An employee who unreasonably rejects an offer of suitable alternative employment is not entitled to a statutory redundancy payment. In Devon Primary Care Trust v Readman, the Court of Appeal has confirmed the correct test for establishing whether an employee's refusal of an offer of suitable alternative employment in a redundancy situation is reasonable.
Mrs Readman was employed by Devon Primary Care Trust as a community matron. Following a restructuring, she was offered an alternative position as a hospital matron with similar management responsibilities, and the same seniority and pay. Mrs Readman argued that this was not a suitable alternative role for her since she had decided much earlier on in her career that she did not wish to be hospital-based. However, the Trust considered that she had unreasonably refused the offer of alternative work and she received no redundancy payment.
The Court of Appeal noted that neither the Employment Tribunal nor the EAT had properly analysed Mrs Readman's subjective reasons for refusing the offer of alternative employment. For example, the Tribunal might have put too much emphasis on the fact that she had expressed a desire to emigrate, and had failed to consider properly the explanation that her chosen career path was to avoid hospital working, evidenced by the fact that she had spent over 30 years working in the community. The case was sent back to the Employment Tribunal to decide the issue by applying the correct test. First, the Tribunal should determine on an objective basis whether the offer of employment was suitable, and then consider subjectively whether the employee's refusal of that offer was reasonable. This would necessarily involve looking at factors personal to the individual employee.
This case confirms that employers must identify the precise reasons for an employee's refusal of an offer of suitable alternative employment, and consider these reasons from the employee's point of view. This can be a difficult judgement call, particularly where substantial redundancy payments are involved. Looking ahead to a potential Tribunal claim, it is also important to be able to show that these steps have been followed.
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