What happens to redundancy pay received, if you are re-hired by a former employer?

sliphi

This question was raised in another thread, but I felt the question deserves a thread of it's own.

If you are rehired by your former employer to place you on furlough under the CJRS, what happens to any redundancy money already paid?

Under s.214 of the Employment Rights Act 1996, once an employer has paid the redundancy pay, continuity of employment is broken and so redundancy pay is not required to be repaid if you are subsequently re-hired by them.

Is there any contradictory legislation (or official guidance) that affects this under the CJRS?

Jeremy535897

There was an old thread, not sure it's much use, but may trigger a memory in someone.
https://forums.moneysavingexpert.com/discussion/1528435/re-employment-after-redundancy-same-company-not-allowed

SuperWizard

The only cases I can find are both cases from the 70s (W E CALVERT (applicant) v. ALLISONS (GRAVEL PITS) LTD (respondents) [1975] IRLR 71 and F ALLWOOD and others (applicants) v. WILLIAM HILL (NORTH EAST) (respondents) - [1974] IRLR 258) where it was deemed appropriate for the employee to pay back the redundancy package to ensure continuity of service. Obviously, this has been supplanted by the Employment Rights Act 1996, section 214. As of right now, I can't find any official guidance or legislation anywhere that suggests redundancy payments have to be paid back, although it's possible the law might get changed in the near future.

I can see the employer making it a contractual condition for any non-statutory part of the redundancy package to be repaid upon hiring, but not the statutory part (which is probably all anyone ever gets these days) because it was the employee's statutory right to receive it and the employer has no discretion over that.

If they didn't want to pay out the redundancy payment originally, they shouldn't have made the employee redundant, and of course they're under no obligation to rehire anyone anyway, so some employers are probably going to unlawfully try it on but hopefully a court strikes that sort of nonsense down.

Suseka97

Was anything put in writing when you were put on redundancy notice?  Was it voluntary or compusory?  I ask only because my employer offered staff voluntary redundancy earlier in the year and one of the clauses was that those who were offered it were not able to be rehired within a 2 year period and if they were then they would have to repay a certain percentage depending on the number of months/years lapsed between last day of employment and the date a person would be rehired.  

unholyangel

sliphi said:

This question was raised in another thread, but I felt the question deserves a thread of it's own.

If you are rehired by your former employer to place you on furlough under the CJRS, what happens to any redundancy money already paid?

Under s.214 of the Employment Rights Act 1996, once an employer has paid the redundancy pay, continuity of employment is broken and so redundancy pay is not required to be repaid if you are subsequently re-hired by them.

Is there any contradictory legislation (or official guidance) that affects this under the CJRS?

You're reading that all wrong. 

It's also a counter-productive argument for being furloughed under CJRS since you'd be arguing you don't need to repay redundancy as it's a new employment, not the same old one that you started prior to 28th Feb (you can't claim under CJRS for employees hired after 28th Feb). 

sliphi

Suseka97 said:

Was anything put in writing when you were put on redundancy notice?  Was it voluntary or compusory?  I ask only because my employer offered staff voluntary redundancy earlier in the year and one of the clauses was that those who were offered it were not able to be rehired within a 2 year period and if they were then they would have to repay a certain percentage depending on the number of months/years lapsed between last day of employment and the date a person would be rehired.  

Voluntary redundancy often involves paying someone a lot more than is mandated under statute. (else why would most people even volunteer unless they were actively considering leaving anyway?)

I agree that many employers, in usual times, often refuse point-blank to re-employ those that have been paid off under voluntary redundancy, early retirement, etc, (and that often includes as temporary/agency worker) or if they do, will only do so on repayment of a substantial sum, which is often not possible as it has either already been spent or invested.

But (a) these are far from usual times and I suspect no one ever envisaged the possibility of the situation we find ourselves in, let alone the emergency legislation that has been introduced to deal with it, and (b)  any repayment deal would still leave the receipent with that amount due under statute i.e. the minimum amount paid under compulsory redundancy.

calcotti

Give that this is an unprecedented situation with no case law I can’t see any incentive for an employer to take the risk or reemploying somebody.

sliphi

unholyangel said:

sliphi said:

This question was raised in another thread, but I felt the question deserves a thread of it's own.

If you are rehired by your former employer to place you on furlough under the CJRS, what happens to any redundancy money already paid?

Under s.214 of the Employment Rights Act 1996, once an employer has paid the redundancy pay, continuity of employment is broken and so redundancy pay is not required to be repaid if you are subsequently re-hired by them.

Is there any contradictory legislation (or official guidance) that affects this under the CJRS?

You're reading that all wrong. 

It's also a counter-productive argument for being furloughed under CJRS since you'd be arguing you don't need to repay redundancy as it's a new employment, not the same old one that you started prior to 28th Feb (you can't claim under CJRS for employees hired after 28th Feb). 

I think am sure I'm reading that right.

You may wish to read again the guidance offered to employees that were employed (on PAYE) at 28/02 and have since been made redundant. The old employer is able to rehire such an employee and place them on furlough.

sliphi

calcotti said:

Give that this is an unprecedented situation with no case law I can’t see any incentive for an employer to take the risk or reemploying somebody.

I can only imagine that is because you do not understand the various potential benefits to an employer doing so.

If you were so scared to venture into the unknown, you probably wouldn't have a successful business to hire anyone anyway.

calcotti

sliphi said:

calcotti said:

Give that this is an unprecedented situation with no case law I can’t see any incentive for an employer to take the risk or reemploying somebody.

I can only imagine that is because you do not understand the various potential benefits to an employer doing so.

If you were so scared to venture into the unknown, you probably wouldn't have a successful business to hire anyone anyway.

That’s a valid point of view but I just think there is too much uncertainty about the legal position. Am glad I am no longer in a position to need to make such decisions. I certainly know that making people redundant was the most distressing aspect of running a business.

unholyangel

sliphi said:

unholyangel said:

sliphi said:

This question was raised in another thread, but I felt the question deserves a thread of it's own.

If you are rehired by your former employer to place you on furlough under the CJRS, what happens to any redundancy money already paid?

Under s.214 of the Employment Rights Act 1996, once an employer has paid the redundancy pay, continuity of employment is broken and so redundancy pay is not required to be repaid if you are subsequently re-hired by them.

Is there any contradictory legislation (or official guidance) that affects this under the CJRS?

You're reading that all wrong. 

It's also a counter-productive argument for being furloughed under CJRS since you'd be arguing you don't need to repay redundancy as it's a new employment, not the same old one that you started prior to 28th Feb (you can't claim under CJRS for employees hired after 28th Feb). 

I think am sure I'm reading that right.

You may wish to read again the guidance offered to employees that were employed (on PAYE) at 28/02 and have since been made redundant. The old employer is able to rehire such an employee and place them on furlough.

I have read it, it's that guidance which explicitly states no employee hired after 28th Feb can be claimed for. 

If you're going to argue the continuinty of employment has been broken then you're arguing its a brand new employment that commenced after 28th Feb (and therefore not eligible for CJRS). You can't have it both ways. Either you were made redundant and started a new employment with them after being made redundant or you're still in your existing employment term and weren't made redundant.