To demonstrate that a redundancy was fair and lawful it’s important to be able to show that you have tried to avoid it. A key part of this is showing that you have taken reasonable steps to find alternative employment for employees at risk.
You should make sure employees at risk of redundancy are fully informed of any vacancies and are encouraged to apply for them. Don’t make assumptions that employees who would otherwise be made redundant wouldn’t be interested in roles that involve a pay cut, different hours or different responsibilities – you should at least give them the opportunity.
You don’t necessarily need to give redundant employees priority, it’s fine to conduct a selection process as you normally would, and find the most suitable employees for the vacant role.
If a role is different from the person’s original job, they are entitled to a trial period of up to four weeks, to establish whether the role is suitable. If it becomes clear the role isn’t suitable, the effective date for dismissal will be the date the original role came to an end.
If someone transfers into a new role, they are no longer entitled to a redundancy payment as their employment will not be ending. If they ‘unreasonably’ refuse a role which is a ‘suitable alternative’, they will not be entitled to redundancy pay, although their reason for dismissal will still be redundancy.
A role is a suitable alternative if it is on no less favourable terms and conditions, and is ‘suitable’ for the individual’s skills and experience (i.e. it doesn’t need to be the same as their previous role).
It also needs to be suitable for their personal circumstances. For example if you have a role that is suitable in terms of salary, status and skills required, but requires a long commute or very restrictive hours, it may be considered unreasonable for a single person with no commitments to refuse it, but refusal by a single mother with school aged children may be perfectly reasonable. A change to new premises with no public transport access might be unreasonable for someone who can drive to refuse, but for someone who cannot drive and has previously been able to catch a bus to their nearby workplace, it might be an entirely reasonable refusal.
For a role to be a suitable alternative it must be communicated to the employee before the end of their current role, and must start within four weeks of that termination. A role will not be suitable if it will be available in three months but is not available now.
If you have an employee who is on maternity leave, or other family leave, and their role is made redundant, and there is a suitable alternative vacancy available, that person must be offered it and must not be required to compete with others. This doesn’t mean you can’t make someone on maternity leave redundant, and if you are reducing headcount but keeping the same roles, they should be included in selection. But once their role is confirmed as redundant, you then need to look for suitable alternative vacant roles, and prioritise those individuals.
If you are concerned about whether a vacant role is a suitable alternative and whether someone can refuse it, do get in touch for some advice.