dismissal and suitable alternative employment

Rail companies have announced proposals to close hundreds of ticket offices across England and Wales over the next three years, potentially creating redundancies. Could offering alternative roles provide a way to avoid layoffs?

When does a situation of dismissal arise and what are the obligations of the employer?

Dismissal is one of a limited number of potentially fair reasons for an employer to dismiss an employee. A surplus situation can occur in three types of situations:

• if the company closes or intends to close all or some of its business operations;
• where a specific workplace is closed; and
• where there are reduced requirements for employees to perform a particular type of work

The rail industry’s proposals therefore fall under the definition of a surplus situation, as there is a reduced need for employees to perform a particular type of work, and it makes business sense that change is necessary to modernize the railways and meet customer demands. According to the Rail Delivery Group (RDG), only 12% of tickets were sold at the box office in 2022, with the rest purchased online or from machines.

It will be interesting to see how the ticket office offers progress. Rail companies must consult with London Travelwatch and Transport Focus and give passengers the opportunity to have their say on the proposals. As a result, a public consultation on the proposals took place and the consultation window closed on 1 September 2023. It is reported that 680,000 people responded to the consultation. In the coming weeks, the train operators’ proposals and responses to the public consultation will be analyzed by Transport Focus and London Travelwatch, who will then respond to the train operators and publish the responses online, along with the key questions raised in the consultation, until 31 October 2023.

If rail operators are allowed to stick with the current offer, it is not enough for a genuine redundancy situation to avoid unfair dismissal claims. For redundancy to be fair, the employer must also act reasonably, which in practice means following a fair process. In addition, where the proposals are likely to result in 20 or more redundancies within 90 days, collective consultation obligations must be met.

In general, to ensure a fair process, at a minimum, employers must notify and consult with potentially affected employees or their representatives; adopt a fair basis for selection for layoffs, which means ensuring that the selection process for layoffs and the pool of employees from which the selection is made are fair and non-discriminatory; and seek suitable alternative employment within their organization and, if available, offer it to any employees pre-selected for redundancy.

Eligible alternative employment in case of redundancy

As stated above, employers should consider whether there are suitable alternative jobs to offer those at risk of redundancy. Failure to seek or offer such affordable alternatives may result in successful unfair dismissal claims against the employer.

It is important that employers proactively seek and offer alternative employment, rather than simply waiting for employees to search for jobs themselves, or to guess which jobs an employee will find suitable. This usually involves sharing job listings with potential hires as part of a consultation process. Employers should also remember that the duty to consider and offer alternative employment exists throughout the organization and not just in one particular part of the business. However, the duty is to find suitable alternative work and does not extend to creating roles that do not exist.

Under the rail industry’s current proposals, some ticket offices would remain open at the busiest stations, but at other stations ticket offices would be closed and staff would be offered a new and more flexible role as a mobile customer service member. It is assumed that these colleagues will be present in the hall, helping passengers with their journeys and selling tickets.

It is likely that rail companies believe that these mobile customer service functions will be suitable alternative roles, allowing the redeployment of affected employees and reducing redundancies. However, more detailed information on how the mobile group will work has not yet been announced. Without these additional details, it is difficult to determine whether these new roles will actually be suitable alternative work or just alternative work. The distinction is important because it is only where an employee unreasonably refuses a relevant alternative role that their entitlement to redundancy pay is affected.

If an alternative role is offered on the same terms as the employee’s redundant role, it is likely to be considered suitable. Where an alternative role is performed on different terms, the question of suitability arises. Factors that may be taken into account when determining whether a role is a suitable alternative include: hours of work in the new role, location of work, pay, status and career prospects, and the extent to which they different from the employee’s current role.

If a suitable alternative role exists but the terms and conditions are different from those the affected employee currently has, even if the new terms are better, the employee is entitled to a four-week trial period to decide whether to accept the new job.

It is important to remember that there are individuals who have priority rights, which means that employers must offer them a suitable alternative job if one is available, and they must offer it before other employees who are at risk of being made redundant. Those on maternity leave, parental leave, child care leave and adoption leave have these rights. These rights have been extended under the Protection from Retrenchment (Maternity and Family Leave) Act to cover these employees not only during leave, but also for the period from the time the employer is notified of the pregnancy up to 6 months after the end of the maternity leave and birth or adoption. However, in order to come into force, the Act requires the enactment of by-laws that approve the specific details of the expanded law. Employers will need to pay attention to these enforcement rules and keep the extended right in mind when considering future layoff plans.

Top tips for overkill

Managing the redundancy process is difficult for any company, but we’ve included some top tips below to help employers.

1. Make sure there is a valid redundancy situation – Employers must ensure that the redundancy situation is valid and that it falls under one of the three redundancy situations mentioned above. Using redundancy as a reason to fire, say, a bad employee to avoid a lengthy performance management process is likely to be unfair.
2. Effective preparation is about making sure everything goes as smoothly as possible. Preparing a clear business case for the proposed change, along with a question-and-answer sheet, will help managers prepare for the first consultation meetings and help reduce the uncertainty that is common for those affected by a layoff proposal.
3. Conduct a meaningful consultation process – Employers should give employees as much advance notice of proposals as possible and consider and respond to any questions raised during the consultation process before final decisions are made. It is also good practice to document the process in case of a dispute later.
4. Fair selection criteria – Employers must fairly select employees for dismissal. Criteria should be based on measurable facts, not personal opinions. Some criteria are automatically unfair, and you should not choose an employee to fire for reasons such as: pregnancy, parental leave, dependent leave, and union membership or non-union membership.