You can just swap the update statement like:
IF (status =1) OR (status =2)
BEGIN
UPDATE issuesdetails SET assignedto=@employeeid,status =2 , testerassign=@testerid WHERE issuetrackerid=@issuetrackerid
END
ELSE
BEGIN
UPDATE issuesdetails SET assignedto = @employeeid , testerassign=@testerid WHERE issuetrackerid=@issuetrackerid
END
--Amit