Redundancy: Offer of Alternative Employment

Summary of the law:
An employee who is about to be made redundant and who is offered a “suitable alternative employment” by his original employer, or an associated employer, will lose his redundancy payment if he accepts the job, or if he unreasonably refuses the offer.

What is an offer of “suitable alternative employment”?
An offer of “suitable alternative employment” is one which:

• Is made by your original employer or an associated employer; and
• Is made before you are made redundant; and
• The new employment begins as soon as you are made redundant or within four weeks of your redundancy; and
• It is either on the same terms and conditions as your previous job or on other suitable terms.

It is an objective question whether an offer is “suitable”. But, whether it was reasonable for you to refuse, depends on your personal situation.
What is the effect of an offer of suitable alternative employment?

If you are offered a new job on terms which are different from you old job, you have a four-week trial period. If you accept the new job, and complete the trial period, your employment continues as if you were never redundant. Consequently, you will lose your redundancy payment and the right to claim unfair dismissal. If you refuse to take the job unreasonably, you will also lose you redundancy payment and, probably, any claim for unfair dismissal. If your refusal is reasonable, however, you may be entitled to redundancy payment and may have an unfair dismissal claim.

Remedies:

The amount of statutory redundancy payment depends on your age, length of continuous employment and gross average earnings. The maximum payment is currently capped at £6,900 (£7,200 if you were made redundant on or after 1 February 2001). Where you combine a claim for unfair dismissal with a claim for redundancy payment, any redundancy payment is likely to be offset against your award. In certain circumstances, your employer may be able to pay a pension instead of a redundancy payment.

Who decides the claim?

You must make your claim at the employment tribunal which is local to where you worked. Your application for redundancy must arrive at the tribunal within 6 months of the relevant date. If you complain of unfair dismissal, your complaint must arrive within 3 months, beginning with the effective date of termination. Only in very exceptional circumstances, you may be allowed to make a later claim if the tribunal considers it just and fair, having regard to the reason for your delay.

Legal Provisions: Sections 138 and 141 Employment Rights Act 1996.

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