Reasonable refusal

Employees can be denied a statutory redundancy payment if they unreasonably refuse an offer of suitable, alternative employment. In Devon Primary Care Trust v Readman, the Court of Appeal held that, when deciding whether the employee acted unreasonably, tribunals must consider factors personal to them and assess reasonableness from their point of view.

Basic facts

Ms Readman, a community matron in the Teignmouth and Dawlish locality, was told in November 2007 that she was at risk of redundancy following a management reorganisation. She applied for one of the new leadership posts, but was unsuccessful.

The Trust offered her another post in July 2008 as a modern matron at Teignmouth hospital. This post involved no loss of status or pay, but was hospital rather than community based. She refused the offer, saying that her career path and qualifications were in community nursing and she had not worked in a hospital since 1985.

It then offered her two posts, both at a lower grade. In November 2008, she started a four-week statutory trial period in one of them, but resigned after she received a job offer in Canada and claimed a redundancy payment. The Trust said that, as she had unreasonably refused the offer of suitable alternative employment as a modern matron, she was not eligible for redundancy pay.

Tribunal and EAT decisions

The tribunal accepted that the two posts she had been offered at a lower grade were not suitable, but that the offer of modern matron which she had rejected “almost out of hand”, was suitable. Although the tribunal found that whether a refusal of an alternative job is reasonable depends on factors personal to the employee, it went on to find that she refused the job without attempting to consider what aspects of the job would be the same or different. They found that she refused because she wanted to emigrate.

On appeal, the EAT said that the tribunal had stated the correct test, but applied it wrongly. It was clear that the core reason she turned down the offer was that she had no desire to work in a hospital, having worked in the community since 1985. Viewed from her point of view, this was within the band of reasonable responses which were open to her. The EAT therefore allowed the appeal and substituted a finding that she was entitled to a redundancy payment.

Decision of Court of Appeal

The Court of Appeal agreed with the EAT that the tribunal had “erred fundamentally” when it failed to address Ms Readman’s central point, which was that it was not unreasonable to turn down an offer of work in a hospital, albeit a small one, after 25 years in the community. It also failed to ask whether it was unreasonable for her to decline to work in the hospital.

However, the Court did not agree with the EAT that the tribunal's decision was "plainly and unarguably wrong", or that the contrary result was "plain and obvious". As the question of the reasonableness of the refusal was a matter of fact for the tribunal, it was for the tribunal and not the EAT to decide that question.

It also criticised the EAT for importing the reasonableness test used in unfair dismissal cases into a case dealing with a redundancy payment, The correct test was whether this particular employee in this particular situation acted reasonably in refusing the offer of employment, not whether the decision fell within a reasonable band of responses which a reasonable employee might have made.

It therefore allowed the appeal and remitted the case for consideration by the tribunal.