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.