Redundancy – Suitable Alternative Employment

Under the Employment Rights Act 1996, an employee who is dismissed by reason of redundancy will not be entitled to statutory redundancy pay if he or she unreasonably refuses the employer’s offer of suitable alternative employment.

 

In Bird v Stoke-on-Trent Primary Care Trust, Ms Bird, a physiotherapist by profession, had refused the Trust’s offers of alternative employment after her job disappeared following a restructuring exercise. The Trust declined to pay her any redundancy monies on the ground that she had unreasonably refused offers of suitable alternative posts. Even though her old job was essentially a managerial position whereas the posts being offered were essentially clinical in nature, the Employment Tribunal (ET) decided that one of the jobs was suitable and that Ms Bird had unreasonably refused the offer.

 

The Employment Appeal Tribunal overturned the ET’s decision and, in so doing, gave useful guidance on the approach ETs should take when determining the issues of suitability and reasonableness in such circumstances.

 

In deciding whether an offer of a new job is or is not suitable alternative employment, the ET must make an objective assessment of the employment offer. The question is not whether the employment is suitable in relation to that sort of employee, but whether it is suitable in relation to that particular employee. Does the job match the person? Does it suit his or her skills, aptitudes and experience? It is important to consider the job as a whole – not only the tasks to be performed but also the terms of employment, especially remuneration and hours, and the level of responsibility and status involved. Location may also be a factor. The fact that the job being offered is different from the employee’s existing rôle does not necessarily mean that it is unsuitable for that employee, but the more different it is, the more difficult it may be for the employer to show that the job is suitable for the employee.

 

The test of whether or not an employee’s refusal of suitable alternative employment is reasonable is a subjective test. The question is not whether a reasonable employee would have accepted the employer’s offer, but whether that particular employee, taking into account his or her personal circumstances, was being reasonable in refusing the offer. Whether or not an employee had sound and justifiable reasons for refusing the offer has to be judged from the employee’s point of view, on the basis of the facts as they appeared, or ought to have appeared, to that employee at the time the offer was refused.

 

In this case, the ET had failed to take into account relevant features of the evidence when determining that Ms Bird had been offered suitable alternative employment and had substituted its own views on the reasonableness of her action instead of considering whether someone in her particular circumstances could reasonably have taken the view of the alternative post that she did.

 

The case was remitted for rehearing by a fresh ET.

 

In such circumstances, employers are advised to keep a contemporaneous record of reasons for their decisions as this may prove invaluable in helping to justify them in the event of a later claim.

 

If you are contemplating making staff redundant, we can advise you to ensure that the appropriate procedures are followed.

 

 

Partner Note

Bird v Stoke-on-Trent Primary Care Trust UKEAT/0074/11/DM. See http://www.bailii.org/uk/cases/UKEAT/2011/0074_11_2107.html.