Post Redundancy Recruitment Risks | Cleaver Fulton Rankin

When employers operate a restructuring or redundancy process it is important to consider suitable alternative roles before confirming any redundancies. However, once a redundancy termination occurs it will be difficult to justify recruitment of new staff into a role that was identical or similar to any roles that were the subject of a recent redundancy. An employer may assume it is safe to start recruiting again immediately after making staff redundant but, unless there has been a sudden and significant increase in workload immediately after terminations occur, the recruitment may result in the redundant staff lodging Tribunal claims.

In general, redundancies should always be considered as a last resort. Where suitable alternative employment can’t be offered, employees can be let go but are entitled to receive a statutory redundancy payment if they have 2 years continuous service. In order to take an unfair dismissal tribunal claim, NI based employees only require 12 months service. The issue of when it is appropriate to recruit safely will mainly depend on the reason why the employer is recruiting new staff and the roles involved. For instance, if an employer makes a redundancy termination which is followed shortly thereafter by a job advertisement for the same or similar role, the tribunal will scrutinise this carefully in the event of any claim being made. There is a similar risk where employers restructure roles and decide to make new appointments in similar positions which could have been considered as suitable alternative roles for the outgoing staff. It is not uncommon for employers to start planning these appointments even when the restructuring process remains ongoing.

In these scenarios a tribunal may well conclude that the redundancy was a sham process. As with any potential unfair dismissal claim, there is also a risk that other additional claims, such as unlawful discrimination, could be issued by the redundant staff.

There may be circumstances where recruiting soon after redundancies would be justifiable, such as an unexpected increase in workload and an employer may be able to defend an unfair dismissal claim based on a change in circumstances this creates. Where there’s been no major change in the amount of work, the best option is to delay recruitment decisions until at least six months after the last redundancy was made, as by this point redundant staff will be unable to claim unfair dismissal.

There is no reason why an employer cannot offer a redundant employee their old job back if there is a sudden increase in workload. This re-appointment can be made soon after they were made redundant. Technically, there is a minor risk that they may claim that their redundancy wasn’t genuine, but they are unlikely to do so if they are currently looking for work. Allegations of unfair dismissal and discriminatory treatment are prevented when a redundancy is covered by a robust compromise agreement.

As with any potential termination of employment, when contemplating a redundancy or restructuring situation, we would strongly recommend taking legal advice.

This article has been produced for general information purposes and further advice should be sought from a professional advisor. Please contact our Employment Team at Cleaver Fulton Rankin for further advice or information.