06 Apr 2020
Redundancies can occur for one of two reasons:
- As a result of closure or
- Moving the business or to reduce ongoing business expenses such as employee salaries.
Depending on the reason for making your employees redundant, you may find that you need to re-employ some of them.
But how long after making someone redundant can you re-employ them? Are you legally obligated to wait a certain period before re-employing an employee?
For urgent enquiries regarding the re-employment of a redundant employee, you can contact the expert Croner team on 0800 141 3800. Our employment law consultant team will offer advice that’ll keep you on the right side of the law.
In this article, we’ll answer the questions highlighted above. We’ll also explore the obligations you have to your redundant employees.
Can you re-employ a redundant employee?
A common employer question is, ‘Can we re-employ someone we made redundant?’ Yes, you can. In the UK, there’re currently no restrictions on re-employing staff after redundancy.
However, to avoid claims of unfair dismissal by other employees made redundant, you’ll need to prove:
- The redundancy is genuine.
- The necessity of the redundancy at the time.
- That you’re only recruiting now due to a change in the company’s financial situation.
Before making an employee redundant, you’ll need to provide them with a sound business reason for the redundancy. After they’ve served their redundancy notice period, they can then leave the business.
Due to changing circumstances, such as the business recovering from an economic downturn, you may find that you need to fill one or more of the positions that you’ve previously made redundant.
In this situation, you may find yourself wondering if it’s worth hiring and training new employees. Or if it’s better to re-employ individuals that already have knowledge of your business and the skills needed for the job.
So, can a company re-employ after redundancy? Yes. However, there are a few things to keep in mind:
- Did the employee leave the business on good terms? It might affect their willingness to work for you again.
- Is the re-hiring based on a continuity of employment? If so, the re-hired employee may have to return any statutory redundancy payment made to them during the redundancy period.
- Did you re-hire the staff member immediately after making them redundant? You might open yourself up to investigation by HMRC for attempting to take advantage of the tax-free status of a redundancy payment.
How long after redundancy can you re-employ an employee in the UK?
There are currently no rules regarding re-employment after redundancy in the UK.
However, you may need to allow some time (typically one week) in between the termination of one period of employment and the commitment of the new employment. This period breaks their ‘continuity of employment’.
Continuity of employment is when an employee has worked for you without a break. This period can determine certain rights afforded to employees such as maternity leave, redundancy pay and requests for flexible working.
By allowing some time after making an employee redundant and before re-hiring them again, you’re ensuring a break in their continuity of employment.
This means the employee is entering the business as a new member of staff and with a new contract that emphasises that it’s a new period of employment.
It's worth noting, under section 214 of the Employment Rights Act 1996, if an employee receives redundancy pay and is then re-employed by you later, you can consider this a break in the employee’s continuity of employment.
This means, if they’re made redundant again before acquiring two years’ service under their new contract, they won’t be able to receive statutory redundancy pay.
Still not sure how to go about the redundancy process? Speak to a Croner expert today for help with your selection process or general redundancy guideline. Call us free on 0800 141 3800.
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