Can an employer recruit after making a redundancy?

In challenging economic times, businesses may need to make staff redundant. But when things improve, they may need to recruit again. How do you stay on the right side of employment law? Let’s find out more.

Redundancy is complex, whether you’re the employer making someone redundant or the employee on the receiving end. If you’re an employer, you want to do what is right for your business while still playing fair with your employee and following employment law. If you’re the employee being let go, you’re more concerned with looking after yourself.

But what happens after redundancy? If you’re a business owner, and the situation that caused you to make redundancies improves, you need to hire again. You might wonder if you can rehire for that position without falling foul of employment law. On the other hand, if you’re the employee who was made redundant and you find out your old company is hiring again, you might feel aggrieved that you were let go in the first place. You may think about calling your solicitor to discuss your options.

Whatever side of the fence you’re on, in this article, we’ll lay out the facts about rehiring after redundancy from a legal point of view.

When can you rehire after redundancy?

The simple answer is whenever you wish. There is no set period where an employer cannot recruit after making an employee redundant.

However, if you recruit for exactly the same role that you recently said was redundant, you take a risk. It could compromise the fairness of the original dismissal and leave you open to a tribunal claim.

Justifying redundancy

When justifying redundancy, employers have to demonstrate that a redundancy situation exists. Sometimes, the reason is that the office is closing or the business is ceasing trading. However, it’s often because there is no longer a need for the job. This could be because of a drop in customer demand, but there are other reasons, such as getting a new piece of software that performs tasks humans used to do.

In times of low demand, employers should consider alternatives to redundancy. For example, can you keep your employee (or employees) on for longer? Could you put them on short time or lay them off until the work picks up again?

These questions are more relevant than ever during the COVID-19 pandemic. Many employers took advantage of the government’s furlough scheme (no longer available) to avoid making redundancies, but as their required contributions increased, they would be questioning how long to use the scheme before biting the bullet and making redundancies.  

Rehiring

The risk of rehiring for a position you have previously made redundant is that when your ex-employee finds out, they may question whether their redundancy was genuine. The sooner you recruit someone new after making a redundancy, the more likely your ex-employee is to feel aggrieved.

However, it’s certainly possible that the situation that caused you to make a redundancy no longer exists. For example, you could win a big new customer the week after the redundancy, dramatically improving your financial position. Just as you can avoid unfair dismissal claims by making sure you can justify each redundancy, if you wish to rehire for that position in the future, you may need to demonstrate that those circumstances have changed.

You also need to ensure that you followed the correct process when you made the redundancy. Employees with two years’ continuous service have unfair dismissal rights. If you don’t follow a fair process, they will be entitled to compensation for financial loss suffered. 

More points to remember

Here are some more points to consider when rehiring after redundancy:

·         You are obliged to consider whether you can offer your employee a ‘suitable alternative’ position rather than make them redundant

·         You are not under any obligation to offer the role to the same person you made redundant after their employment has ended

If you’ve been made redundant and you think your redundancy wasn’t genuine because your ex-employer has recruited someone else, you have a three-month window of opportunity to take initial steps before filing a claim against them. If you believe this is happening to you, move fast and take advice early. 

Find out more from Couchman Hanson

Redundancy is a complex area of employment law, but it relies on facts. At Couchman Hanson, we are experts at advising on both sides of the redundancy process.

For employers, we know that redundancy isn’t straightforward and is often fluid as it aligns with your business needs. We also advise employees on the fairness of their dismissal and whether there are merits in pursuing an Employment Tribunal claim.

For employees, redundancy can be emotive and spark feelings of resentment, and fear for the future. We understand this and can help you to understand your legal position so that you can make an informed decision on how you wish to proceed.

At Couchman Hanson, our solicitors genuinely care about getting the best outcome for you. We’re highly professional, with ‘city’ level talent and experience, but also friendly and welcoming. Everything we do fits with our values of integrity, honesty and authenticity.

Call 01428 774756 or visit couchmanhanson.co.uk