When can an employee refuse alternative employment in a redundancy process?

When going through a redundancy process, employers have a duty to consider any alternative positions which may be suitable for employees who are at risk of redundancy. An employer who fails in this duty risks a tribunal later ruling that the redundancy was unfair.

Any alternative positions offered must be ‘suitable.’ This involves an objective assessment of the terms and conditions of the new position compared to the old, including the following:  

• salary;
• benefits;
• status in the business;
• duties and responsibilities;
• hours of work;
• location.

It also involves a subjective assessment of whether the job in question is suitable for that particular employee, taking account their unique skills, experience, and needs.

When suitable alternative employment may be refused

Where an employer has offered suitable alternative employment, the employee may nevertheless reasonably refuse it. Whether a refusal is reasonable will depend on the employee’s own circumstances, and their personal reasons for refusing. This point was summarised in the 2023 case of Mid and South Essex NHS Foundation Trust v Stevenson and others: “…the fact that it would have been reasonable for an employee to accept an offer of suitable employment does not necessarily mean that it was unreasonable for the particular employee to refuse it.” Factors which may affect the reasonableness of the offer include the following:

1. Circumstances in which the offer is made. For example, an employee may reasonably refuse a suitable offer of employment where they were not given sufficient time to properly consider it. In previous case law a tribunal has found that it was reasonable for an employee to refuse alternative employment where the offer was made close to the expiry of the notice period and the employee had already secured another job.
2. Duration of the alternative employment. Where an employee was employed on a permanent contract, it may be reasonable for them to refuse an offer of employment on a fixed term basis.
3. Employer’s behaviour. The manner in which the employer conducts its redundancy process may cause the employee to become disillusioned with the employer, making their refusal of an offer of alternative employment reasonable.

Employee’s personal circumstances

An employee’s personal circumstances outside of work will also have a significant impact on whether their refusal was reasonable. Often consideration will be given to the effect that the change will have on the employee’s family and home life. In one case, two employees who worked in the civil engineering industry were offered alternative employment at another location. The circumstances of the job meant that they would only be able to be home one weekend every six weeks. Both employees refused, but only one employee’s refusal was unreasonable. The other employee had a wife and five children who would be affected, so his refusal was reasonable. However, employees who refuse to relocate without good reason or without even considering the position are more likely to have acted unreasonably.

If the suitable alternative employment will require the employee to spend significantly more time travelling to and from work, their refusal is likely to be reasonable. This will depend on the employee’s circumstances. For example, if an employee currently takes a five minute walk to work, they may be able to reasonably refuse a position at a location which is a thirty minute drive away. However, the tribunal will give some consideration to industry standards. An employee is less likely to be able to reasonably refuse alternative employment at a distant location if they work in an industry where travelling to distant sites is the norm (such as in the construction industry). 

Consequences for an employee who unreasonably refuses alternative employment

An employee who unreasonably refuses alternative employment in a redundancy procedure will be treated as dismissed and will not be entitled to a statutory redundancy payment. According to previous case law, the right to receive a redundancy payment will not be restored even if the employee subsequently changes their mind.  

Summary

The key takeaway for employers is that just because an alternative role is suitable, this does not necessarily mean that an employee’s refusal to accept it would be unreasonable. Whether a refusal is unreasonable will be judged according to the employee’s personal circumstances and their perception of the role.

If you have offered alternative employment to an employee at risk of redundancy, make sure the employee fully understands the terms of the role being offered. This can help prevent the employee from forming unreasonable negative perceptions of the role.

If an employee does refuse an offer of alternative employment, meet with them to discuss why. It may be that they have misunderstood a key term of the role, or have unreasonably assumed that it involved a loss in status. Having a discussion with them gives you a change to address any misconceptions, and offer solutions to their concerns.

If the role you are offering is at another location, consider offering to assist with the employee’s relocation or travel expenses.

If you are considering redundancies at your business, we recommend taking legal advice early on to ensure the process is carried out fairly and lawfully. Our advisors would be happy to help. Contact the Employment Team by emailing employment@warnergoodman.co.uk or call 023 8071 7717.