‘Reasonable Alternative Employment’: salary reduction limit?

[BrunchBarBandit]

Hi, my friends company is restructuring and aiming to reduce workforce by about 10% of about 500 employees. The documents imply that posts 2 grades lower will be considered as ‘suitable alternative employment’. For my friend this would mean a £30k pay cut (about one third of his pay) and there would be no redundancy payable if he declined as it has been deemed a suitable alternative.

Is there a guideline, or point of employment law, or any precedent that anyone is aware of for salary reduction in this scenario. Surely this can’t be an acceptable offer? He has tried to google this but can’t find anything definitive. The company policy has recently been changed but this point is not covered.

There is pay protection at the original grade but only for 1 year.

Grateful to hear of anyone with knowledge or experience of this. Thanks

The terms of the new position, including salary and benefits, should be comparable including employee’s current compensation. A significant reduction in pay or benefits can make a role unsuitable. I think he would be advised to get some legal advice. It sounds like he should be able to get his statutory redundancy

There is no fixed amount but any offer needs to be 'reasonable', including in terms of any reduction in salary. It's extremely unlikely that a 1/3rd reduction would be seen as reasonable by a tribunal. There is a set process for rejecting the offered role and it's very important he follows it. He can find good info on the ACAS website on this.

his employer are at it, there’s no way a reduction in 30% of pay would forfeit his right to redundancy pay if he didn’t take it.

What they might do though is pay him statutory redundancy if he doesn’t take it but say he’s forfeited his right to enhanced pay. Tell him to talk to ACAS or if he earns £90k a year presumably he can afford to pay a lawyer

Yes, thanks for this. Definitely needs legal advice.