A recent Employment Appeal Tribunal (EAT) case has considered the correct test to be applied where, in a redundancy situation, an employee refuses to accept an offer of suitable alternative employment.
Readman v Devon Primary Care Trust
Mrs Readman had been a nurse since 1976, working in a hospital setting until 1985 and then in Community Nursing. In November 2007, she was notified that she was at risk of redundancy. As part of a lengthy redundancy process Mrs Readman was offered three alternative roles. Two of these were at a lower grade and considered unsuitable by the Employment Tribunal (although Mrs Readman undertook a four-week statutory trial period in respect of one of them). The third was a similar role but based in a hospital setting. It offered no loss of salary or status. Mrs Readman refused to accept this role, stating by letter in August 2008 that she had no desire to return to working in a hospital setting as her career path and qualifications were in Community Nursing. Relying upon s141 of the Employment Rights Act 1996, the Trust did not make a redundancy payment, owing to her refusal to accept the hospital role.
The Employment Tribunal held that the role was a suitable alternative and that a reasonable employee would have accepted it. In doing so, the Employment Tribunal upheld the Trust’s decision not to make a redundancy payment. The Tribunal also found that other factors were at play; namely that Mrs Readman wanted to take the money and emigrate to Canada (which she subsequently did).
In overturning the decision and awarding Mrs Readman a statutory redundancy payment, the EAT held that the Tribunal had not applied the correct test. In assessing a refusal to accept suitable alternative employment, the test is whether the employee in question acted reasonably and not what a hypothetical reasonable employee would do. The EAT held that the core reason for Mrs Readman’s refusal was the proposed change to a hospital setting and that this, in the circumstances, was reasonable. The ‘emigration’ issue was ancillary.
Comment
As part of any redundancy exercise, an employer is under a duty to search for suitable alternative vacancies. A failure to do so usually results in a finding of unfair dismissal.
An employee can be denied a statutory redundancy payment for unreasonably rejecting such an offer. The above case makes it clear that reasonableness is assessed subjectively looking at the employee’s particular circumstances and in particular whether they had a sound and justifiable reason for turning down the offer.
STOP PRESS – New unfair dismissal qualifying period
Whilst it has not been announced officially, the Department for Business, Innovation and Skills has confirmed to legal sources that the increase in the qualifying period for claiming unfair dismissal to two years will only apply to employees who commence employment on or after 6 April 2012. As such, current employees will not be affected by the change.
In order to ‘benefit’ from the new longer qualifying period, employers should perhaps bear this in mind when recruiting over the next couple of months by deferring start dates until after 6 April.
If this alert has been forwarded to you and you would like to sign up to receive regular alerts, you can do so using our online form.
If you have any comments or queries please do not hesitate to contact Joanne Holborn, Adrian Maitra, or Tom Scaife on 01228 552600. Alternatively, email one of the team at HR@baineswilson.co.uk.
20 January 2012
