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.