Instead of being made redundant, an employee may be offered another job role with the company, which is classed as suitable alternative employment, if the employee has redundancy rights – been employed with the employer for at least 2 years by the time the job ends.
If a suitable job is available or comes up in the company, an employer must offer it rather than make an employee redundant.
What makes an alternative role suitable?
Determining what is suitable alternative employment will usually depend on:
- How much an employee will be paid and what benefits they will get;
- Where the job is;
- How similar the role is to the current job;
- What terms are being offered;
- What skills and abilities are needed in relation to the job;
Maintaining status and pay is not necessarily sufficient to make an alternative job role sufficient, if there are other clear differences in the role such as not requiring the same skills or working hours would be different, the role would likely to be unsuitable.
The process of being offered suitable alternative employment
Employers should look to move employees who otherwise could be made redundant into other job roles within the company.
Available jobs within the company must be identified and discussed with the employee. If a role is suitable to the employee this should be offered to them instead of redundancy.
If more than one employee is interested in the same role, the role must be offered to employees on maternity leave first. For other employees, a fair process must be followed to select a candidate, e.g. interview process, skills selection etc.
When offering alternative employment employers must ensure they do the following:
Offer the suitable alternative employment to the employee in writing, if jobs are made available to employees to apply for and they do not apply for any, and the employee is made redundant, it would be hard to argue that the employee has forfeited the right to a redundancy payment, due to suitable alternative employment, unless a job offer had been actually made to them.
An offer of alternate employment must be made before the employee’s employment under their previous contract ends. Any new job should start within 4 weeks of the employees’ current job ending.
An employee moving into a new role as an alternative to redundancy have the right to a 4-week trial period. If after the 4-weeks trial they do not feel the role is suitable for them, then they can ask to be made redundant, if they have a good reason why the job is not suitable.
The 4-weeks should start after the notice period has been worked and the existing contract has ended. This will avoid any confusion or disputes if the trial period is not successful.
It is recommended to provide the employee with the conditions of the trial period in writing, sometimes employees need longer to train for a new job, so end dates should be confirmed.
If an employee is offered more than one alternative position, then they can try each job for 4 weeks.
After the trial period
If during the trial period the employer and employee agree that the job is not working out, then the employee would still be entitled to redundancy pay.
An employee must tell their employer in writing that they feel the job is not suitable stating the reasons why.
Employers must also inform employees in writing if they feel the job is not suitable and provide reasons why.
An alternative job may not be suitable for the employee for the following reasons:
- Job is lower paid;
- Health issues restrict from doing the job;
- There is difficulty getting there, as it could be a longer journey than the old job, or lack of public transport etc;
- It would cause disruption to family life.
Grounds for refusing alternative employment
It depends on the specific circumstances whether it is reasonable for an employee to turn down an offer of an alternative role. This can include:
- The circumstances in which the job offer was made, and the time that they were given to consider it;
- Whether or not the role is temporary;
- The employee’s personal situation and the impact it may have on their travel to work or their family responsibilities.
An employer can refuse to pay redundancy pay if they do not accept the reason the employee gave for turning down the role.
Important points to remember
The main difference between a suitable alternative role and a non-suitable alternative job offer is that unreasonably refusing a suitable alternative role means an employee may be treated as dismissed without being paid a statutory redundancy payment.
If an employer wrongly treats a job offer as a suitable alternative and refuses to pay an employee redundancy pay the employee could lodge a claim with the employment tribunal for redundancy pay (both statutory and enhanced) and unfair dismissal.
When revising job roles, it is important for employers to remember:
- To compare the new role with what the employee did, not just compare to the job descriptions, as quite often job descriptions can be out of date.
- If an employee’s personal circumstances mean it is reasonable for them to refuse a suitable alternative role, they will still be entitled to a statutory redundancy payment
- Make sure that they have documented what impact refusing a suitable alternative job role has on entitlement to any enhanced company redundancy pay.