Reasonableness of refusal of offer of suitable alternative employment
Under the Employment Rights Act, an employee loses the right to a redundancy payment if s/he unreasonably refuses (either immediately or during a trial period) an offer of suitable alternative employment.
In the next case, the EAT (with whom the Court of Appeal agreed) overturned a tribunal ruling that the Claimant unreasonably refused an offer of suitable alternative employment because, in the tribunal’s view, a reasonable employee would have accepted the employer's offer
The facts in that case were that the Claimant, a nurse, was put at risk of redundancy and offered alternative employment as a Hospital Matron The employer (correctly, in the view of the employment tribunal and the EAT) decided that the new post amounted to suitable alternative employment. However, the Claimant refused the post on the grounds that, having worked in community nursing for the last 23 years, she had no desire to return to work in a hospital setting. The employer declined to pay the Claimant a redundancy payment saying that she had unreasonably refused an offer of suitable alternative employment.
The employment tribunal upheld the employer’s decision to refuse the Claimant 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 s/he would have done.
Overturning the decision on appeal, the EAT ruled that the tribunal had incorrectly applied an objective test to the question of reasonableness.. In this case, the EAT decided that the Claimant’s desire not to work again in a hospital setting, which she had not done for more than 23 years, constituted a sound and justifiable reason for turning down the offer of alternative employment. The EAT therefore allowed the appeal and substituted a finding that the Claimant was entitled to receive a redundancy payment, saying that the Claimant’s decision to refuse the new post ‘for the reasons she gave and viewed from her point of view was within the band of reasonable responses which were open to her.’
The employer appealed to the Court of Appeal. Although the Court of Appeal agreed that the employment tribunal’s decision had to be set aside it disapproved of the EAT applying a ‘reasonable responses’ test to the Claimant’s decision to reject the post offered. The Court of Appeal said that the reasonableness or otherwise of the refusal involves a judgment as to whether an employee has unreasonably refused an offer, "Looking at it from her point of view on the basis of the facts as they appeared or ought reasonably have appeared to her at the time the decision had to be made." A specific judgment needs to be made, not a judgment on whether the decision fell within a reasonable band of responses which a reasonable employee might have made.
As this case shows, the suitability of alternative employment is judged objectively, while the reasonableness or otherwise of the refusal depends on factors personal to the employee and is assessed subjectivity from the employee's point of view at the time of the refusal.
A good illustration of the application of the test occurred in a case in 1977. In that case, a secretary refused to move to new offices because they were located over a sex shop. The tribunal concluded that the employee was being unduly sensitive and held her refusal to be unreasonable. Overturning that decision, the EAT stated that the test was not the attitude of a reasonable woman, but the reasonable objections of that claimant.
Suitability covers factors relating to the nature of the new employment as they affect the employee, such as job content, responsibility, status, terms and conditions and job prospects. Reasonableness requires consideration of factors relating to the employee’s personal circumstances, such as domestic arrangements, housing and schooling.
If you would like advice about how the issues in this note apply to your situation, please contact Tony Brown on 01225 740097 or by e mail to firstname.lastname@example.org
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