Suitable alternative employment

By Tolley in association with Jessica Shemmings at Charles Russell Speechlys LLP

The following Employment Tax guidance note by Tolley in association with Jessica Shemmings at Charles Russell Speechlys LLP provides comprehensive and up to date tax information covering:

  • Suitable alternative employment
  • Introduction
  • What constitutes ‘suitable’?
  • Suitability and unreasonable refusal
  • Unreasonable refusal of alternative employment
  • Trial period


The question of suitable alternative employment arises when an employee who has been made redundant is offered, before his original contract comes to an end, a renewed or new contract for employment by the same employer or an associated employer but on different terms and conditions, starting within four weeks of his dismissal.

ERA 1996, ss 146, 231

If an employee accepts the offer of employment on different terms and conditions, the question of its suitability never arises. He is simply considered not to have been dismissed by reason of redundancy and so is not entitled to a statutory redundancy payment. If the employee has been in the group of affected employees in a collective redundancy situation, the employer’s obligations towards him regarding information, consultation and time off to look for other work are unchanged up to the time he accepts the alternative employment offer.

ERA 1996, s 141(3)(a)

Employees cannot maintain their rights to redundancy payments simply by refusing any alternative work that is offered to them. An employee cannot unreasonably turn down alternative work if it:

  • is suitable
  • was offered before the end of the previous employment
  • starts four weeks or less after the end of the previous employment

ERA 1996, s 141

If he does refuse the offer of suitable alternative work, he loses his entitlement to the redundancy payment. The same applies if the new employment is on the same terms and conditions, although the question of suitability will not arise, only the question of whether a refusal was unreasonable.

ERA 1996, s 141(3)(a)

Should the dispute reach the Employment Tribunal system, it is for the employer to show that the alternative employment offered was suitable. An adequate assessment of

More on Redundancy and reorganisation: