Will I lose redundancy if I keep working?

I was being made redundant from my role a couple of years ago but then was approached and offered a secondment for a year and that I would still get my redundancy at the end of the contract. In 2020 my secondment was extended for another year and the same terms applied. My contract has now ended. I have had discussions with my line manager and they agreed that I would be made permanent and that I would still get my redundancy as part of my terms, but I have not seen any documentation for this. If I continue to work without receiving my new contract will I automatically be accepting the permanent position?

Employee Rights

 

I understand that your role was placed at risk of redundancy in 2019. As an alternative to redundancy, you were offered (and you accepted), a secondment for a year following which the company agreed to offer you a redundancy package. The secondment was renewed for a second one-year term under the same arrangement i.e that you would receive a redundancy package at the end of the term. The second term expired recently. You state that it has now been agreed that you will be made permanent. It is not clear whether you are being made permanent in relation to your secondment role or you are moving back to your previous role on a permanent basis. I assume that your reference to being made permanent is a reference to the secondment role. You would like to know whether you risk losing being offered a redundancy package if you accept the permanent role. Please note that I am unable to advise you fully as we do not know the background and have not seen the relevant documentation. However, the general position would be as follows:

Suitable alternative employment

Employment law generally requires employers to consider and offer suitable alternative employment to staff whose roles are potentially at risk of redundancy. Where an employee is offered but unreasonably rejects a suitable alternative role, they will forfeit their right to a statutory redundancy payment. Whether an employee’s refusal of a suitable job is reasonable depends on the subjective reasons the particular employee has for rejecting it. This covers factors relating to the employee’s personal circumstances such as their health as well as their personal and family commitments. In practice, the more suitable the offer, the easier it will be for the employer to show that the refusal was unreasonable.

In the circumstances, it is arguable that the secondment role was offered to you as an alternative to you being made redundant. Further, given that you worked in the role for two years, your employer could argue that the role is suitable and therefore, a redundancy situation does not arise. For this reason, a refusal to accept the role on a permanent basis could be deemed as unreasonable resulting in a forfeiture of your right to redundancy payment (unless you can prove that making the role permanent renders it unsuitable).

It is not clear whether your employer has categorically stated to you that they will not pay you the redundancy package they agreed with you. If they have, (and in the event that you decide to continue working on a permanent basis), it may be advisable for you to make it clear to your employer that you are working under protest and that you do not accept the new terms without the promised redundancy package. This would reduce any risk of you being deemed to have agreed to be made permanent without the redundancy package. The law in this area is complex and it would be advisable to take bespoke legal advice before making any decisions.

Breach of contract

In addition to the above, you could argue that your employer’s refusal to pay you the promised redundancy package amounts to a breach of contract, entitling you to resign and claim constructive unfair dismissal. You should follow your employer’s grievance procedure in seeking to formally resolve the matter before making the decision to resign. You should also ask them to provide you the agreement in writing to address any issues of uncertainty. Constructive dismissal claims are generally quite difficult for employees to win so it will be important for you to take legal advice before opting to go down this route.

I should also note that, depending on the amount of the redundancy package, it may be necessary to consider whether to issue a breach of contract claim in the employment tribunal or the civil courts. This is because the maximum payment that a tribunal can award for a breach of contract is currently £25,000 and therefore when an employee has a potential breach of contract claim for more than £25,000, proceedings should be issued in the civil courts.

*Albert Mould has assisted in this answer.



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