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When an employee’s role is declared redundant, it does not automatically follow that the employment relationship will be terminated...

There is a duty on every employer to consider whether it can offer a redundant employee alternative employment within their organisation (or perhaps even within another organisation which is part of the same group).

Where an employee is offered alternative employment but refuses it, the employee runs the risk of forfeiting their statutory redundancy payment. However, the employer can only withhold the redundancy payment if the position offered constitutes ‘suitable alternative employment’ and the employee unreasonably refuses the offer.

In a recent case, the Employment Appeal Tribunal (EAT) has considered just what exactly constitutes ‘unreasonable’ refusal of suitable alternative employment. The case involved a nurse who had held a community nursing position for 23 years and, when her job was declared redundant, refused an alternative position on the same grade but based at a hospital. The nurse’s primary reason for refusing the alternative job was found to be that having been a community nurse for so long, she simply did not wish to work in a hospital setting.

There was little doubt that the alternative job offered was ‘suitable’ in this case. The nurse had nearly all of the necessary skills to carry out the role and could easily have undertaken the modest amount of retraining required to cope with the different administrative tasks associated with working in a hospital.

Generally speaking, the offer of an alternative role will usually be considered suitable if it corresponds to the employee’s skill set and involves the same duties, hours, status, pay, etc.

The Employment Tribunal which originally heard the case found that the offer had been unreasonably refused in this case. However, the EAT overturned this decision, emphasising that the nurse had a ‘sound and justifiable’ reason for refusing the offer.

This case serves as a useful reminder to employers that just because the alternative employment they offer is suitable, that does not necessarily mean that the employee will be unreasonable in refusing it. Also, it seems clear that the reasonableness of the employee’s refusal is to be assessed subjectively, taking into account the employee’s own circumstances and perceptions.