Medium2 marksMultiple Choice

Employment lawEmployment lawRedundancy

This question is part of a case study — click to read the full scenario(Case 49)

Section B - Scenario 2

IronForge Ltd is a heavy manufacturing company. They engage Sarah as a welder. Sarah must wear an IronForge uniform, work set shifts from 8am to 4pm, and use IronForge's welding equipment. However, her contract explicitly states: 'Sarah is an independent contractor and is responsible for her own tax.'

Based on the multiple (economic reality) test, what is Sarah's likely employment status?

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ACCA · Question 51 · Employment law

Section B - Scenario 2

IronForge Ltd is a heavy manufacturing company. Due to automation, IronForge no longer needs manual forklift drivers. They make David, a forklift driver, redundant. They offer him an alternative role as a data entry clerk in the office, at the same salary. David refuses the offer because he hates office work and has no computer skills.

Is David entitled to a statutory redundancy payment?

Answer options:

No, because he unreasonably refused an offer of alternative employment.

No, because the new role offered the same salary.

Yes, because the alternative employment offered was not 'suitable' for him.

Yes, because employers cannot force employees to change roles.

How to approach this question

Apply the legal test for 'suitable alternative employment' in redundancy situations.

Full Answer

C.Yes, because the alternative employment offered was not 'suitable' for him.✓ Correct

Under the Employment Rights Act 1996, an employee loses their right to a statutory redundancy payment if they unreasonably refuse an offer of 'suitable alternative employment'. Suitability is judged objectively based on skills, status, and pay. A data entry role is fundamentally different from a manual forklift role and requires different skills. Therefore, it is not suitable, and David's refusal is reasonable, entitling him to his redundancy pay.

Common mistakes

Assuming that if the pay is the same, the employee must accept the job.

Question 50 All questions Question 52

Practice the full ACCA LW — Corporate and Business Law Practice Exam 6

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