Guidance for Employers
How Soon After Redundancy Can I Rehire?
You’ve made some redundancies in line with the needs of your business. However, things change and sometimes new recruits are needed again shortly after a redundancy process. So now what? This post provides guidance for employers and managers into what you should and should not do regarding rehiring after redundancy.
How Soon After Redundancy Can I Rehire?
15 September, 2020
by Lianne Lambert
You’ve made some redundancies in line with the needs of your business. However, things change and businesses evolve, and sometimes new recruits are needed again shortly after a redundancy process. So now what?
The question of “How long before you can recruit after redundancy?” comes up quite frequently. As with many things related to employment law, there are no hard and fast rules in this situation.
As a general guide, you will only make a role redundant when you cannot see the situation changing in the foreseeable future and that time period is widely accepted as being 6 months. Therefore, generally, you should not recruit into a role that you have made redundant for a minimum of 6 months after the termination date of the employee.
The topics this post covers are:
We strongly advise you get in-touch with us on 0203 319 1649 to get expert, tailored guidance before you take any actions.
1. Making Sure You’re Using Redundancy Properly
When the question “How long before you can recruit after redundancy?” is asked at the start of a redundancy process it tends to start a few alarm bells ringing, as it can be an indication that the role isn’t really redundant.
If a business is already thinking about how quickly they can backfill a position, it makes us wonder whether the business is really trying to deal with a poor performer through a redundancy process thinking that it’s going to be the easiest way to exit someone from the organisation.
We’re definitely not here to judge but, if this is what you’re thinking we’d point you towards a more detailed piece that we’ve written about the redundancy process. The piece will help you understand the complexities of the process and the risks associated with using it when it’s not a genuine redundancy situation.
However, the other time this question comes up is when there’s a great deal of uncertainty in a business and there’s a fear that if a role is made redundant today and then needed again in a few weeks’ time the business is going to be in a very difficult position.
2. But My Business Needs Change – What Should I Do?
A lot can happen in six months and I think we can all agree that things have never been more uncertain than they are right now. Frequently business needs change.
Obviously, hiring into different roles within the business to the one that you made redundant isn’t an issue. However, please don’t think that you can just give the job a different job title and you’ll be fine. If you made an Office Manager redundant and then decide to hire a Manager of the Office, this won’t be OK! However, if you made an Office Manager redundant and you now need to hire an Employment Lawyer, you’ll be fine.
The challenge can arise when you’ve made a role redundant based on a genuine redundancy situation that existed at the time when you made the decision and then, 1 – 2 months later you land a new big project/client from nowhere and you now need someone to do the job that you didn’t think you needed anymore. In this scenario, you do have options.
3. Can You Rehire Someone After Making Them Redundant?
If, for whatever reason, you decide that you want the employee back that you have made redundant, then you can contact that individual and offer them the opportunity to return.
Depending on the amount of time that has passed between their termination and you looking to rehire them, there can be tax implications for any tax-free redundancy payment that they have received.
You should talk to your accountant if you find yourself in that position or if you have any queries about this being a problem.
4. But, I Don’t Want That Person Back. Can I Take On New Staff After Making Redundancies?
You can, but there is risk associated with this. The former employee may use the fact that you are rehiring into their role quickly as a way to demonstrate that their redundancy wasn’t genuine and you could find yourself facing an unfair dismissal claim.
One of the things that we guide clients to do in any redundancy process is to ensure that they create solid documentation that captures all of the considerations that have been made in relation to redundancy.
We can’t stress the importance of this enough. You may need to be able to evidence the genuine nature of the redundancy in 12 – 18 months’ time, in front of an Employment Tribunal judge. Relying on memory can be challenging and is far more open to criticism than if you have detailed documents, produced at the time, that you can use as evidence. You’ll then also need to be able to demonstrate that something then happened that meant the role was needed again.
5. Seek Professional Advice On Your Redundancy Situation
So, as long as you can demonstrate that the role was redundant, something changed and you then needed the role again, you can rehire and can hire a different employee. But, we would strongly advise that you get professional guidance if you do find yourself in this situation.
We would suggest that you speak with someone who can advise you on the strength of the evidence that you would have to support your decision to make the role redundant initially and the evidence that you have that something subsequently changed that meant you required the role again. Only then, can you really assess the level of risk associated with rehiring into the position and not rehiring the former employee.