What is Suitable Alternative Employment in a Redundancy?

If your role is redundant, your employer has a duty to consider whether there is suitable alternative employment for you.

If there is a suitable vacancy, your employer must appoint you to that role, even if there are better external candidates. However, the vacancy does have to be suitable. Your employer doesn’t have to appoint someone unsuitable into a role, just because there’s a vacancy.

What is suitable?

Suitable does not mean a perfect fit. There does however need to be a loose fit, taking into account the requirements of the job and the qualifications of the employee.

These are the factors your employer should consider in order to determine whether alternative employment is suitable:

• salary
• prestige/seniority
• skills
• hours
• location

Some roles may not seem suitable immediately but your employer should consider whether the role could become suitable if you are given training and support.

Notifying you of job roles

Your employer should advise you of any alternative role in writing before your employment ends.

There needs to be enough information about the job, including what you can expect to earn. If your employer doesn’t do this, there’s a strong chance that an Employment Tribunal will say they haven’t acted reasonably.

How thoroughly should your employer search for alternative employment?

Your employer is not expected to create a new job. However, as part of the redundancy procedure, they have to make a reasonable effort to identify existing opportunities.

For a small business with very few staff, this may be relatively easy. However, for a larger business with thousands of employees, the search will take much longer.

If your employer is part of a group of companies, they should make a reasonable search of potential vacancies within the group and not just the company that employs you.

Even if the alternative employment becomes apparent late in the day, it may be that your employer needs to extend the notice period to give you chance to consider it.

Your employer should consult with you about possible alternative employment, even if they think you wouldn’t accept it. Employers are expected to consider slightly lower paid jobs  but not those that are significantly lower paid.

What about women on maternity leave?

If a woman on maternity leave is to be made redundant, she is entitled to trump everyone else for any suitable alternative employment that is available. This includes vacancies in a group company.

The rules applies even if the woman on maternity leave is not the best candidate. If she is not offered that role and is subsequently made redundant, her dismissal is automatically unfair. This is true even if it’s several months before she returns from maternity leave.

There are equivalent laws that apply equally to parents on adoption leave and parents on shared parental leave.

Four week trial period

If  your employer offers you alternative employment, you’re entitled to a four week trial period.

If, at the end of that trial period, you don’t resign and you’re not dismissed, then you officially take up the new role. This means that your employer doesn’t have to pay you any redundancy payment because your employment isn’t ending.

If you resign or your employer dismisses you during the trial period, this is deemed to be by reason of redundancy. Provided that your resignation was reasonable, you should still get your redundancy payment.

Can you lose your entitlement to a statutory redundancy payment?

If you unreasonably refuse an offer of suitable alternative employment, you lose your right to a redundancy payment. This is true whether you refuse before or during the trial period.

However, your employer mustn’t presume that your refusal is unreasonable. t’s probably reasonable for you to refuse an alternative role if:

• it leads to a significant pay cut
• it involves unsociable hours
• you would need to relocate
• there would be a loss of status

Provided you can explain why the role wasn’t suitable for you, an employment tribunal is likely to be sympathetic to your claim for a redundancy payment (although it’s better to settle any claim rather than go to a tribunal possible).

Agreeing a settlement agreement with your employer

If you and your employer are in dispute as to whether they’ve done what they’re required to do, it may be that the best option is to agree a settlement agreement.

You will need to make sure that any settlement agreement reflects the value of any rights you’re giving up, taking into account:

• whether your employer has broken the law
• your financial losses
• how easy it would be to prove your case if your brought legal action

It may be that you can negotiate a settlement agreement on the basis of good will.

Do you need legal advice on a settlement agreement?

If you’ve received an offer of a settlement agreement as an alternative to redundancy, you will need to make sure you receive legal advice on it.

We advise clients throughout the UK. We provide clear and prompt advice on a confidential basis.

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