Redundancies - Re-employing ex-employees

Sometimes in the current economic climate, despite your best efforts, redundancies are unavoidable. What happens though when business takes an upturn again? What if you are not sure if the upturn is temporary or permanent?

Fixed Term contracts

One option might be to offer a previously redundant employee a fixed term contract. These contracts specify either an end date, or a particular period of time, e.g. three months.

An FTC can be renewed as necessary, and to suit you, and the notice period can be made as short as possible, e.g. one week, giving you the option to terminate early without breaching the contract.

Note: If an employee remains on a fixed term contract, or a series of FTC’s for a period exceeding four years, the FTC automatically converts to a permanent contract.

It is possible that the redundant employee will then question the validity of the redundancy, i.e. whether it was simply a way to reemploy them on an FTC.

Unfair Dismissal

An ex-employee would have three months from the date of their employment being terminated to bring an unfair dismissal claim.

Therefore, to be on the safe side, don’t offer an ex-employee an FTC until a minimum of three months has passed.

Also, make it clear that the FTC is a new period of employment, preventing any continuity of employment questions.

Note: If an employee has worked on a FTC (or a series of them) for over one year, they then have the same protection as a permanent employee from unfair dismissal.