When is redundancy pay not payable?

Redundancy Period
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Peninsula Team, Peninsula Team

(Last updated )

The refusal of suitable alternative employment during redundancy removes the need to pay statutory redundancy pay; this cannot be restored post-dismissal if the employee changes their mind.

In Love v M.B. Farm Produce Ltd, the claimant was put at risk of redundancy because the farm shop they worked at was closing down. During consultation, the claimant was offered a vacant role at another farm shop that was also owned by the respondent.

The claimant turned the offer down. They stated they were not a confident driver and did not wish to work at the other farm shop, despite it actually being nearer to their home and confirmation from the respondent that they would receive reasonable mileage and fuel expenses.

Consequently, the respondent gave notice to the claimant of their redundancy and confirmed the legal position that, because they refused what the respondent considered to be suitable alternative employment, they were not entitled to receive a statutory redundancy payment.

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The claimant then indicated to the respondent that they wanted to take up the original offer of the alternative role. The respondent did not allow this because of the original refusal and did not pay redundancy pay.

The claimant made a claim for unfair dismissal and failure to pay a redundancy payment at employment tribunal (ET).

The ET found that the employee had been unfairly dismissed because they had not been permitted to undertake the trial period in the role at the other farm shop. Although the offer was first declined, that did not detract from the fact that the claimant had subsequently changed their mind.

However, the ET found that the claimant was still not entitled to a redundancy payment because it found that the role was a suitable alternative which had been unreasonably refused. It noted that the law did not cover what should happen if an employee originally refuses the alternative role but then changes their mind. The ET decided that once the claimant unreasonably refused the role, the entitlement to redundancy pay was lost.

For more information on redundancy, visit BrAInbox today where you can find answers to questions like Can I hire a replacement for a role that was made redundant?

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