The legal implications of employing temporary workers after making redundancies

01/03/2010

By Nick Hobden, Partner and Ben Stepney, Solicitor in Employment. Featured in Kent Business.

An employer can only make staff redundant if a genuine redundancy situation arises. A genuine redundancy situation can arise where there is a business closure, a workplace closure or a reduced requirement for employees. As part of a fair redundancy consultation process, employers must offer any suitable alternative positions to those employees at risk of redundancy.

It is fair to say that an employer who decides to make permanent employees redundant, with a view to using cheaper temporary workers to carry out the same jobs, is unlikely to be able to show that there was a genuine redundancy situation in the first place. Indeed even if business unexpectedly picks up soon after making redundancies, employers who then take on temporary workers may expose themselves to an increased risk of unfair dismissal claims. Of course employers are not expected to know exactly what the future may hold.  If an unforeseen upturn in business quickly follows redundancies, then the employer is within its rights to recruit new workers, whether temporary or permanent. But the key point question is whether, at the time the redundancies were made, there was a genuine redundancy situation.

Where an employer is concerned about taking on new staff shortly after a redundancy, one way to minimise the risk is to wait at least 3 months. This is because unfair dismissal claims can normally only be made within three months of dismissal. Employers can reduce risks further by ensuring that the temporary workers' roles are substantially different from the ones previously made redundant. This increases the chances of arguing that there was a genuine redundancy situation. It also chips away at any argument that the employer ought to have offered these new roles to its previous employees.

Businesses that are subject to fluctuations in workload and need more flexible staff could always try to avoid these issues altogether by ensuring that they have the right to temporarily lay off their permanent staff or use short time working during quiet periods.  Provision for this must be made in the employment contract, otherwise the employer will need to seek the consent of the employees to such measures.