Redundant questions

Commission for Healthcare Audit & Inspection v Ward

Tribunals have to ask themselves two questions when considering whether an employee has unreasonably refused the offer of a suitable, alternative job. In Commission for Healthcare Audit & Inspection v Ward, the Employment Appeal Tribunal (EAT) said that tribunals can take their own (objective) views into account when considering whether the employee’s (subjective) refusal was unreasonable.

Basic facts

Ms Ward was employed as a senior manager on a salary of £80,000. She was told that she was being made redundant as part of a restructuring exercise, following which she lodged a grievance on 1 September 2006.

The Commission then identified two possible alternative jobs (one of which was a completely new post) but she rejected both on the basis that they were not suitable. It then made a number of revised offers with regard to the new post, the third being in January 2007.

By that stage, Ms Ward was so disillusioned by the way she had been treated that she rejected the revised offer and claimed she was entitled to a redundancy payment.

The Commission argued that she had rejected an offer of suitable, alternative employment contrary to section 141 of the Employment Rights Act (ERA)1996 and therefore had forfeited her right to a redundancy payment.

Relevant law

Section 141 of the ERA states that:
a) if an employee unreasonably rejects an offer which does not differ substantially from their old job, or
b) if an employee unreasonably rejects an offer which does differ “from the corresponding provisions of the previous contract but the offer constitutes an offer of suitable employment in relation to the employee”
they lose their right to a redundancy payment.

Tribunal decision

Although the tribunal said the new post was suitable for Ms Ward, it decided that her refusal of the third offer was reasonable. This was because of the circumstances in which the offer was made and the relationship between the parties by the time it was made, both of which were relevant to the reasonableness of her refusal.

It said that Ms Ward had become understandably disillusioned with the whole redundancy process. She had asked in mid-October to have a full and frank discussion with management, but despite promises, this did not materialise. Nor did she receive a letter from the Commission in early December offering to have a discussion with her and telling her that the post would be externally advertised.

In the circumstances, she was therefore entitled to a redundancy payment as the suitability of the job was marginal.

EAT decision

And the EAT agreed. It said that her behaviour had to be judged from her point of view “on the basis of the facts as they appeared, or ought reasonably to have appeared, to her at the time the decision had to be made.” The onus was therefore on the Commission to prove that her refusal was unreasonable.

It agreed with the Commission that section 141 involved a two-stage test – firstly, an objective question as to whether or not the post was suitable; and secondly a subjective question as to whether or not her refusal was reasonable in the circumstances.

However, it disagreed with the Commission’s argument that the two questions were completely separate and had no bearing on each other. It said instead that the tribunal was right, when trying to decide if her (subjective) refusal was unreasonable, to take into account their own (objective) view that the post was only marginally suitable for her.

Not surprisingly, perhaps, the EAT said it will usually be easier for employers to show that their employee’s refusal is unreasonable if the new job offer is “overwhelmingly suitable”.

It also rejected the Commission’s argument that the tribunal’s decision was perverse, saying that the question for the tribunal was whether, subjectively, Ms Ward was unreasonable in refusing the job offer. It concluded that the tribunal was right to take the whole factual picture into account when reaching its conclusion.