Why considering alternative employment is more than a legal obligation

The pressures of today’s fast-evolving business landscape often lead to the difficult decision to make roles redundant. But amid cost-cutting and restructuring, one critical legal and moral duty is often overlooked: the obligation to seriously consider suitable alternative employment for affected employees.

The case of Hendy Group Ltd v Daniel Kennedy [2024] EAT 106 is a compelling reminder to employers that the duty to consider alternative employment in redundancy situations must be more than a passive gesture - it must be proactive and meaningful.

Case summary

Mr. Kennedy, a long-serving employee with over 30 years in the motor trade, had transitioned into a training role he valued for its stability and hours. When redundancy loomed during the pandemic, he accepted the legitimacy of the situation and his selection. However, his claim centred on the employer’s failure to genuinely explore alternative roles within the company. The Employment Appeal Tribunal upheld the original tribunal’s decision that the dismissal was unfair because Hendy Group had essentially left Mr. Kennedy to fend for himself. He was told to check the intranet like any external applicant, received no tailored support from HR, and was even cut off from internal systems before his dismissal date. Despite multiple vacancies in sales - roles he was well-qualified for - he was not actively encouraged or assisted in applying.

The judgment reinforces that employers must go beyond simply listing vacancies. They must engage with the employee, assess suitability, and offer real support. The tribunal also declined to apply a Polkey reduction, finding that the procedural failings directly led to the loss of opportunity for redeployment.

What counts as 'suitable'?

Not every role will be appropriate for every employee, but it’s the employer’s responsibility to assess:

• Skills and qualifications – does the role match the individual's existing capabilities?
• Pay and status – is the salary comparable? Does the new position involve a significant demotion?
• Location and hours – will the move require unreasonable commuting or shift changes?

Importantly, any offer must be made in good faith and with full disclosure. Engage early, communicate options clearly, and provide employees time to consider. If a suitable alternative is declined unreasonably, it may affect their right to redundancy pay - but that assessment must be handled delicately, and with professional advice.

Beyond legal obligations, offering alternative roles can lead to talent retention, greater loyalty among remaining staff, and reduced disruption. In a competitive job market, the reputational cost of being seen as an unsupportive employer is too high.

Key legal takeaways

The law on this issue is clear - before finalising redundancies, employers must explore alternatives as a core part of a fair dismissal process. Failure to do so can expose employers to unfair dismissal claims, tribunals, and reputational damage.

Remember:

1. Employers must do more than provide a list of vacancies—there’s a duty to actively engage with affected employees and help them identify and apply for suitable alternative roles.

2. A fair redundancy process includes meaningful support from HR or management. Merely pointing employees to internal job listings without assistance can render the process unfair.
3. Cutting off access to internal systems before the dismissal takes effect can impede an employee’s ability to seek redeployment, further undermining fairness.
4. Employers must assess alternative roles for suitability based on the employee’s skills, experience, and preferences - not assume disinterest or ineligibility.
5. The EAT declined to apply a Polkey reduction in Hendy Group Ltd v Daniel Kennedy (which limits compensation where dismissal would have occurred anyway), stressing that the flawed process directly caused the dismissal.

Final thoughts

The Hendy Group Ltd v Daniel Kennedy case sends a clear message: redundancy processes must prioritise fairness, transparency, and sincere efforts to retain talent. It’s a call to action for HR and managers to revisit internal protocols and ensure employees are treated not as numbers, but as people.