Thanks for your patience. There are two separate issues here – was there a redundancy and has a fair procedure been followed.
The term 'redundancy' is used to describe a situation in which an employer decides to reduce the number of its employees. There are various reasons as to why redundancies may be required, such as economic pressure, changes in the nature of products/services offered, internal reorganisation, workplace relocation, etc. The reason for the proposed redundancies will rarely be challenged and the employer will simply have to justify that the actual reason satisfied the statutory definition of a redundancy, which can be found in The Employment Rights Act 1996:
1. Business closure – where the whole of the employer’s business is closed
2. Workplace closure – closure or relocation of one or more sites
3. Reduced requirement for employees to carry out work of a particular kind (this is where many employees get confused as they believe a job has to actually disappear for them to be made redundant).
The third reason above creates the most challenges. Examples of when there is a reduced requirement to do work of a particular kind are:
- The same amount of work remains but fewer employees are needed to do it. This includes consolidating some of its jobs (e.g. spreading out certain jobs amongst existing employees).
- There is less work of a particular kind and fewer employees are needed to do it (both the work and the headcount shrink)
- There is less work of a particular kind, but the same number of employees are required overall.
So as long as the employer can show that their situation fell within one of the accepted reasons for declaring a redundancy, the test will be satisfied and the focus then shifts on the remainder of the redundancy procedure. This would include what consultation took place, whether any suitable alternative employment was offered to those at risk and the general fairness of the redundancy procedure applied by the employer.
Moving on to the next issue, if there is a redundancy situation, an employer has a duty to offer those employees at risk any suitable alternative employment (“SAE”) that may exist at the time. The objective is to keep the employee in a job rather than make them redundant. Therefore, if an employee accepts an offer of SAE, their employment will continue in the new position and they would lose their entitlement to a redundancy payment.
If the offer is considered unsuitable and the employee refuses it, they will be made redundant and still receive redundancy pay. However, if the offer was suitable and the employee unreasonably refuses it, they would effectively be resigning and will lose their entitlement to redundancy pay.
So the main issue is what makes an offer suitable and when can an employee reasonably refuse it. The most common factors that would make an offer unsuitable are:
- Job content/status – drop in status, substantial changes in duties, etc.
- Pay and other benefits – significant drop in earnings/benefits (e.g. basic pay, bonuses, overtime, sick pay, holidays)
- Working hours – change in shift pattern, removal of overtime, extension/reduction of working hours
- Change of workplace – new location making it unreasonable to travel to the new place of work
- Job prospects – going from permanent to temporary work, becoming self-employed or being employed on a fixed-term contract.
Where an offer of alternative employment has been made and its terms and conditions are different to the employee's current terms, they have the right to a 4-week trial period. If during the trial period they decide that the job is not suitable they should tell their employer straight away. This will not affect their employment rights, including the right to receive statutory redundancy pay.
So it is important to consider whether any offer that has been made is suitable or if there are reasonable grounds to treat it as unsuitable and safely reject it, opting for redundancy instead.