Suitable alternative employment – when is an employee reasonable in turning it down?

Where an employee refuses an offer of suitable alternative employment in a redundancy situation, what factors should the Employment Tribunal (ET) take into account when deciding whether the employee had acted unreasonably in refusing the offer? Given an employee’s right to a redundancy payment is forfeited where their refusal is unreasonable, employers need to carefully understand what this means.

Subjective, as well as objective, factors ruled the Employment Appeal Tribunal in Readman v Devon Primary Care Trust, overturning an earlier ET decision which on the facts had only given weight to what a reasonable employee would have done in the particular circumstances of the case (an objective test) and not to any of the claimant’s personal arguments and circumstances (a subjective test).

In this case, R, a nurse, was placed at risk of redundancy by her employer. One of three alternative posts offered by her employer, a Hospital Matron position, was correctly found by the ET to meet the criteria for suitable alternative employment under s 141(3) of the ERA 1996. R, however, refused to accept the post on the basis that she had worked in community nursing since 1985 and did not want to return to a hospital setting. In the circumstances, she was denied a redundancy payment by her employer who relied on the fact they believed her refusal to be unreasonable. The ET similarly refused R a redundancy payment on the grounds that her refusal had been unreasonable within the meaning of the legislation. In reaching its conclusion, the ET had asked itself whether a reasonable employee would have accepted the employer’s offer and concluded that they would have done.

Hearing the case on appeal, the EAT overturned the ET’s ruling. The EAT concluded the ET had been wrong to apply a completely objective test to the question of reasonableness. It should have considered whether R herself had acted reasonably in refusing the offer, considering the soundness and justifiability of the reason given for turning down the offer. It was not supposed to have only given weight to what it thought a hypothetical ‘reasonable employee’ would have done in the same circumstances.

Allowing the appeal, the EAT substituted a finding that R was entitled to receive a redundancy payment. This case reaffirms the approach that has been previously followed and confirms that employees are entitled to rely on their own personal circumstances in looking at alternative positions.

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