Can you re-hire a previously redundant employee?

Changed position

As a result of the impact of coronavirus on your business, you might have been forced into making some unexpected compulsory redundancies. However, if things are starting to look up and you now need to increase your staff headcount again, one option would be to go back to the previously redundant employees to effectively offer them their jobs back (or similar roles), particularly if they had useful specialist skills or extensive knowledge of your business.

Pro advice. You’re under no legal obligation to offer a redundant former employee their job back if your business situation improves - you can offer the role to someone else if you prefer. Likewise, you’re not obliged to offer them the same or better terms and conditions of employment.

Genuine redundancy

One risk here if you do go back to a redundant employee is that they turn down your job offer and then assert that their original redundancy wasn’t genuine. However, whether there’s a genuine redundancy situation is assessed at the time the redundancy is made, i.e. from when the employee is given notice of termination through to the day when their employment actually terminates (the effective date of termination of employment - EDT). What happens following that date has no bearing on whether the redundancy dismissal was fair or not at the time.

Pro advice 1. This means that you can offer a previously redundant employee their job back due to the change in your business circumstances. You don’t have to wait at least three months before being able to offer re-employment, or before recruiting someone new.

Pro advice 2. Three months is the current time limit for claiming unfair dismissal in the employment tribunal (subject to any extension for Acas early conciliation). If a redundant employee claims unfair dismissal in these circumstances and argues there was no genuine redundancy in the first place because their old job has now been re-offered (whether to them or to someone else), you’ll need to be able to show that the improvement in your business circumstances took place after their EDT.

Redundancy payment

If the employee received a redundancy payment following their original redundancy because they had been employed for two years or more, they won’t need to pay any of this back if you re-employ them. This is the case whether it was a statutory or an enhanced redundancy payment. The only exception would be if you have a contractual redundancy payment scheme which expressly provides for some repayment in these circumstances.

Pro advice 1. Any re-employment constitutes a new period of employment and there’s no continuity with the employee’s previous period of employment with you (provided they’ve been out of your employment for at least one full calendar week, starting from a Sunday). Make this clear in your offer of re-employment letter (see Follow up ). This means they need to work for you for at least two further years to qualify for a statutory redundancy payment again.

Pro advice 2. The position is different if you offer to renew an employee’s employment contract before their original employment has come to an end, e.g. during their notice period. If the renewal takes effect either immediately on, or not more than four weeks after, the end of their original employment, the employee isn’t then entitled to a statutory redundancy payment and their continuity of employment is preserved, s.138 Employment Rights Act 1996 .

Offer of re-employment to a redundant ex-employee