Despite exceptional government assistance, the Covid-19 pandemic’s seismic effect posed the sad potential of unemployment for many UK enterprises in impacted industries. Those firms that withstand such adversity, on the other hand, may find themselves in a situation where they need to re-employ workers.
So, how does one go about hiring people who have just been laid off? What are the potential pitfalls?
Employers considering rehiring employees who have lost their employment should be mindful of the potential of unjust dismissal. Workers laid off may allege that they were wrongfully terminated if the same employer hires new employees just a short time afterwards.
As a result, it’s critical that your initial redundancy plan was founded on legitimate and verifiable business needs:
- Requirements for that position may have ended or lessened or are likely to do so shortly
- The locations in which the work was done may have closed.
- It’s possible that your company is through a cost-cutting exercise or that it’s implementing new technology or making organisational changes.
All of these are genuine causes for the loss of employees. However, wherever feasible, you’ll need to propose alternatives to redundancy, so that job losses are only used as a last choice.
Any new job taken soon after a replacement programme may reveal flaws discovered during that time. So the first stage in this episode is to make sure that your redundancy procedures were legal, that they used selection pools and fair criteria, that they weren’t based on protected traits, and that they were done by contractual notice periods and remuneration.
Changes in the environment
You should have strong and demonstrable reasons for now requiring extra workers, just as your redundancy should have been based on a legitimate necessity. There’s no reason why you couldn’t hire people who were previously laid off, provided you can show economic reasons for doing so.
As an employer, treating your employees with respect and dignity throughout the redundancy process will perhaps open the door for you to hire the same individuals again if circumstances change. This demonstrates the value of a positive corporate culture. Some cases, such as with municipal governments, require the repayment of redundancy compensation. However, this is not the case with SMEs.
The Consequences of Re-Employing Employees
If firms opt to start re-employing employees quickly after redundancy, there is a risk of uncertainty about job continuity.
A week and a day’s hiatus is required by law to show that the continuation of work has been legitimately disrupted. Employees’ statutory entitlement to redundancy compensation will be preserved in this situation.
Remember that workers have three months from the date of redundancy to file an unfair dismissal claim. As a precaution against tribunal claims, you may want to wait three months or more before retiring.
There are further ramifications to consider. Workers should be informed that they are legally considered brand new employees if they are rehired. As a result, if the employer has to go through the terrible procedure again, they must start again to gain rights to redundancy compensation.
Because redundancy payments are tax-free, business owners should be mindful of falling foul of HMRC and any claims that redundancy was utilised as a tax benefit.