Redundancies and Suitable Alternative Employment

The case of Readman v Devon Primary Care Trust has illustrated that an employee is said to act reasonably in refusing an offer of suitable alternative employment where the Employment Tribunal correctly concludes that a reasonable employee would not have accepted the employer’s offer. Clear? No, let us explain.

The Claimant was a nurse, and was placed at risk of redundancy and subsequently offered three alternative posts by her employer.  Only one of the posts, a Hospital Matron position, was found by the Employment Tribunal to be suitable employment.  However, the Claimant refused this post, as she had worked in community nursing since 1985, and did not want to return to a hospital role.  Consequently, she was denied a redundancy payment by her employer.

The Employment Tribunal also refused to award the Claimant a redundancy payment, as they believed her refusal had been unreasonable.  They asked whether a reasonable employee would have accepted the employer's offer and concluded that they would have done.

The decision was overturned on appeal. The Employment Appeal Tribunal held that the Tribunal had wrongly applied a wholly objective test to the question of reasonableness. The tribunal should ask whether the employee in question acted reasonably in refusing the offer. This will involve consideration of whether the reason, given by the individual, constituted a sound and justifiable reason for turning down the offer and is a subjective test. The Claimant received her redundancy pay.

Employers should carefully assess an employee’s entitlement to redundancy pay when an employee indicates that they will not accept a potentially suitable alternative role.