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Redundancy Payments - Refusing an Offer of Suitable Alternative Employment

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An otherwise redundant employee who unreasonably refuses an offer of suitable alternative employment will not be entitled to a redundancy payment. In Dunne v Colin and Avril Ltd, Mrs Dunne worked for her previous employer for more than 12 years as a book-keeper. She was then transferred to a new employer which took over when her old employer became insolvent. She was employed on the basis of a 24-hour week but the new employer felt that it could only offer her 16 hours. This was not acceptable to her and the new employer offered her a further 8 hours a week working in the warehouse. When she refused, this offer she was dismissed and the employer refused to give her a redundancy payment.

The employment tribunal held that she had unreasonably refused the offer of suitable alternative employment and also concluded that her dismissal was fair.

On appeal, however, the EAT held that the tribunal had assumed that because the alternative work was suitable, it followed that her refusal to accept it was unreasonable. Furthermore, the tribunal had assumed that Mrs Dunne could not rely on her health as a reason for refusing the alternative work – she had leukaemia and felt that she would be adversely affected by working in a cold warehouse – because she had simply told the employer that the warehouse work was inconsistent with her skills and experience.

The proper approach, however, was to require the employer to show not just that the offer was suitable, but that the employee’s refusal of that offer was unreasonable. All circumstances had to be taken into account – not just the reason for refusal given to the employer when the role was offered.

Since the tribunal had taken the wrong approach in deciding whether Mrs Dunne was entitled to a redundancy payment, it followed that both that issue – and the question of whether or not her dismissal was fair – should be reconsidered by a fresh employment tribunal.

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