Constructive Dismissal/Redundancy

18 October 2007

Where an employee faced with redundancy is offered an alternative post for a trial period, they have only a month within which to make up their mind whether the alternative post is acceptable or not.

In Optical Express v Williams the employee was told that she was redundant but offered an alternative post for a trial period.

She tried the alternative post although she thought it was unsuitable and that imposing it was a repudiatory breach of contract. However it took her 6 weeks to tell her employers so. She then resigned.

She argued that under common law she had not lost her right to claim constructive dismissal.

The EAT has said that, in such a case, common law does not apply. S. 138 of the Employment Rights Act (ERA) sets out exactly what the employer and employee must do when the employee is offered a trial period in a new post as an alternative to redundancy. Under that scheme, if she has not decided to leave within 4 weeks she cannot later claim redundancy or unfair dismissal.

Points to note:

  • Under s.138(3)(b)(ii) the 4 week statutory trial period can only be extended by agreement between the parties ‘for the purpose of retraining’. Although employer and employee may agree to extend the trial period for other purposes, if they do so and the employee remains employed beyond the four week period, they will still have lost their right to claim redundancy or unfair dismissal.

  • The time for an employee threatened with redundancy to complain about the suitability of any other post that may be suggested to them as an alternative is either immediately when the offer is made (if they consider that the post offered is no true alternative) or, if they agree to a trial period, within the four weeks allowed by s.138.