Re-Employing Staff After Redundancy: What Employers Need to Know

You can re-employ someone you've previously made redundant—but it's important to proceed carefully to avoid legal pitfalls.

📝 Was the Redundancy Genuine?
Before re-hiring, ensure the original redundancy was genuine and followed fair procedures. If the redundancy is later viewed as a sham (for example, if the role never truly ceased to exist), you could face claims of unfair dismissal. Make sure any re-employment is for a new or significantly altered role, not just a backfill of the previous position.

💰 Can You Ask for the Redundancy Payment Back?
Generally, no. Redundancy payments compensate the employee for job loss at that time, even if you re-hire them later. However, if the employee returns within 6 months, it could affect their continuous service, impacting future rights like redundancy entitlements and unfair dismissal protection. Some employers may negotiate repayment to reinstate continuous service, but this isn't legally enforceable unless both parties agree.

⏳ Understanding Continuous Service
If an employee returns within a short period, continuous service may be preserved, which could impact future liabilities—such as notice periods, redundancy entitlements, and protections from unfair dismissal. If there's a break of more than 6 weeks but less than 26, service continuity could still be a grey area, potentially leading to disputes. Clear contractual terms can help manage this risk.

⚠️ Legal Considerations & Risks

• Sham Redundancy Claims: If the employee argues that redundancy was not genuine, you could face legal challenges.
• Unfair Dismissal: Re-hiring for the same role might suggest the redundancy wasn't legitimate, exposing you to unfair dismissal claims.
• Repayment Disputes: Seeking to reclaim redundancy payments without clear mutual agreement can lead to legal disputes.

❓ Need Expert Guidance?

Re-employment after redundancy can be complex. To avoid legal challenges and ensure compliance, get expert advice from Granite Green. We specialise in employee relations and can guide you through the process to protect your business.