Suitable alternative roles: HR guide
In this guide I cover losing the right to a statutory redundancy payment, trial periods and unfair dismissal.
Losing the right to a statutory redundancy payment
If an employee unreasonably refuses an offer of suitable alternative employment with the organisation or an associated employer the employee will lose their right to a statutory redundancy payment. Employees who have at least two years’ continuous service with their employer and are made redundant are usually entitled to a statutory redundancy payment. The payment is calculated by reference to length of service, age and earnings (up to a maximum of £571 per week) with an overall cap of £17,130). Here is a link for calculating these payments.
There are effectively two stages relating to suitable alternative roles.
First, has there been an offer of suitable alternative employment? This involves making an assessment of the role in terms of, for example, status, pay, duties, hours, location and whether the role is suitable for the particular employee.
Second, even if the role is suitable, is it still nevertheless reasonable for the employee to turn the role down? Factors to consider could include the circumstances in which the offer was made, whether the role is temporary or permanent and the employee’s personal situation. Personal matters could include, for example, status, whether there has been a request to relocate, commuting times and costs and career paths.
Each case will depend on the circumstances.
An employee is entitled to a statutory trial period for the alternative role, which lasts four weeks. This could be extended for the purposes of training, if agreed in writing.
If, for instance, an employee gives notice during the trial period the question will still be whether, for the purposes of a statutory redundancy payment, the employee unreasonably refused an offer of suitable alternative employment.
Generally, employees who have at least two years’ continuous service with their employer have the right not to be unfairly dismissed. As part of the requirement to follow a fair redundancy process, employers need to search for suitable alternative roles. There is no obligation to create new roles, but employers should carry out a thorough search for suitable alternative roles within the organisation and, possibly, within group companies too.
This guide is intended for guidance only and should not be relied upon for specific advice.
Do check mattgingell.com regularly for updated information.