Article Rehiring after redundancy 16 September By Isaac Chan Redundancies are not uncommon for business, big or small, who are undertaking operational changes to the business such as downsizing or restructure; or selling the business. So, when can I re-hire…? However, there are a few things to consider before you do make a decision… An employee has 21 days following the date of termination to lodge an unfair dismissal claim, however, claims submitted after this period may be granted an extension by the Fair Work Commission FWC in extenuating circumstances that need not be related to the termination or employment.
What if I re-hire the same person? Boost your HR knowledge. Stay informed. With eBooks, articles and updates about the world of workplace relations, straight to your inbox, once or twice a month. Unsubscribe at any time. This field is for validation purposes and should be left unchanged. 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. We strongly advise you get in-touch with us on to get expert, tailored guidance before you take any actions. 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. In this scenario, you do have options. 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. You can, but there is risk associated with this. 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. 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.
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.
Chat through your HR requirements with one of our expert consultants to understand the actions you can take and how we can help. Previous post. Reopening a position could rock the boat, legally. When a redundant position is recreated within a short timeframe, it may expose the employer to claims that the termination was not genuine, say Calderone and Bradica.
While an employee has only 21 days after dismissal to lodge an unfair dismissal claim, the Fair Work Commission can, in limited circumstances, allow for an extension read more about such extensions here. Calderone and Bradica recommend employers document their redundancy process and the objective grounds on which the decision was made, keeping in mind the genuine redundancy criteria, which include:.
Generally, the termination of an employee by way of a genuine redundancy, and the subsequent re-employment of that employee, is not sufficient to maintain a continuity of service for the purpose of the Fair Work Act. Where annual leave entitlements are paid out on termination, there is no requirement for an employer to recognise previous service for the purpose of annual leave accruals on re-employment.
So make sure you fully understand your obligations under the relevant EBA or Award. While long service leave LSL entitlements differ from state to state, each state has provisions which recognise previous services when an employee is terminated and then re-employed by the same employer within a specific period of time.
For the majority of states and territories, this time period is two months. However, Queensland and Tasmania provide for a period of three months, and Victoria provides a period of 12 weeks. The relevant state or territory legislation should be checked for the precise requirements.
There are generous tax concessions in circumstances of genuine redundancy. They require certain conditions to be met, one of which is that, at the time of the dismissal, there must not be any arrangement — whether formal or informal, enforceable or not — between the employee and the employer or between the employer and a third party to employ the employee after the dismissal. For example, the genuine redundancy requirement will not be met if an employee is made redundant from their job with one company in a group, but the employer and employee have agreed at the time of termination the employee will be re-employed by an associated company.
Proceed with caution and diligence, say Calerdone and Bradica. Seek advice on a case-by-case basis because much of this will turn on the facts. If the employer is able to demonstrate there was a genuine redundancy at the time of termination, but due to a positive turn of events there was opportunity to re-employ staff, and a decision is made in good faith on that basis, it would seem reasonable and manageable to do so.
Extraordinary times call for extraordinary measures. We are certainly living and working through those. Part two of this article speaks with organisations and employees who have made the re-hiring process work.
0コメント