. If offered but unreasonably refused there is no need to make a redundancy payment
However, to establish that s.a.e is truly suitable the employment offered must be objectively suitable for the employee.
Objectively suitable
Suitability requires an objective assessment of whether the job offered is appropriate for the employee concerned.
This is not always easy but an employer should be looking and asking questions about a number of issues, such as:
- job content: is it close to the old job; does it use same or similar skills;
- terms and conditions: aside from the categories in this list the terms should be largely the same;
- pay: how great is any drop in pay – anything significant may be too much;
- status: again , any significant diminution of status is likely to make role unsuitable;
- working hours: changes in times of day of work may render job unsuitable as may length of hours;
- change of workplace: in the absence of a contractual mobility or the nature of work and industry practice making location changes acceptable any significant extra time or cost involved will likely render an offer unsuitable;
- job prospects: temporary nature of new job or lack of promotion prospects which might have been available in old job will be factors against suitability
- totality: changes in these categories or other changes may all individually be insignificant but taken as a whole may add up to becoming significant in aggregate
Unreasonable refusal
Whether an employee's refusal of a suitable job is reasonable is looked at with a subjective test and calls for an analysis of the particular employee’s reasons for rejecting it. This can cover many factors, including the employee's
personal circumstances such as their personal and family commitments. There is a fine line between the objective test and the employee’ s personal perception which it is not easy to synthesis. In the Bird case it was stated
“.. an employee’s refusal of an otherwise suitable offer can still be said to be reasonable when he personally thinks that the post he is being offered involves a loss of status, even if that view might be groundless in the eyes of others, provided that it is not groundless from his point of view. An illustration of that was Denton v Neepsend Ltd [1976] IRLR 164. A cold saw operator was offered alternative work on an abrasive cutting machine. The use of such a machine could generate a certain amount of dust, fumes and vapours, as well as some metal fragments, and the employee had something of an obsession about the possible hazards of exposure to them. His father-in-law had died as a result of chest trouble, and his own father had suffered from pneumoconiosis. Although the tribunal found that the new job was suitable for the employee, and although his fears about the danger of exposure to these hazards may have been groundless since his employers had complied with the relevant safety legislation, his refusal to work on the new machine was held at [12] to be reasonable since he “was being asked by his employers to undertake a completely different working environment in the sense that he might be exposed to fumes, vapours, dust and metal fragments to which he would not be exposed while working the cold saw …”
This passage helps to give a flavour of how a refusal should be viewed for its reasonableness. In the Bird case, it was emphasized by the EAT that in considering the reasonableness of the reasons for an employee’s refusal, Employment Tribunals (and, it follows, employers) must look at whether someone in the actual employee’s circumstances (i.e. not a hypothetical reasonable employee) could reasonably have taken the view of the alternative post which the employee did.
Proving suitability and unreasonableness
It falls on the employer to show both that the alternative employment offered was suitable and that the employee's refusal was unreasonable. Careful recording of assessments of suitability and reasons given for refusal should be kept by an employer.
