Redundancy - alternative employment and trial periods

Redundancy - alternative employment and trial periods

A dismissal for redundancy is likely to be unfair unless the employer has considered whether there is suitable alternative employment within the business (or group). If suitable alternative employment is offered, it might be subject to a statutory 4 week trial period if the role, place of work or other terms and conditions are different from the previous job.

Statutory trial periods in redundancy

A statutory trial period starts at the end of the employee's employment under their old contract or within 4 weeks of it ending. What happens if a role is deleted in a reorganisation and an employee works in another suitable role for more than four weeks - do they lose the right to a redundancy payment?

East London NHS Trust v O'Connor

In East London NHS Trust v O'Connor, the employee was a PSI Worker who had been employed for nearly 20 years. He was told his post was going to be deleted in July 2017 and he was at risk of redundancy.

He was also told that formal notice of dismissal for redundancy would follow at some point. He started a trial period as a Care Coordinator in July 2017. He did not agree with the employer that it was suitable alternative employment. He raised a grievance that was rejected.

Refusal to pay redundancy payments

He went off sick and continued to refuse the Care Coordinator role. He was eventually dismissed with notice in December 2017. The employer refused to pay him a redundancy payment. They said he had undertaken a statutory trial period for the Care Coordinator role which had expired in August 2017. The role had been suitable alternative employment which he had refused and so he was not entitled to a redundancy payment.

What is the definition of ‘alternative employment’?

The employment appeal tribunal agreed that the employee had not been given formal notice of termination in July 2017 despite his role being deleted. Deletion of a role does not necessarily amount to notice of dismissal. As a result, a statutory trial period could not have begun (because it can only start at the end of the original contract) in the Care Coordinator role.

The EAT sent the case back to the employment tribunal to decide whether the employee's dismissal in December 2017 was for redundancy and whether a redundancy payment was due.

Rules about suitable alternative employment

This case highlights the complexity of the rules about suitable alternative employment and trial periods. Statutory trial periods for suitable alternative roles can only start at the end of original contract. That means that the employee must have been given notice and the notice period must have expired. Employers who fail to get their processes right might find themselves having to defend unfair dismissal claims on more grounds than just redundancy.

Kate Fretten, Employment Partner says "Employers should be careful in redundancy situations to meet all of the timescales correctly in order to avoid possible claims. The rules can seem complicated but even a simple timeline showing employees’ notice periods and proposed trial periods can be helpful in managing the process."

At Frettens, all of our solicitors offer a free initial meeting or chat on the phone to answer your questions. If this article raises issues for you or your business, please call us on 01202 499255 and KatePaul or Chris will be happy to discuss it with you.

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