Disentitlement to a Redundancy Payment – A Recap

by Siobhan Lafferty, Lawyer in the Employment Department, McDowell Purcell

A recent case in the Labour Court made a decision considering the issue of entitlement – or rather disentitlement – to a redundancy payment where an employee has been offered alternative employment which the employee subsequently refuses. In this case, the Respondent employer was successful in appealing the decision of the Adjudication Officer to award the employee a redundancy payment in accordance with the Redundancy Payments Acts 1967 – 2014 (the “Acts”).

In this case (Cinders Limited v Celina Byrne Determination No.RPD1811), the Respondent sells ladies footwear through a mixture of concessions and stand-alone stores, and the Complainant had worked in one of the stand-alone stores which the Respondent eventually decided to close down due to declining sales. The Complainant was subsequently offered different alternatives to redundancy – either moving to one of two places where there was a concession arrangement in place, or to move to another store in Wicklow Street in Dublin. The Complainant refused the concession arrangements as those would have been very different to her work in a store, but neither did she accept the role in Wicklow Street on the basis that she felt it would shut down soon too.

The Labour Court considered section 15 of the Acts, which outlines that an employee shall not be entitled to a redundancy payment where an employee is made an offer which “constitutes an offer of suitable employment to the employee” and the employee has subsequently “unreasonably” refused that offer. The Labour Court also considered there were two issues – firstly, whether the suitability of the offers which were made by the Respondent and secondly, whether the Complainant’s decision to reject those offers were reasonable in all the circumstances. It was highlighted that “the suitability of the employment is an objective matter, whereas the reasonableness of the employee’s refusal depends on factors personal to him and is a subjective matter to be considered from the employee’s point of view.

It was held that the offers were suitable from an objective point of view, however, that it was reasonable for the Complainant to reject the offers to the concession stands on the basis that this was quite a different environment and change for her. However, they found that the refusal to work in Wicklow Street was unreasonable, as there was no good reason for her to decide that the Wicklow Store would inevitably cease trading. As a result, she was disentitled to her redundancy payment and the adjudication officer’s decision was set aside.

Whilst in this case the Respondent won the appeal, it is a reminder to employers offering alternative employment during a redundancy process of the fact that an employee’s refusal will have to be considered from the employee’s point of view – rather than what the employer would consider as being objectively reasonable.

About the author
Siobhán is a lawyer in the Employment Department at McDowell Purcell, and regularly advises both corporate client employers as well as employees. Siobhán has extensive experience in advising on all aspects of employment law and has advised on a range of issues from redundancies to discrimination complaints. She also has experience in working on contentious matters across the UK and Ireland, including High Court proceedings.