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RE-EMPLOYING REDUNDANT WORKERS
May 2009
Despite your best efforts, redundancies can be unavoidable. But what happens if you later find that you have got work coming in, but not enough to hire experienced ex-employees on a permanent basis? What's your best option then?
Not enough work
Sometimes there's no viable alternative to redundancy. But what can you do if you let an employee go only to discover that a few months on you have more work coming in than you can cope with - but not at a rate that justifies you offering them a permanent contract? Can you take them back on a temporary one until the market settles and, if so, is there anything to watch out for?
Offering fixed-term contracts
In this situation, your bet is to offer them a "fixed-term contract" (FTC). As its name suggests this type of contract is fixed in that it either specifies an end date, or that it will run for a particular period of time, e.g. three months.
Tip. An FTC can be renewed as and when necessary and to suit you. In the current economic climate, you may wish to keep the temporary period of employment as short as possible, e.g. one or two months or for a particular period of time, such as over the summer months when other employees take the bulk of their annual leave.
Unfavourable. As long as an employee does not remain on an FTC for more than four years the Fixed Term Employees (Less Favourable Treatment) Regulations 2002 won't apply. But if they do, the FTC will automatically convert into a permanent contract. This also applies where the employee works under a series of FTC's which, when put together, exceed four years.
Tip. Always put a notice clause into an FTC and make it as short as possible, e.g. one week. This gives you the option to terminate the contract early without it being breached.
Possible pitfalls
Whilst unlikely, there's a risk that a redundant employee will question whether or not their initial redundancy was actually genuine. In other words, they may argue that it was used simply as an excuse to re-employ them on an FTC.
Question of unfair dismissal
Where this happens an ex-employee would have three months from the date their previous permanent employment ended to bring an unfair dismissal claim against you.
Tip 1. Play it safe and don't offer any ex-employees an FTC until at least three months has passed since their original employment ended.
Tip 2. Make it clear that any FTC entered into is a new period of employment. This will help to prevent any arguments about continuity of employment and triggering the four year rule.
Unfair dismissal rights
It's sometimes wrongly assumed that when an employee works under an FTC that they gain immediate protection from unfair dismissal. This is incorrect. The actual position is the same as if they were a permanent employee, i.e. they have this right only when they have worked for you on an FTC (or series of them) for one year or more. So providing that the expiry of the FTC is the real reason for any dismissal, it will be fair if the work dries up again.
Source: Tips & Advice Personnel
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