1. Introduction
The treatment of offers of suitable alternative employment in the redundancy context is a recurring source of dispute. The case of A Bartender v A Bar and Restaurant Owner (ADJ-00020568) is one of a number of decisions illustrating the WRC’s approach to this question. The framework draws on the English case of Cambridge & District Co-operative Society v Ruse [1993] IRLR 156.
This article addresses the framework for the assessment of offers of suitable alternative employment, the consequences of an unreasonable refusal by the employee, and the practical implications for both parties.
2. Legislation and Case Law
Section 7(2) of the Redundancy Payments Act 1967 defines redundancy. The provision identifies five circumstances in which a dismissal is by reason of redundancy: where the employer has ceased or intends to cease to carry on the business; where the employer’s requirements for employees to carry out work of a particular kind have ceased or diminished or are expected to cease or diminish; where the employer has decided to carry on the business with fewer employees; where the employer has decided that the work shall henceforth be done in a different manner for which the employee is not sufficiently qualified or trained; or where the employer has decided that the work shall henceforth be done by a person who is also capable of doing other work for which the employee is not qualified or trained.
Section 7(1) of the Redundancy Payments Act 1967 establishes the entitlement to a redundancy payment for an employee dismissed by reason of redundancy with at least two years’ continuous service. The entitlement is to a lump sum calculated under Section 7(2A): two weeks’ pay per year of service, plus one bonus week, subject to a weekly pay cap (currently €600).
Section 15 of the 1967 Act provides that an employee who unreasonably refuses an offer of suitable alternative employment by the employer is not entitled to a redundancy payment. The provision is intended to deter cherry-picking of dismissal as a means of obtaining the lump sum where reasonable alternative employment is available.
The Cambridge & District Co-operative Society v Ruse [1993] IRLR 156 test (and its adoption by Irish tribunals) addresses two distinct questions. First, was the offered alternative employment suitable (an objective test). Second, was the refusal unreasonable (a subjective test taking account of the employee’s circumstances).
The employer carries the burden on the first question (was the offered employment suitable). The employee’s evidence as to her circumstances and reasons for refusing carries weight on the second question (was the refusal unreasonable).
3. Decision
The Adjudication Officer in the Bartender case applied the two-stage framework. On suitability, the Adjudication Officer examined the offered alternative role and compared it with the original role on relevant dimensions: duties, pay, hours, location, and conditions.
On reasonableness of refusal, the Adjudication Officer examined the employee’s reasons for refusing. Family circumstances, geographic constraints, health conditions, and the impact on the employee’s career and personal life may all be relevant.
Where the Adjudication Officer finds that the alternative was suitable and the refusal was unreasonable, the redundancy payment is not payable. The employee’s refusal of the suitable alternative is treated as the cause of the dismissal, not the redundancy.
Where the Adjudication Officer finds that the alternative was not suitable, or that the refusal was reasonable, the redundancy payment is payable in the ordinary way. The employer’s offer does not displace the entitlement.
4. Takeaway
For employers, the practical importance of identifying and offering suitable alternatives cannot be overstated. A redundancy process that does not consider alternatives is, in general, procedurally defective. The offer of a suitable alternative may also reduce or eliminate the redundancy payment entitlement.
The alternative should be assessed against the original role on relevant dimensions. Where the alternative differs significantly in any dimension (pay, hours, location, duties), the employer should be prepared to address those differences and any practical impact on the employee.
For employees, the assessment of an offered alternative requires care. An unreasonable refusal of a suitable alternative may result in the loss of the redundancy payment. The employee should articulate her reasons for refusing clearly and with reference to her personal circumstances.
Practitioners advising employees should consider the parallel implications for unfair dismissal complaints. An employee whose redundancy has been challenged on Section 6(4)(c) grounds may still succeed in the unfair dismissal complaint even where the redundancy payment is not recoverable.
5. Further information
This article was prepared for informational purposes only. For further advice, please email enquiries@crushell.ie or contact the offices of Crushell & Co Solicitors.
6. About Crushell & Co
Crushell & Co is a specialist law firm focused on protecting and advancing the rights of employees in Ireland. We offer a nationwide service, advising individuals on a wide range of legal and regulatory issues arising at work, including employment law, employment immigration and workplace accidents and injuries.
We help employees understand their position and options by translating complex legal issues into clear, practical advice. Our approach is tailored to each client, ensuring that our strategy is aligned with their personal and professional circumstances.
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