The duty to search for alternative employment
DUTY TO SEARCH
If you fail to search for alternative employment as part of your redundancy procedure, an employee’s subsequent redundancy dismissal is likely to be unfair. Your duty is to make reasonable efforts to look for alternative employment.
Pro advice 1. Your search should be sufficiently thorough, but there’s no obligation to make every possible effort to look for alternative employment, nor to actually create alternative employment for the potentially redundant employee where none exists.
Pro advice 2. Document what steps you’ve taken as part of your search, e.g. who you’ve approached, what replies you’ve received, etc. and keep copies of any relevant e-mails or other documentation.
Pro advice 3. Start your search as soon as you’ve identified that employees are at risk of redundancy. That way, you can advise them of alternative vacancies on an ongoing basis throughout the redundancy consultation process.
If your organisation forms part of a group of companies, ideally you should look throughout the whole group for vacancies, and this is particularly so if you have the ability to exercise control over those other companies, or where the group has a central HR function where information about group vacancies is regularly shared.
DURATION OF SEARCH
The fairness of a redundancy dismissal is assessed not only at the date on which you give notice of termination of employment to the employee (see Follow up ) but also when their employment actually terminates. This means you need to continue to search for alternative employment right until the date on which their dismissal takes effect.
Pro advice 1. To save going back to the same managers several times, advise them at the outset to let you know not just about current vacancies but also to revert to you if any new vacancies arise over, say, the next three months - make this period long enough to adequately cover the employee’s full notice period. Then do a final chaser e-mail to everyone before the employee’s notice period ends.
Pro advice 2. If you’ve paid the employee in lieu of notice, their dismissal takes effect at an earlier date and you don’t have to continue searching for alternative employment during what would have been their notice period.
Pro advice 3. If there’s a change of business circumstances during the employee’s notice period such that, rather than alternative employment becoming available, their current role is no longer redundant, you can ask if they’re willing to agree to withdrawal of the redundancy notice (see Follow up ). Be aware that you can’t unilaterally withdraw the notice.
If the alternative employment arises at a late stage and the employee applies for it close to their termination date, you don’t have to delay their termination date to complete the recruitment process. Their dismissal can still take effect, but you should continue to process their application for the alternative employment. In this case, the employee will remain entitled to a statutory redundancy payment (SRP) in the normal way, as they’ve still been dismissed for redundancy.
Pro advice 1. If the employee’s application is successful and they’re subsequently re-employed, receipt of the SRP will break continuity of employment in relation to future SRP claims.
Pro advice 2. If there’s a good chance the employee’s application will be successful, you might wish to agree with them an extension to their notice period to allow for the recruitment process to be completed.
VACANCY INFORMATION
You must provide the employee with sufficient information about any vacancies so that they can take an informed view on whether the role is suitable for them.
Pro advice 1. Do consider the employee for lower paid and lower level jobs too, as well as jobs in other geographical locations - it’s really for them to decide what they’re willing to accept to avoid being made redundant and so don’t just assume they wouldn’t be interested, unless they’ve specifically made it clear that they aren’t prepared to consider certain types of role, e.g. those with reduced salary or status, part-time roles or those in distant locations.
Pro advice 2. The best way to provide this information is to supply the employee with the written job description and person specification for the role. Also provide details of the salary and benefits structure.
Pro advice 3. Keep a record of any information you’ve supplied and any discussions you’ve had with the employee regarding alternative employment.
Pro advice 4. Give the employee a reasonable opportunity to consider and apply for the alternative employment. They may need to assess their financial position or explore whether relocation is feasible.
MULTIPLE REDUNDANCIES
If there’s more than one potentially redundant employee, ensure they’re all made aware of any alternative vacancies. You’ll also need to think about how you’re going to choose which employees will be offered each vacancy.
Pro advice 1. One option is to undertake a competitive interview process and then appoint the employee you consider to be best for the role. You’re not under a duty here to carry out an exercise using objective selection criteria in the same manner as when you initially decided who to select for redundancy, Morgan v The Welsh Rugby Union 2011 (see Follow up ). Just be careful to ensure that appointments aren’t made due to favouritism and that your interview process is fair.
Pro advice 2. Another option is to use a selection matrix, but only include criteria that are relevant to the new role.
Pro advice 3. If any of the potentially redundant employees are on maternity, adoption or shared parental leave, they have an automatic right to be offered any suitable alternative vacancy in priority to other employees who are also at risk of redundancy (yr.1, iss.1, pg. 10, see Follow up ).
CHOICE OF CANDIDATE
If an alternative vacancy has already been advertised externally, or internally to the wider workforce, it’s preferable if you can make the appointment from the pool of potentially redundant employees. That said, as you’re entitled to appoint the candidate that you believe to be best for the role, it might well be the case that an external candidate, or an internal candidate who’s not at risk of redundancy, is appointed in preference to a potentially redundant employee. You have the final say on whether to offer an available alternative vacancy to a potentially redundant employee.
Pro advice. If this happens, make sure your interview notes accurately reflect why the employee wasn’t successful in their application and ideally tie this in to the job description and person specification.
TRIAL PERIOD
Where alternative employment is offered, it should be subject to a statutory trial period of four calendar weeks if the terms of the new employment differ in any respect from the employee’s existing terms (see Follow up ).
Pro advice 1. The purpose of the trial period is for both parties to assess the suitability of the alternative employment for the employee and it starts when the employee’s employment under their current contract ends.
Pro advice 2. The four-week period may be extended by agreement between the parties where this is for the purpose of retraining the employee in the alternative employment.
Pro advice 3. If the trial is successful, employment continues and there’s no dismissal for SRP purposes.
Pro advice 4. If the trial is unsuccessful for either party, the employee is regarded as dismissed for SRP purposes on the date when their original employment contract ended. However, they may not qualify for an SRP if they’ve unreasonably refused an offer of, or unreasonably terminated, “suitable” alternative employment.
The statutory provisions here are complicated and further discussion of trial periods, and what amounts to an unreasonable refusal of suitable alternative employment to escape your liability to make an SRP, is outside the remit of this article.
Redundancy termination notice
Letter withdrawing redundancy notice due to change of circumstances
Morgan v The Welsh Rugby Union 2011
Previous article on maternity leave and suitable alternative work on redundancy
Offer of alternative work
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