Redundancy: What obligations does an employer have to find suitable alternative employment?

Posted on 3rd September 2020

With employer contributions to the Coronavirus Job Retention Scheme ramping up over the coming months, many employers are having to make the difficult decision to reduce their staffing levels. As a result of these changes many employees have or fear that they will be placed at risk of redundancy. Many clients whom we deal with in this situation will be told by their employer that they have checked current vacancies and unfortunately there are no suitable alternative roles which can be offered. Is this enough? Is this all that is required in a fair redundancy process. This blog provides a more detailed consideration of the rather nebulous duty of considering suitable alternative employment.

What is the duty of looking for alternative employment?

A failure by an employer to have any consideration as to whether there is any suitable alternative employment within the organisation or its group of companies may render a dismissal unfair. The principle of considering whether an alternative position is available was established in Vokes Limited v Bear [1973] IRLR 363, in which an employer failed to attempt to see whether the employee could be employed elsewhere within the group of 300 companies, this rendered the employee’s dismissal unfair.

Although an employer is under a duty to consider alternative roles, an employer is not under a duty to make every possible effort to look for an alternative position. The case of Quinton Hazell Ltd v WC Earl [1976] IRLR 296 made it clear that an employer must make reasonable efforts.

What is bumping?

Bumping is the process of moving a potentially redundant employee into another occupied role, and dismissing the employee currently performing that role. In such circumstances the employee who is being dismissed, will be dismissed by way of redundancy.

An employer is not obliged to consider using this process, however in some circumstances it may be unreasonable not to consider this process.

How can an employer discharge its duty?

To ensure that a fair and reasonable redundancy process has been followed, an employer must fulfil its duty to look for a suitable alternative role for its employees. However, an employer is not under a duty to create an alternative role for its employees.

For an employer to satisfy that a fair process has been followed, it must ensure that it has undertaken a sufficiently thorough search for alternative employment. Employers should document their search.

Not only should an employer search for an alternative role for its employee prior to giving notice to the redundant employee, this search should continue until the date the employee’s dismissal takes effect.

If an employee applies for an alternative role close to his/her termination date, an employer is not obliged to delay the termination of employment once notice has been served. However, an employer may wish to agree an extension to the notice period to ensure that the recruitment process has completed. If this does not occur, then the employee’s employment will come to an end at the original termination date and the employee will remain entitled to his/her statutory redundancy payment in the normal way.

What information should an employee expect to receive?

Not only are employers under a duty to search for an alternative role, they must provide employees with sufficient information about any vacancies. This is to ensure that an employee can take an informed view as to whether the available position is suitable for them.

Case law dictates that an employer cannot assume that an alternative role is not suitable and an employee will not be interested in the role because of its status and salary. Employers must ensure that they provide sufficient information to their employees and the financial prospects of any role should be brought to the employee’s attention.

An employer must decide how it wishes to bring potential vacancies to the attention of its employees. It may wish to speak to employees individually if the group of employees is small, however if there is a large group of employees then it may wish to communicate via the intranet or notice boards. An employer must use internal methods of communication and ensure that all those who are affects have received information of potential vacancies.

What is the position for employees who are on maternity leave?

Employers must remember that employees who are on maternity leave have an automatic right to be offered any suitable alternative vacancies (under Regulation 10 of the Maternity and Parental Leave Regulations). Failure to comply with this requirement will likely render a subsequent dismissal automatically unfair.

The new role must include an offer of a new contract and must come into effect as soon as the previous contract ends. The work to be conducted in the new role must be suitable and appropriate for her to do and the capacity, place of employment and other terms and conditions cannot be substantially less favourable than under the previous contract.

In July 2019 the government announced that legal protections against redundancy where there are suitable alternative roles would be extended to protect new mothers for an additional 6 months after they returned to work. However, at the time of writing there is no clear indication as to when these changes will come into force.

Is an employee entitled to a trial period?

If an alternative role being offered differs wholly or in part to an employee’s current role, then the employee is entitled to a four week trial period. It is to allow both the employer and employee to assess the suitability of the alternative employment.

When considering the differences in employment, things that should be noted include:

  • All differences unless they are trivial or insignificant;
  • Each employment term must be considered individually; its overall effect should not be the only thing that is considered; and
  • The fact that the new terms may be more favourable than the old terms is irrelevant.

Failure by an employer to allow a trial period to take place will render the redundancy dismissal unfair.

A trial period may be extended to last longer than four weeks only for the purposes of retraining the employee in the alternative employment. This extension must be agreed by both the employee and employer, this agreement must be:

  • In writing and finalised before the employee begins work under the new contract.
  • State the date on which the employee’s retraining will finish and
  • Identify the terms of employment that will apply after the employee’s retraining is finished.

What is the implication of refusing an alternative role?

The consequences of refusing an alternative role will depend on whether the role was suitable and whether the rejection was reasonable.

If the rejection by the employee is unreasonable they can be treated as having been dismissed by their employer and lose their right to a statuary redundancy payment. In our experience employers rarely exercise this right.

It is important to look at the reasons for refusal when determining whether a refusal is reasonable. The elements that must be considered including:

  • The employee’s skills, aptitudes and experience and whether they meet the requirements of the job on offer;
  • The terms of the alternative job, these include: status, place of work, tasks to be performed, pay, hours and responsibility and how they compare to the employee’s previous employment.

It is important to look at the specific circumstances when deciding if it is reasonable to turn down an alternative role. These include:

  • The circumstances in which the offer is made – it is likely to be reasonable for an employee to refuse a job if they are given insufficient time to consider it;
  • Whether or not the role is temporary – where an employee was employed on a permanent basis and is offered a temporary role, it is important to look at the duration of the proposed employment; and
  • The employee’s personal situation – an employee is entitled to have regard to their life outside the workplace when considering whether they should accept the role, they can consider factors including: status, the need to relocate, time and cost of travel to new workplace and career choices.

What steps should employees take?

Being faced with the possibility of losing employment due to redundancy can be very daunting. Despite employers having a duty to actively search for suitable alternative employment for employees who are risk of redundancy, employees should ensure that they carry out the following steps:

  • Ask employers questions about alternative roles that are available;
  • Query with employers who they have spoken to about alternative roles;
  • Ask employers who has had sight of their CV;
  • Ask about specific vacancies and teams that may be hiring;
  • Press employers about what steps they are taking to locate suitable alternative roles;
  • Make sure that their employer has your most up to date CV and are aware of their skill set, especially if they have done other jobs or have other experiences;
  • Keep a record of the steps that employers are taking to locate alternative employment.

Our specialist Employment Lawyers have many years’ experience in the law surrounding redundancy. If you require our advice, please call us on 0808 231 6369 or request a call back online at your convenience.

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