Redundancy payments

Q: Our employer has told four employees that their jobs are to be made redundant, but says there are two jobs still available that they can apply for. If they do not apply for them, are they still entitled to redundancy payments?

A: Under section 141 of the Employment Rights Act 1996, an employee loses the right to a statutory redundancy payment if s/he unreasonably refuses an offer of suitable alternative work.

However, if no offer of alternative work has actually been made, the employer cannot use section 141 to deny the employee his/her right to a redundancy payment. The offer must be made before the existing employment ends, and it is up to the employer to prove that an offer has been made.

In the case of Simpson v Dickinson [1972] ICR 474, the employer did not offer the employee alternative work because she had said she would not accept it even if it were offered. The National Industrial Relations Court held that she was still entitled to a redundancy payment, as no offer had been made.