Dunne v Colin & Avril Ltd (t/a Card Outlet) (Redundancy: Suitable alternative employment)

Under section 141 of the Employment Rights Act 1996, entitlement to a redundancy payment requires a two-stage inquiry. The tribunal must decide objectively whether alternative employment was suitable and, if it was, decide subjectively whether the employee’s refusal was unreasonable. The employer bears the burden on both issues.

A reason for refusal is not excluded merely because the employee did not communicate it before dismissal. It must be considered when assessing whether the employer has proved unreasonable refusal. A conclusion that an employee is disentitled to a redundancy payment does not, without more, determine whether the redundancy dismissal was fair under section 98(4).

The Claimant, a book-keeper employed for 24 hours each week, was dismissed in a redundancy situation after declining an offer to retain 16 hours of book-keeping work and undertake eight hours of warehouse-related work at the same pay.

The Wrexham Employment Tribunal dismissed her claims for a redundancy payment and unfair dismissal. It held that the alternative role was suitable, that her refusal was unreasonable, and that the dismissal was fair.

On appeal, the Claimant contended that the Tribunal had conflated suitability with unreasonable refusal and had wrongly treated the redundancy-payment conclusion as determinative of fairness. The central issue was whether the statutory questions had been separately and lawfully determined.

1. Appeal allowed. The questions of entitlement to a redundancy payment and unfair dismissal were remitted to a fresh Employment Tribunal.

2. Section 141 of the Employment Rights Act 1996 requires two distinct inquiries. First, the tribunal decides objectively whether the alternative employment was suitable. Secondly, if it was suitable, the tribunal decides whether this employee’s refusal was unreasonable. The employer bears the burden of proving both matters.

3. The Employment Tribunal did not clearly direct itself to that distinction. Its conclusion that the offered work was suitable did not make it inevitable that the Claimant’s refusal was unreasonable. The latter inquiry required an assessment of her own reasons for refusing the offer.

4. The Tribunal also erred in treating the Claimant’s failure to raise, before dismissal, the effect of the cold warehouse environment on her medical condition as preventing reliance on that reason. The subsequent explanation in her claim, witness statement and evidence could not simply be disregarded when deciding whether refusal was unreasonable.

5. Even a proper finding that an employee unreasonably refused suitable alternative employment would not necessarily establish that dismissal was fair under section 98(4). Since the section 141 issues required reconsideration, the separate fairness issue also had to be reconsidered in light of the fresh Tribunal’s findings.

6. The Appeal Tribunal declined to substitute findings. The issues were fact-sensitive and were remitted, by agreement, to a fresh Tribunal.

• Employment Appeal Tribunal: Appeal allowed and the claims remitted to a fresh Employment Tribunal.
• Employment Tribunal, Wrexham: On 17 June 2016, with reasons promulgated on 23 June 2016, dismissed the claims for unfair dismissal and a redundancy payment.