The concept of statutory redundancy payments has been with us for nearly 70 years. However, the recent case of Love v M.B. Farm Produce Limited (ET 234946/2022) shows that the law still gives rise to novel questions and practical issues, here in connection with an indecisive employee.
The Respondent employer ran a farm shop with two branches in Faversham and Stockbury. It determined that the Faversham branch where the Claimant worked was no longer viable and needed to close.
The Claimant was considered a good worker and had been with the business for seven years. This entitled her to unfair dismissal protections and (in principle) a statutory payment if she was made redundant.
The Respondent was keen to retain the Claimant. Although she had been selected for redundancy, she was offered a trial of a role in Stockbury.
Its proposal engaged section 141 of the Employment Rights Act 1996, which applies when an offer:
- is made to an employee prior to the end of their employment;
- to renew their contract or re-engage them under a new contract; and
- that renewal or re-engagement is to take effect on or no more than four weeks after the end of their employment.
If the employer offers a suitable alternative role, which the individual unreasonably refuses, they lose their entitlement to a statutory redundancy payment. The Respondent specifically warned of that possibility here.
An employee might refuse a role for a variety of reasons based on their personal circumstances. In the present case, the Claimant was an anxious driver and was very reluctant to diverge from her regular commute. The Respondent observed that the commute would actually be shorter than her existing route and offered to pay reasonable mileage and fuel expenses. Nevertheless, the Claimant replied in writing to say that she would not take the alternative role and to ask for a redundancy payment.
The Respondent replied that the Claimant was unreasonably refusing a suitable role and was not entitled to a statutory redundancy payment. The Claimant appeared to change her mind about the role as a result. At that time, the Stockbury role remained vacant. However, the Respondent held its position and treated the Claimant as dismissed.
Perhaps surprisingly, section 141 of the 1996 Act does not address the implications of an employee refusing an offer of alternative employment and then changing their mind; nor does it seem to have been examined before. Although not a binding precedent, the Tribunal found that if an individual does unreasonably refuse a suitable alternative role, they cannot then change their mind and retrieve their right to a statutory redundancy payment.
On the face of it, the Tribunal’s interpretation provides a potentially welcome degree of certainty for employers. However, that is not the end of the matter: unfair dismissal must also be considered. Importantly, whether a dismissal is fair is to be judged at the point when employment ends, even if an individual is working their notice period.
In Love, when the Claimant declared her interest in the trial period – albeit too late in the Respondent’s view – the Stockbury role was still unfilled. She was still an employee with seven years’ service who had performed well. In those circumstances, dismissing her was not reasonable or fair.
The decision demonstrates how much care and – perhaps most importantly – patience must be exercised when conducting redundancy processes. While the Tribunal affirmed the Respondent’s approach to the statutory redundancy issue for the most part, it is vital not to confuse those complexities with the general question of fairness of the dismissal.