Wednesday, 03 August 2011 12:07

Redundancy

Redundancy_2

Re-employing a redundant employee

Last year, you made an experienced employee's position redundant. As you now require that role again it makes sense to re-employ them. Is this possible and, if so, what do you need to know before taking this step?

Getting back on the books


A client has asked about the legalities of re-employing staff that have been made redundant – there’s no point in training up someone new if they’ve got all the skills and expertise you need. But will this practice leave you exposed to a claim? Well, provided you’re careful, it is acceptable. So what must you consider before going down this route?


Time frame following redundancy


The first issue is the time that’s elapsed between the redundancy and re-employment. If it’s three months or less (and assuming they have got one year’s continuous service) they could question whether their redundancy was genuine.

Risk.If they suspect that it wasn't, you could be landed with an unfair dismissal claim

Tip. To be on the safe side, don’t consider any re-employment for a minimum of four months.


Justifying your decision


Secondly, you must be able to justify your reasons for needing to re-engage a redundant employee. This is particularly important if you were forced to make several redundancies but only need to re-employ a small number of staff. You must also be able to show why an individual’s expertise is back in demand. This is much easier to do if the situation involves a skilled worker; if they’re semi or unskilled, you’ll need stronger arguments.

Tip. If time is fairly short, e.g. three months, be prepared to explain why you didn’t foresee that workforce levels would need to increase again so quickly.

  What type of employment?

You’ll also need to consider the basis upon which you’re going to re-employ a particular member of staff. Unless you are very confident that there’s going to be sufficient work for them, we would advise that, a.t least initially, you offer them a fixed-term contract (FTC).


A good starting point


The initial FTC could be for; say three or six months; it can always be extended if there’s sufficient work available. If not, their employment will just terminate at the end of the fixed period. Don’t forget, however, that you must offer staff on FTCs the same or equivalent benefits given to all permanent employees.

Tip. Once an employee has worked on one (or more) FTCs for four years, it automatically coverts to a permanent contract. This is unavoidable – so watch out for those dates.


What about continuity of service?


As you will be offering a redundant employee a brand-new contract of employment, they won’t have any “continuity of service”. This means that they will need to accrue one year’s continuous employment in order to gain rights against unfair dismissal and two years for redundancy etc.

Tip. Any statutory or enhanced redundancy payment made to the employee is theirs to keep, regardless of the amount; it can’t be reclaimed if you offer them further employment.