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Redundancy – Suitable Alternative Employment

So far in our redundancy mini-series, we have looked at some of the key issues that employers need to consider in a redundancy process. This week we look at another, which is fundamental to the fairness of the overall process: considering suitable alternative employment.

As part of ensuring a fair process for redundancy, as well as fair selection and consultation, an employer must search for and (if available) offer suitable alternative employment to employees who are either at risk of redundancy or who have had their redundancy confirmed and are working their notice.  If an employer cannot show that at the time of the dismissal that they have considered this, then the dismissal is likely to be unfair.

This will be the case whether the employer is a small business or part of a larger group, although the extent of the search for alternative roles will depend on the particular circumstances.  Employers do not need to create roles where they do not already exist, however they should be satisfied that they have undertaken a reasonable search for alternative employment and as ever, this should be documented in writing so that there is a paper trail of the process should it be called in to question later. Any search should continue until the date of dismissal i.e. during the employees’ notice period if they are working their notice.

At an early stage of the process, a note should have been made of any vacancies available across the business or group and this should be kept updated throughout.  The importance of dealing with this at an early stage cannot be underestimated, as any vacancies that need to be offered may have an impact on the overall timetable.  Employees should be provided with sufficient information about any vacancies so that they can take a view as to whether the position is suitable for them. Assumptions should not be made as to whether or not the employee would be interested in it.

If there is more than one employee but only one role, employers will need to consider how they will decide who should be matched with the vacancy e.g. by interview or other method of selection.  However, any employees at risk of redundancy who are on maternity leave, adoption leave or shared parental leave have special protection, in that they have an automatic right to be offered any suitable vacancies, ahead of other at risk employees.

If an employee accepts an offer of alternative employment, then their employment will not come to an end. There are complex rules around the timing of an offer of employment, the start of the alternative employment, and whether the role is a “suitable” alternative.

If the alternative employment is different to the employee’s current role then the new employment will be subject to a four-week trial period so that both the employer and employee can decide whether the employment is suitable. If the trial period is successful, then the employment continues and there is no redundancy. If it is not, then the employee’s employment will come to an end by reason of redundancy and the employee will then be entitled to a redundancy payment.  If on the other hand an employer finds a suitable alternative role for the employee within the organisation and the employee unreasonably refuses the offer, then the employee may lose their right to a statutory redundancy payment.  Again, the rules on this are complex and you should take further advice, prior to refusing to pay a redundancy payment.

Having put together a list of alternative vacancies (if any) at a formative stage of the process, this needs to be considered right up until the last day of employment (not just the day that redundancy is confirmed).

It is also something that should to be discussed during individual consultation. Employees at risk should be provided with a list of current vacancies Managers conducting consultation meetings should be prepared to answer any questions on alternative roles within the organisation or group that may arise.

If you require any assistance in relation to the redundancy process or any other employment or HR matters please do not hesitate to contact Joanne Holborn, Tom Scaife or Caroline Rayner on 01228 552600 or 01524 548494.

This alert does not provide a full statement of the law and readers are advised to take legal advice before taking any action based on the information contained herein.

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