Redundancy/FAQ – what’s the duty to offer ‘suitable alternative employment’?

A principle very well established by case law is that the dismissal of an employee for reason of redundancy may be unfair if the employer fails to give due consideration to an offer of suitable alternative employment if such a vacancy exists. So, what exactly does that involve? It’s a question we are often asked so we’ve added it to our FAQs series of programmes. On the line to help with that, Kate Dodsworth:

Kate Dodsworth: “The duty is to seek out and offer alternative employment. Don't be passive and leave this for the employee to troll through vacancy lists. Approach them about it and document the steps that you've taken to offer alternative employment. An important point with this is the obligation is to look across the group of companies, not just one part of the business, not just the employing entity. Having said that, the obligation is not to create vacancies that don't already exist, rather it’s to take a broad approach, but make no assumptions. So do not assume that a role that you think oh, this is a suitable alternative, oh, they won't accept that for X, Y Z, reasons, put it to them. If an alternative role exists but on different - and when I say different, it might include better terms - then there is an entitlement for the employee to have a four-week trial period. If an employee unreasonably turns down an offer of suitable alternative employment, that has an impact on their entitlement to a redundancy payment. You might think well, what is a suitable alternative role? Well, when considering whether a role is suitable, you would be looking at factors such as the hours of the new role, the place of work, is there a mobility clause in the employment contract allowing the employer to move the employee, as such, to a different site, perhaps, a different office, the pay of the new role, the status, the prospects of the role, they're all relevant when you're considering whether a role is suitable or not. There is an additional quite important point that employers must remember when in a redundancy situation and that is those that have, what we refer to as, queue jumping rights. So, if an employee on adoption, or maternity or shared parental leave is given scores that put them at risk of redundancy the employer then must offer that individual a suitable alternative vacancy if one is available and that does include, again, a vacancy with an associated employer and at that point they have queue jumping rights. So, they have priority over other employees who are also at risk of redundancy, even if they are not the best candidate, and that's a really important point that employers often miss. The employee is entitled to be offered it, not just entitled to apply for it, entitled to be offered a suitable available vacancy with her employer and this then gives the woman priority over other employees, as I said, even if the other employees might be better qualified for the job. The terms and conditions of the new role, including the capacity and the place in which she is to be employed, must not be substantially less favourable, however. If you had a role, but you didn't view it as a suitable alternative vacancy, you should still put it to the employee on maternity leave, bring it to their attention, but point out that you don't regard it as suitable, as such, and so queue-jumping rights wouldn't apply in the same way. It is worth flagging one final point that this proposed legislation is going to be widened. So, the intention is that the new regulations will apply through the period from when an employee tells an employer that they are pregnant up until 18 months after the birth, so a longer period of time.”

We have added this programme to our FAQs series of programmes. To find them just type ‘FAQ/redundancy’ in the search engine of the Out-Law website.