Buddy says:  As the employee accepted the alternative position, they will be entitled to a statutory 4 week trial period to ‘test’ the new employment.  If the employee leaves during the trial period or gives notice, they are treated as being dismissed for the purposes of redundancy.  The employee will also be treated as having refused an offer of new employment.  In refusing the new employment, the employee will have therefore lost the right to a redundancy payment, if the alternative position was deemed suitable and the refusal was unreasonable. 

The employee will only be entitled to a redundancy payment in circumstances where the alternative employment was unsuitable, or, if the alternative employment was suitable but the employee’s refusal was reasonable.  However, this is only applicable if notice was given within the trial period.  Following expiry of the 4 week trial period and provided no notice to leave has been given by the employee, they will not be eligible for redundancy payment.     

Employer information:  An offer must have been made before the end of employment under the previous contract.  The offer must be for new employment to start either immediately after the end of employment under the original contact or after an interval of not more than 4 weeks. 

Where there is an acceptance of a trial period under s138 ERA, the employee is treated as not having been dismissed at all through the ending of the previous contract.  Where the employee unreasonably terminates the contract during the trial period, they will not be entitled to a redundancy payment by reason of his dismissal under the original contract (s.141(4) ERA 1996).  If the employee terminates the contract after the trial period, they will not be entitled to a redundancy payment.

Parties may agree to an extension of the 4 week trial period in strictly limited circumstances only.  The extension must be to retrain the employee for employment in the new job.  If trial period is extended beyond 4 weeks other than under the statutory scheme, the employee will only be entitled to a contractual redundancy payment (if any), and entitlement to the statutory redundancy payment will be lost.  

An employee may be entitled to a ‘common law’ trial period.  This arises in constructive dismissal cases, where the employer, faced with a redundancy situation, imposes new terms and conditions in breach of the employment contract.  The common law trial period does not arise if there is an express termination by the employer and where there is an offer of a new contract.

In the recent case of Optical Express Ltd v Williams (EAT), where there is an express offer and acceptance of a s.138 trial period, it is not possible for a common law trial period to run alongside it.