Refusing an offer of suitable alternative employment

In this month’s Enews we consider whether an employee acted reasonably in refusing an offer of ‘suitable alternative employment’; whether a failure to properly deal with an employee’s grievance amounted to a breach of the implied term of trust and confidence and we also look at the government response to the TUPE consultation.

Is an employee acting reasonably in refusing an offer of suitable alternative employment?

Background

Under the Employment Rights Act 1996, a potentially redundant employee will lose their right to a statutory redundancy payment if they unreasonably refuse an offer of suitable alternative employment. It is a two-fold test; whether alternative employment is suitable is objective, and whether an employee behaves reasonably in refusing the offer is subjective.

Facts

This was considered in the case of Devon Primary Care Trust -v- Readman. The Claimant, Mrs Readman was employed by Devon Primary Care Trust (“the Trust”). In 1985 she began working within community nursing. Following several promotions she became a community matron. In 2007 Mrs Readman was warned that she was at risk of redundancy. She applied for one role (a band 8A professional lead role) but was unsuccessful. She was subsequently offered the role of modern matron at Teignmouth Hospital, which was also a band 8A role. Her responsibilities under this role would include managing senior management, carrying out the role of modern matron at the hospital and working as a team/clinical leader. Therefore, the only difference between the hospital and community posts was that, in the former, 45% of her duties would be as a hospital matron rather than as a community matron. Mrs Readman rejected the modern matron role on the basis that her qualifications and experience were orientated towards community rather than hospital nursing and she did not now wish to work in a hospital setting. The Trust refused to pay Mrs Readman her redundancy pay.

Mrs Readman brought a claim in the Employment Tribunal. It found that the offer did constitute suitable alternative employment. It found that Mrs Readman had unreasonably refused the offer of employment and that “a reasonable employee” would have accepted the alternative role. Mrs Readman appealed to the Employment Appeal Tribunal (EAT).

The EAT found that the Tribunal should have addressed the core issue, which was whether Mrs Readman’s rationale for refusing the offer “constituted a sound and justifiable reason for turning down the offer”. The EAT concluded that Mrs Readman’s decision to refuse the modern matron role was within the band of reasonable responses open to her, and that the conclusions reached by the Tribunal were “plainly and unarguably wrong”. The Trust appealed to the Court of Appeal (CoA). The CoA commented that the Tribunal had erred in finding that Mrs Readman’s refusal had been unreasonable and that the “analysis conducted by the Tribunal had been so inadequate as to amount to an error of law”.

The CoA held it that it was incorrect to apply the ‘range of reasonable responses’ test found in unfair dismissal cases. However, having reviewed the case it was unable to say that the Tribunal’s decision had been ‘wrong’, and therefore remitted the case back to the Employment Tribunal for reconsideration.

What this means in practice…

The CoA was clear that the question of whether an employee can be said to have unreasonably refused an offer of suitable alternative employment, will depend on the circumstances of that particular employee and much will turn on the individual’s personal circumstances and the weight that they attach to the factors involved in the decision making process.

In reality this decision could bite where an employee reasonably refuses an offer of suitable alternative employment, based on their own personal circumstances, thereby benefitting from any redundancy payment to which they are entitled.

Employers are therefore advised to carefully consider the individual circumstances of affected employees when proposing suitable alternative employment.

Whether the failure to deal with a grievance amounts to a breach of the implied term of trust and confidence.

A breach of the implied term of trust and confidence may amount to a repudiatory breach, if it is so serious that an employee can resign in response and claim constructive dismissal.

In the case of Blackburn -v- Aldi Stores Limited, the Claimant, Mr Blackburn, worked for Aldi Stores Limited (“Aldi”) as an LGV driver from 2006. He submitted a grievance in 2009 based on health and safety concerns, lack of training and his treatment by the deputy transport manager who had allegedly sworn at him. Aldi’s grievance procedure provided that grievances were to be dealt with by the section manager, and appeals were to be dealt with by the next level of management. The grievance was investigated and partially upheld by the regional managing director (“H”) as no section manager was available. Mr Blackburn appealed the decision and copied it to the group managing director. H also dealt with the appeal in a meeting lasting 20 minutes. He rejected Mr Blackburn’s appeal and Mr Blackburn subsequently resigned a few days later claiming constructive dismissal, citing Aldi’s failure to allow him an appeal. Mr Blackburn brought a claim in the Employment Tribunal.

The Tribunal held that there was no breach of the implied term of trust and confidence and therefore Mr Blackburn appealed to the EAT.

The EAT allowed the appeal and remitted the case back to the Employment Tribunal, holding that a failure to adhere to a grievance procedure is capable of amounting to or contributing to a breach of the implied term of trust and confidence. Specifically in this case, the EAT criticised Aldi’s failure to provide an impartial grievance process.

It added that a right to an appeal in relation to a grievance was a feature of both Aldi’s own grievance procedure and the Acas Code of Practice, which provides that where possible an appeal should be dealt with by an individual who has ‘not previously been involved in the case’.

What this means in practice…

Whilst not all breaches of an employer’s grievance procedure will amount to a breach of the term of mutual trust and confidence, some breaches will obviously be more serious than others. This case serves to reinforce the principle that grievances, and indeed all company procedures should be adhered to as tightly as possible in order to avoid these types of claim.

In the News….

TUPE Government response to consultation

The Government has recently published its response to the consultation on proposed changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).

The response to the consultation can be summarised by highlighting some of the changes that are being made:

1. Changes to the workforce’s location following a transfer can amount to an economic, technical or organisational reason entailing changes in the workforce.

2. For a TUPE service provision change, the activities carried on after the service provision change must be “fundamentally or essentially the same” as those carried on before it.

What is staying the same and not changing:

1. Regulation 3(1)(b) of TUPE, which provides that there is a transfer where there is a service provision change.

2. The obligation on transferors to provide employee liability information (although the time limit for doing so is increased to 28 days rather than the current 14).

Alexandra Gess
E: alexandra.gess@rlb-law.com
T: 020 7227 6700

September 2013
© RadcliffesLeBrasseur


Disclaimer

This briefing is for guidance purposes only. RadcliffesLeBrasseur accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.