When is it reasonable to refuse alternative employment?

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In a redundancy situation, an employer must consider alternative employment for potentially redundant employees to ensure a fair and reasonable redundancy procedure is carried out.

A potentially redundant employee will lose their right to a statutory redundancy payment if they unreasonably refuse an offer of suitable alternative employment and this was the issue considered by the Court of Appeal in Devon Primary Care Trust v Readman.

Background

Mrs Readman had worked at the Trust since 1976 and from 1985 began community nursing. She reached a band 8A professional lead role with responsibility for running community and district nursing in her area. In November 2007, Mrs Readman was notified that she was at risk of redundancy and she was given three options: two new roles at band 7 and another band 8A role at a hospital.

The main difference in the new band 8A role was the replacement of 45% of her duties as a community matron to 45% of her duties as a matron in a small hospital. Mrs Readman (who had aspirations to emigrate to Canada) refused all the roles and in relation to the new band 8A role said that she had not worked in a hospital for 23 years and her career path and qualifications were in community nursing. She subsequently brought proceedings for a statutory redundancy payment.

Employment Tribunal decision

The Employment Tribunal held that the offers of the band 7 roles were not offers of suitable alternative employment but that the offer of the band 8A role was suitable. Mrs Readman had unreasonably refused that offer and was not entitled to a statutory redundancy payment.

The Employment Tribunal found that the reasonableness or otherwise of the refusal depends on factors personal to the employee and is assessed subjectively by taking the employee’s personal circumstances into account at the time of the refusal. It found that Mrs Readman’s desire to emigrate and the possibility of taking advantage of her redundancy rights were factors in her refusal and that she had not attempted to explore what aspects of her current role would be lost and what other duties would be required. Mrs Readman appealed.   

EAT decision

The EAT overturned the decision and ruled that it was reasonable for Mrs Readman to refuse the hospital job and that this was within the "band of reasonable responses" available to her. The core issue that should have been addressed by the Employment Tribunal was that Mrs Readman wanted to avoid hospital working. Moving to Canada and a redundancy payment were not the main reasons for the refusal. The Trust appealed.

Court of Appeal decision

The Court of Appeal found that the Employment Tribunal had stated the correct test for the reasonableness of the refusal but held that the Employment Tribunal’s assessment had been so inadequate as to amount to an error of law. It also found that the Employment Tribunal had not addressed the central point made by Mrs Readman that it was reasonable for her to decline working in a hospital after 30 years working in the community. In addition, the emigration plans "required further analysis".

The Employment Tribunal should have made an objective assessment of whether the alternative employment offered was reasonable and also considered whether there were "sound and justifiable reasons" for turning down the offer.

Further, it was for the Employment Tribunal to determine the reasonableness of the refusal and the EAT should not have substituted its own decision. The Court of Appeal also stated that in this kind of matter, the EAT should not have referred to the band of reasonable responses test. The appropriate test would involve consideration of the circumstances in which the offer is made, the duration of the employment on offer and the employee's personal situation.

The case was remitted back to the Employment Tribunal.

Comment

The Court of Appeal's decision clarifies that the reasonableness of an employee's refusal of suitable alternative employment depends upon the employee’s circumstances and not on a band of reasonable responses.  It also highlights the importance of identifying reasons for the refusal and what relative weight they had in the employee's decision-making process. An employee’s desire to take advantage of redundancy benefits will not necessarily mean that their refusal of an alternative job is unreasonable as they may still give adequate consideration to the alternative role.

The employer has the burden of showing both that the alternative employment offered is suitable and that the employee’s refusal is unreasonable. Assessing the suitability of alternative employment requires an objective assessment as to whether, having regard to the nature of the job offered and the employee in question, the job was a match for the employee. 

An assessment of the nature of the job includes the whole of the job, i.e. its status, content and terms (in particular, wages, hours and location).  As mentioned above, the test is not entirely objective because the question is whether the alternative employment is suitable for the particular employee in question.