The suitability of alternative employment

30 September 2021

We regularly advise employers on the steps to follow in order to carry out a fair redundancy process, and part of that involves considering alternative roles for employees who are at risk. Sometimes employees are keen to be redeployed, but there are situations where it can be more complicated. In a recent case, Stevenson and Others v Mid Essex Hospital Services NHS Trust, the Tribunal gave useful insight into factors to consider when deciding whether an employee’s decision to refuse an alternative role is ‘sound and justifiable’.

Legal tests for suitability

During the redundancy consultation period, employers are obligated to look to offer affected employees alternative roles. If an employer offers a suitable alternative role, but the employee unreasonably refuses to accept it, then the employee will lose their entitlement to receive redundancy pay.

There is a two-part test to determine role suitability. The first part is an objective test – for example whether the employee has the necessary skills, and how salary and status of the new role compares with the current role. The second test is whether the employee has reasonable cause to refuse the role, on a subjective basis. Good reasons may include hours of work clashing with caring responsibilities, or a less convenient work location to travel to due to distance or public transport routes.

Case background

Three NHS employees had the role of Head of HR. Following a restructure, three NHS Trusts were integrated, and the Head of HR roles were made redundant. All three employees would have been entitled to receive enhanced contractual redundancy payments. They were offered alternative roles as Senior HR Leads, but these were refused. The employer decided that the employees had unreasonably refused suitable alternative employment and that on that basis, it would not make redundancy payments.

The employees’ current roles were the same NHS pay band as the proposed new Senior HR Lead roles, had the same pay, location, and hours. However, the employees argued that the new role had a reduced level of autonomy and status. The HR Director agreed to make changes to the job descriptions, but amendments were not sent for the employees’ consideration before their employment termination dates. The employees decided not to accept the roles as a suitable alternative.

Employment Tribunal’s decision

The Employment Tribunal dismissed the employees’ application for redundancy payments. The Employment Judge considered the alternative role as suitable and that the employees had been ‘inflexible and un-cooperative’ towards the HR Director. One employee, Mrs Leeke, said that if the revised job description had been shared then an agreement could have been reached. The Employment Judge said that Mrs Leeke’s readiness to accept the role indicated her belief that the changes were not substantive. The Judge also noted the fact that in the new role there would be many more staff to manage and that the lack of the word ‘manager’ in the job title, was not indicative of reduced status. It was alleged that Mrs Stevenson’s and Mrs Stewart’s judgements were clouded because of negative feelings towards the HR Director, and that they had unreasonably not considered/rejected a trial period. Each Claimant appealed the decision.

Employment Appeal Tribunal’s view

The Employment Appeal Tribunal said the Tribunal had failed to give ‘adequate consideration’ to the ‘degree of autonomy and responsibility’ the employees would have in the new role compared to the original role. There was a failure to consider the changed reporting line – there was another layer of management between the new role and HR Director’s role, and the fact they would be reporting to new Heads of HR was ‘fundamental to the status of the new posts’. It returned them to the reporting position they had been in 3 years before. The new job description had several responsibilities which were qualified by the words ‘as directed’, ‘as allocated’ and ‘providing support’. The original role did not have such qualifications. This pointed to practical differences in the status of the roles. The function of ‘Trust Recruitment and Retention Lead’ did not appear in the new job description. There was also a failure to consider the employees’ ‘serious lack of faith in the HR Director’ whom they would report to, and the Tribunal had failed to assess the reasonableness of their refusal to work with the HR Director. The case was sent back to the Employment Tribunal for a reconsideration of the facts.

Points to note

During redundancy consultation it is important to be prepared to compare job descriptions with employees and be clear in answering employee questions. Careful language should be used in the job description to accurately reflect the seniority of the role. Give adequate time for consultation – the law only specifies minimum consultation periods for collective redundancies, but even individual consultations should involve meaningful consultation, and rushing can mean that important stages are overlooked. We always recommend you document the decisions you take and your rationale.

As noted in our previous article, it is important to remember that, if an employee makes a claim for a redundancy payment, it is down to the employer to show both that alternative employment offered was suitable and that the employee’s refusal was unreasonable.

Pimlico Plumbers – the saga continues!

25 March 2019

Despite succeeding at the Supreme Court in a key part of his claim, it was announced last week that Gary Smith’s claim against Pimlico Plumbers for holiday pay had been dismissed by an Employment Tribunal.

As we previously reported, Mr Smith had argued that despite being treated as self-employed during his six years of working for Pimlico Plumbers, he had actually been a ‘worker’ and therefore should have received holiday pay. The case was seen by some as being a landmark decision in relation to the gig economy.

The reason why his claim was dismissed is because of time limits. The usual time limit for bringing a claim to the Tribunal is three months less one day (this can be extended in some circumstances, such as for early conciliation). The Employment Tribunal found that in order to succeed, Mr Smith would have had to bring a claim for each lot of holiday pay within 3 months (less one day) of each period of holiday.

The issue turns on whether the holiday pay is part of a ‘series of deductions’ (in which case the claim would need to be brought within the last 3 months of the last non-payment of holiday pay) or whether they are individual deductions which therefore have their own individual time limit. The Tribunal obviously have concluded the latter, but it isn’t clear why they haven’t followed the decision in the case of King v Sash Windows, which we covered here.

Mr Smith’s solicitors have said that they intend to appeal the decision, arguing that as it was not made clear to him that he had these rights, he could not be expected to enforce them. He is therefore continuing with the case, which has been going since 2011 and has no sign of ending any time soon!

We will of course update you on any further developments as the case proceeds.

Pimlico Plumbers – the saga continues!

25 March 2019

Despite succeeding at the Supreme Court in a key part of his claim, it was announced last week that Gary Smith’s claim against Pimlico Plumbers for holiday pay had been dismissed by an Employment Tribunal.

As we previously reported, Mr Smith had argued that despite being treated as self-employed during his six years of working for Pimlico Plumbers, he had actually been a ‘worker’ and therefore should have received holiday pay. The case was seen by some as being a landmark decision in relation to the gig economy.

The reason why his claim was dismissed is because of time limits. The usual time limit for bringing a claim to the Tribunal is three months less one day (this can be extended in some circumstances, such as for early conciliation). The Employment Tribunal found that in order to succeed, Mr Smith would have had to bring a claim for each lot of holiday pay within 3 months (less one day) of each period of holiday.

The issue turns on whether the holiday pay is part of a ‘series of deductions’ (in which case the claim would need to be brought within the last 3 months of the last non-payment of holiday pay) or whether they are individual deductions which therefore have their own individual time limit. The Tribunal obviously have concluded the latter, but it isn’t clear why they haven’t followed the decision in the case of King v Sash Windows, which we covered here.

Mr Smith’s solicitors have said that they intend to appeal the decision, arguing that as it was not made clear to him that he had these rights, he could not be expected to enforce them. He is therefore continuing with the case, which has been going since 2011 and has no sign of ending any time soon!

We will of course update you on any further developments as the case proceeds.