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Document updated/added on 14.05.2021

Topic: Redundancy

Refusal of suitable alternative work letter
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Refusal of suitable alternative work letter

Refusal of suitable alternative work letter

An employee selected for redundancy can lose their right to statutory redundancy pay if they unreasonably refuse an offer of suitable alternative employment. Use our letter to rely on these provisions.

Statutory provisions

Entirely separate to the question of whether a redundancy is a fair dismissal or not, there are statutory provisions in place which say that an employee forfeits their right to a statutory redundancy payment (SRP) where they “unreasonably” reject an offer of “suitable” alternative employment, provided you make that offer before their employment under their current contract ends and the new role is to start no later than four weeks after their employment ends. Also, be aware that, where suitable alternative employment is offered, it’s subject to a four-week statutory trial period if the terms of the new employment differ in any respect from the employee’s existing terms – see our Offer of Alternative Work. The trial period gives you the opportunity to try out the employee in the new role and gives them the chance to try the new role for themselves. The SRP forfeiture provisions also apply if the employee unreasonably terminates suitable alternative employment (or gives notice to terminate it) during this trial period.

What’s suitable?

Suitability requires an objective assessment of whether, having regard to the nature of the role offered and the employee in question, the job is a match for them. This involves considering such matters as status, job duties/responsibilities, salary, working hours and place of work comparative to the terms of the employee’s current role, as well as their skills and experience and whether they meet the requirements of the new role. For example, a drop in status, a significant pay cut or the role failing to use the employee’s skills are all likely to make an offer unsuitable.

What’s an unreasonable refusal?

Even if a role is suitable, an employee’s refusal of it can still be reasonable and they won’t then forfeit their right to a SRP. Whether their refusal is reasonable depends on their own subjective reasons for rejecting it. This will cover factors relating to their personal circumstances such as their health and family commitments. For example, an employee may not be able to relocate because of their children’s schooling or their partner’s place of work. In practice though, the more suitable the offer, the easier it will be for you to show that the employee’s refusal was unreasonable. So, where an employee does refuse or fails to accept an offer of what you consider to be suitable alternative employment, ask them to provide their detailed reasons for refusal. That way, you can assess if they’re potentially reasonable.

No SRP

Our Refusal of Suitable Alternative Work Letter is for use where you’re now making the employee redundant in circumstances where they’ve unreasonably refused an offer of suitable alternative employment. It encloses our Redundancy Termination Notice, but its main purpose is to notify the employee that you won’t be paying a SRP in reliance on these statutory provisions.

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