Should a redundant employee who is offered a trial period in an alternative job be paid at the rate of the new job or their old job?
During a trial period in an alternative job an employee should be paid at the rate of the new job, unless agreed otherwise between the parties.
The purpose of the trial period is to give the employee the chance to decide whether or not to accept the alternative job on the terms and conditions offered. Where the new rate of pay is higher, this does not pose such an issue, but a lower rate of pay could be one of the reasons why a trial period is necessary before the employee decides whether or not to accept the offer.
A job on a lower wage or salary is unlikely to be deemed to be suitable alternative employment. If the employee is not prepared to agree to the lower rate of pay, 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 retain their right to a statutory redundancy payment.
While an employer is not obliged to continue paying an employee at the level of their old job, it may choose to do so, for example by freezing the employee's pay until such time as pay rises elsewhere in the organisation bring it back into line.