Redundancy and Suitable Alternative Employment

[Thanks to Kate Balmerof Devereux Chambers for preparing this case summary]

Can an employee act reasonably in refusing an offer of suitable alternative employment where the Employment Tribunal correctly concludes that a reasonable employee would have accepted the employer's offer?

Yes, says the EAT in Readman v Devon Primary Care Trust.

Mrs Readman, a nurse, was placed at risk of redundancy and offered three alternative posts by her employer. One of the posts, a Hospital Matron position, was correctly found by the employment tribunal to amount to suitable alternative employment under s 141(3) of the ERA 1996. Mrs Readman refused this post on the grounds that, having worked in community nursing since 1985, she had no desire to return to a hospital setting. In the circumstances, she was denied a redundancy payment by her employer, relying on s 141 of the ERA. The Employment Tribunal similarly refused Mrs Readman a redundancy payment on the grounds that her refusal had been unreasonable. In reaching this conclusion, the tribunal asked itself, in effect, whether a reasonable employee would have accepted the employer's offer and concluded that they would have done.

Overturning the decision on appeal, the EAT held that the tribunal had fallen into error by applying a wholly objective test to the question of reasonableness. The proper question for a tribunal, when considering whether a refusal of suitable alternative employment is unreasonable, is whether the employee in question acted reasonably in refusing the offer. This will involve a consideration of whether the reason, given by the individual, constituted a sound and justifiable reason for turning down the offer.

The EAT therefore allowed the appeal and substituted a finding that Mrs Readman was entitled to receive a redundancy payment.