An employer is entitled to withhold a redundancy payment where:
1. it offers the employee suitable alternative employment; and
2. the employee unreasonably refuses to take up the alternative position.
The question as to whether a position amounts to suitable alternative employment will ultimately be judged objectively by an employment tribunal. However, when considering whether a refusal to take up an alternative position is reasonable or not, a tribunal will consider whether the employee in question had a sound and justifiable reason for turning down the offer.
The employee in this case was at risk of redundancy due to a planned re-organisation of leadership roles within the organisation. She was offered three alternative posts but turned them all down.
Two of the positions would have resulted in a loss of status. The third position, however, involved no loss of status or financial loss (accordingly it amounted to suitable alternative employment). The employee, however, turned down that position on the basis that it was based in a hospital and, having worked in community nursing for many years, she had no desire to return to a hospital setting.
Her employer took the view that her refusal to accept the position was unreasonable and did not make a redundancy payment to her.
An earlier Employment Tribunal had found that the position amounted to suitable alternative employment and agreed that the employer was entitled not to make her a redundancy payment on the grounds that her refusal had been unreasonable. In reaching its decision the tribunal said that a reasonable employee would have accepted the offer.
The Employment Appeal Tribunal, in overturning that decision, said that when considering whether a refusal of suitable alternative employment is unreasonable, it is necessary to consider whether the employee in question acted reasonably in refusing the offer. This, it said, involves a consideration of whether the reason given by the individual amounts to a sound and justifiable reason for turning down the offer.
It said that the employee’s desire not to work in a hospital setting provided her with a sound and justifiable reason for turning the offer down and it was satisfied that this had been the main reason for her refusal. Accordingly, it said, that she was entitled to receive a redundancy payment.