Redundancy – Can it be reasonable to refuse an offer a tribunal finds a reasonable employee would have accepted?

This was the conundrum considered by the EAT in the case of Readman v Devon Primary Care Trust.

In a redundancy situation, if an employee unreasonably refuses an offer of suitable alternative employment made by his or her employer, that employee will forfeit his or her right to a redundancy payment.  In this case, the EAT considered whether Mrs Readman, a nurse, had been unreasonable in refusing an offer of suitable alternative employment which the employment tribunal had found that a reasonable employee would have accepted.  The EAT held that she had not saying that the test of reasonablness is a subjective rather than a wholly objective one.

Mrs Readman was a nurse at the Trust.  She had been placed at risk of redundancy but had been offered the option of three alternative posts.  Two of the posts were not deemed suitable, but one of them, a Hospital Matron position, was correctly found by the employment tribunal to amount to suitable alternative employment under s 141(3) of the Employment Rights Act 1996.  However, Mrs Readman refused this post.  She said that as she had worked in community nursing since 1985, she did not wish to return to working in a hospital setting.   The Trust therefore sought to deny her a redundancy payment, saying it was not obliged to pay her one as a result of the provisions of s 141 of the ERA. The Employment Tribunal found in the Trust’s favour on the grounds that her refusal had been unreasonable, having considered whether a reasonable employee would have accepted the employer’s offer and concluding that he or she would have done.

Mrs Readman appealed to the EAT which overturned the original decision. The EAT held that the Tribunal had erred in applying a wholly objective test to reasonableness when, in fact, the test is whether the employee had acted reasonably in refusing the offer.  In this case, the EAT held that when the particular circumstances in this case were taken into consideration, it was clear that Mrs Readman had not acted unreasonably as she had sound and justifiable reasons for refusing the offer.  Mrs Readman was therefore found to be entitled to a redundancy payment.

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About Belinda Lester
I am the managing director and founder of Lionshead Law a specialist employment law and HR consultancy company.

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