The law states that an employee who is dismissed by reason of redundancy is generally entitled to a redundancy payment unless they unreasonably refuse an offer of suitable, alternative employment. In Mid and South Essex NHS Foundation Trust v Stevenson and ors, the EAT held that the claimants were entitled to refuse the new roles offered to them as their concerns were reasonable from their “point of view”.
Basic facts
Following a restructure, Ms Stevenson and two colleagues were made redundant from their jobs as head of Human Resources. They refused the offer of a job as senior HR lead on the basis that it represented a loss of autonomy and status and did not, therefore, constitute suitable alternative employment.
After making them redundant, the trust refused to pay them redundancy pay, arguing that their refusal to accept the alternative roles was unreasonable. The three colleagues (the claimants) lodged tribunal complaints that the trust had failed to make redundancy payments to them, among other things.
Earlier tribunal and EAT decisions
As the trust admitted that the alternative role offered to the claimants differed from their original role, the tribunal had to answer the following questions:
- Was the offer “an offer of suitable employment in relation to” the claimants?
- If so, did they “unreasonably” refuse the offer?
- Did these particular employees “unreasonably” refuse the offer?
The tribunal held that the offer of senior HR lead constituted suitable employment. As the three claimants had unreasonably refused the offer, they were not, therefore, entitled to redundancy payments. The EAT allowed their appeal, holding that the tribunal had failed to make a detailed enough analysis of the suitability of the new role.
Second time round, the tribunal judge held again that the new role was suitable. However, he reached a different conclusion with regard to the question of whether the claimants were justified in refusing the offer. Following the decision in Bird v Stoke-On-Trent Primary Care Trust, he agreed that the question to be answered was not whether a reasonable employee would have accepted the employer’s offer, but whether that particular employee had sound and justifiable reasons for refusing the offer on the basis of the facts as they appeared “or ought to have appeared” to them at the time they refused it.
Although the judge considered the claimants’ concerns (that they would suffer a loss of autonomy and status) to be “objectively groundless”, he agreed that they were not groundless when considered from their “point of view”.
The trust appealed, arguing firstly that the tribunal was wrong to conclude that its findings on suitability were not relevant to the issue of reasonableness; and secondly that it had failed to consider how the facts about the new roles “ought to have appeared” to the claimants.
EAT decision
The EAT noted firstly that although the two questions are related – the suitability of the job and the reasonableness of the refusal – they should be considered separately.
Dismissing the first part of the appeal, the EAT held that, after carrying out a very detailed analysis of the suitability of the two roles, the tribunal judge had satisfied himself that there was a sufficient basis on which to conclude that the claimants had acted reasonably in refusing the offer.
With regard to the second part of the appeal, the EAT held that there was no requirement on employment judges in every case to specifically ask how the facts “ought to have appeared” to claimants. Those words were taken from case law and, therefore, acted as guidance when applying the statutory test of whether the role was unreasonably refused. As they did not constitute a statutory test, the EAT dismissed the appeal.
Comment
This case is an important reminder of the test when considering the question of whether an employee has unreasonably refused an offer of suitable alternative employment. Firstly, a tribunal must consider whether the alternative job offered is suitable. This is the objective part of the test by reference to factors such as pay and status. However, just because a job offer is deemed to be objectively suitable does not mean that it automatically follows that to refuse the offer will be unreasonable.
This leads to the second part of the test which requires the tribunal to consider if the employees’ refusal was unreasonable and this requires a degree of subjectiveness namely a consideration of the suitability of the job from the employee’s perspective. Therefore, as a matter of law, it is possible for an employee to reasonably refuse an objectively suitable offer of alternative employment on the ground of his or her personal perception of the post on offer. The EAT found that the tribunal in the first instance had failed to consider the facts behind the claimants’ perceptions of the new roles.
Notwithstanding the above, each case will still have to be decided on its own facts so where a suitable job offer is made, an employee would be well advised to carefully consider the offer and ensure they have strong grounds before they reject it.