Acumen News & Events

17 May 2010

Re-employing former employees?

Plagued with pitfalls or a step in the right direction?

The recruitment and Employment Confederation has announced the first rise in temporary placements and permanent appointments for over 17 months. Due to the cost of recruiting and inducting the right individual into your organisation, it is important that employers get recruitment right.

In the current climate, one avenue that many employers are considering is to re-employ those who have left their organisation through redundancy as it is seen as a cost effective way of reducing the risk of recruitment.

Advantages of re-employing a former employee is that it is a good way of bringing an individual into the business without suffering the cost of training someone. Past employees will also know the business and the expectations of the business. From an employer’s point of view they will have firsthand knowledge of how the former employee works as well as their strengths and weaknesses.

There are however some important points that employers must be careful of. One to consider is that if a business has made redundancies and are now looking to recruit, it is better for them to wait 3-6 before recruiting otherwise they may be expected to consider recruiting the redundant employees for their old or similar positions.

If however employers do wish to re-employ an individual who has been made redundant within the 3 month time period, they must be aware that HM Revenue & Customs make take an interest. The reason being is that redundancy payments of up to £30,000 are usually tax free.

Depending upon the time scale of re-employment it will also affect if there has been a break in service. If there has been a break, a new contract of employment will need to be drafted and issued. If there has not been a break then the employer may be seen as employing the individual on the same terms of service and entitlement.
To re-employ an individual who you have made redundant may seem like a win-win scenario for both parties but employers need to be vigilant and avoid the pitfalls.

For further information and advice on this matter call us today on 01244 357 211.