When Does a Trial Period Affect Redundancy Pay?

In UK redundancy law, a trial period is a statutory safeguard that allows employees to test suitable alternative employment offered during redundancy. It is designed to ensure that employees are not unfairly forced into unsuitable roles while also allowing employers to retain staff where possible.

However, a trial period can directly affect entitlement to statutory redundancy pay under the Employment Rights Act 1996. Whether redundancy pay is preserved or lost depends on how the trial period is handled, whether the role is suitable, and whether either party ends the arrangement within the statutory timeframe.

This article explains when a trial period impacts redundancy pay, how tribunals assess disputes, and what legal consequences may arise in England and Wales.

Legal basis for trial periods in redundancy

The statutory trial period is set out in the Employment Rights Act 1996. It applies when an employee:

• is offered alternative employment by their employer
• accepts that offer
• moves into the new role before their existing employment ends

The law provides a four-week trial period for employees to assess whether the alternative role is suitable in practice.

If the role proves unsuitable during this period, the employee may still retain entitlement to redundancy pay, provided proper termination rules are followed.

When a trial period does NOT affect redundancy pay

A trial period does not affect redundancy pay where:

1. The employee rejects the alternative role during the trial period

If the employee starts the new role but finds it unsuitable and ends it within the four-week trial period, redundancy rights are usually preserved.

This applies when:

• the role is genuinely unsuitable in practice
• the employee gives notice within the trial period
• termination is linked to unsuitability rather than preference

In such cases, the employee is treated as still being dismissed by reason of redundancy.

2. The employer terminates during the trial period due to unsuitability

If the employer decides the role is unsuitable for the employee during the trial period, redundancy entitlement is normally maintained.

3. The role is not genuinely suitable from the outset

If a tribunal finds the alternative job was not suitable, the trial period does not remove redundancy rights even if the employee accepted it.

When a trial period DOES affect redundancy pay

A trial period can remove entitlement to redundancy pay in certain circumstances.

1. Employee unreasonably refuses or abandons the role after the trial period

If the employee continues in the role beyond the statutory four-week trial period and then leaves, redundancy rights may be lost.

This is because:

• continuation beyond the trial period may indicate acceptance
• leaving later may be treated as resignation rather than redundancy dismissal

2. Employee unreasonably rejects suitable alternative employment

If a suitable alternative role is offered and:

• the employee accepts but fails to engage with the trial period, or
• the employee refuses without reasonable grounds

statutory redundancy pay may be forfeited under the Employment Rights Act 1996.

3. Employee fails to comply with trial period rules

Redundancy pay may be affected if:

• the employee does not properly notify the employer of dissatisfaction during the trial period
• the termination occurs outside the statutory four-week window
• the process is not followed correctly

What counts as a valid trial period?

A trial period must meet statutory requirements:

Timing

• It normally lasts four weeks from the start of the new role
• It can be extended by written agreement to assess training needs

Purpose

• To evaluate suitability of the alternative role
• Not to permanently replace redundancy rights without consent

Structure

• Must be linked to a genuine offer of suitable alternative employment
• Must occur before redundancy is fully finalised

Interaction between trial periods and suitable alternative employment

The trial period is directly connected to the concept of “suitable alternative employment”.

If a role is:

• suitable → refusal or failure after trial may affect redundancy pay
• unsuitable → redundancy rights are generally preserved

Tribunals assess suitability objectively, considering:

• pay and benefits
• job duties
• location
• working conditions
• level of responsibility

Key legal test used by tribunals

Employment tribunals focus on two core questions:

1. Was the alternative employment suitable?

If not, the trial period does not affect redundancy entitlement.

2. Was the employee's response reasonable?

Even if suitable, redundancy pay may still be preserved if refusal or termination was reasonable.

Reasonableness is assessed based on:

• health considerations
• family responsibilities
• travel or relocation impact
• reduction in pay or status

Effect on statutory redundancy pay

Statutory redundancy pay may be:

Preserved where:

• the trial period ends due to unsuitability
• the employee reasonably refuses the role
• the employer ends the trial period

Lost where:

• the employee unreasonably refuses suitable alternative employment
• the employee resigns after successful completion of the trial period
• the employee remains in the role and later leaves without redundancy grounds

Common disputes involving trial periods

Disputes often arise over:

• whether the role was genuinely suitable
• whether the trial period was properly applied
• whether termination occurred within the statutory timeframe
• whether refusal was reasonable
• whether the employee actually accepted the new contract

Tribunals examine documentary evidence such as offer letters, job descriptions, and correspondence during the trial period.

Practical steps for employees

Where a trial period is offered, individuals typically:

• confirm the start date of the trial period in writing
• request full job details and contract terms
• document concerns about suitability early
• notify the employer promptly if the role is unsuitable
• ensure termination (if necessary) occurs within the four-week period

These steps are important to protect redundancy entitlement.

Practical responsibilities for employers

Employers must:

• clearly define the start date of the trial period
• ensure the alternative role is properly documented
• explain rights to reject within the trial period
• assess suitability fairly and consistently
• record decisions about termination or continuation

Failure to follow proper procedure can result in unfair dismissal or redundancy pay disputes.

Key Takeaways

A trial period affects redundancy pay depending on how the alternative employment is handled. Where a role is unsuitable and the employee or employer ends it within the statutory four-week trial period, redundancy pay is usually preserved. However, if an employee unreasonably refuses suitable alternative employment or remains in the role beyond the trial period and later leaves, redundancy entitlement may be lost.

The key legal issues are suitability, timing, and reasonableness, all of which are assessed by employment tribunals based on the facts of each case.