If an alternative but less well-paid position is offered to a redundant employee, is there any obligation on the employer to continue paying the employee at their current level?

An employer should offer an employee who is under notice of redundancy any suitable alternative vacancy that arises prior to their termination date within the same organisation or an associated organisation. "Suitable" in this context means work that the employee can reasonably do and that is on terms and conditions not substantially less favourable to them. A job on a lower wage or salary will therefore not, technically, be suitable. Nevertheless, it is advisable for the employer to offer a redundant employee the option, if it arises, of a less well-paid position, because a failure to do so may turn an otherwise fair dismissal into an unfair dismissal.

The issue will be whether or not the employee is prepared to accept the new job on a lower rate of pay. If the employee is agreeable to this, the employer should ensure that this agreement is put in writing and signed before the employee begins the new job. If the employee is not prepared to agree to the lower rate of pay, then the redundancy dismissal will stand. An employee in these circumstances would have the right to refuse the alternative lower-paid post on the grounds that it was not suitable, and would therefore retain their right to a statutory redundancy payment. The employer is not obliged to continue paying the employee at their current level, although it may choose to do so if it wishes, perhaps by freezing the employee's pay until such time as pay rises elsewhere in the organisation bring it back into line.