Q: We want to keep an employee but in a different role and on slightly less money. Do we have to pay redundancy pay?
Jul 26 2010
Answered by: Peter Done Ask a question
Whether you have to pay redundancy pay or not in this situation depends on various factors.
Firstly, an employee must have two years’ service to become entitled to statutory redundancy pay. When an employee is made redundant, you should try and find him a suitable alternative role within your organisation and offer this to him before his notice of redundancy expires. You appear to have identified another role that you wish the employee to fulfil, and this could be offered to your redundant manager.
What is important with the identification of another role is that it is ‘suitable’ to the employee. What ‘suitable’ means is, ultimately, a matter for a tribunal to decide but factors to be considered are job content, job status and terms and conditions.
If the alternative role you have identified is suitable in relation to the employee and he unreasonably refuses the offer, then he will lose his entitlement to redundancy pay. If the employee accepts your offer, he is entitled to a statutory 4 week trial period in the new role.
If the employee leaves or gives notice within the trial period, you will need to pay him statutory redundancy pay if the job was unsuitable and/or he did not act unreasonably in leaving it.
If you dismiss the employee or give notice within the trial period, you will not need to pay redundancy pay as long as the dismissal was not for a reason connected with the fact that the employee was in the trial period.
Rules on suitable alternative roles and reasonableness are very complex and specialist advice should be taken regarding your specific situation.
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