Employees with at least two years’ continuous employment are entitled to a redundancy payment when they are dismissed by reason of redundancy. It is a question of fact whether an employee has firstly been dismissed and secondly whether it is by reason of redundancy. For example, an employee is not considered to have been dismissed when suitable alternative employment is offered and accepted within a particular time frame. Unless the terms and conditions of the renewal or re-engagement are identical to the previous terms and conditions, the employee is entitled to a statutory trial period of at least four weeks, without prejudice to their redundancy rights.

However, the employee loses their right to a redundancy payment if they refuse an offer of a new or renewed contract (with the original employer or associated employer) provided that the offer was made before the old contract was terminated, the renewal or re-engagement is to take effect immediately upon the termination of the employee’s employment under the old contract or within four weeks thereafter, the job offered is the same as the old job or else constitutes suitable alternative employment and the employee unreasonably refuses the offer.

It is a question of fact whether an 'offer’ is made at all. Employees can only be at risk of losing the right to a redundancy payment for unreasonably refusing an offer of re-employment if the employer has actually made an offer in the first place. A general invitation to an employee to apply for a vacancy is unlikely to constitute an offer and as such an employee’s refusal to apply is unlikely to amount to a refusal of an offer of renewal or re-engagement.