Re-instatement or re-engagement of an employee after an unfair dismissal trial

When we think of an unfair dismissal tribunal the two most common outcomes that spring to mind are either that the employee loses the case and continues with employment elsewhere, or if the case is found in their favour a financial award is paid by the employer.

But there is another scenario that both employers and employees should be aware of. If there’s a finding of unfair dismissal the tribunal will also consider and advise the employee of their right to ask for re-instatement or re-engagement.

Bringing a former employee back into work after a dismissal can create challenges for all those involved, especially if some time has elapsed since the employee was dismissed which is often the case.

What is the difference between reinstatement of an employee and re-engagement?

A reinstatement order requires the employer to treat the employee as if they had never been dismissed. Re-employing them on the same terms with no loss of pay, pension rights or continuity of employment. Plus, the benefit of any pay rises or other improvements they would have enjoyed if they hadn’t been dismissed.

A re-engagement order is an order, on terms that the tribunal decides, that the claimant must be engaged by the employer (its successor, or an associated employer) in employment that is comparable to the job they were dismissed from, or in other suitable employment.

In what circumstances can this happen?

When deciding whether to make an order for reinstatement or re-engagement, the tribunal must consider:

– the wishes of the employee.

– whether it is reasonable/feasible for the employer to comply with the order.

– whether the employee contributed to the dismissal.

These orders are the exception rather than the rule and are utilised in less than 1% of successful unfair dismissal cases.

What about compensation after an unfair dismissal trial?

Any compensation to make up the lost salary and benefits must take account of any salary earned in another job in the meantime, pay in lieu of notice and other compensation already paid by the employer. If the employee didn’t get a job in the interim, they’re not penalised for failing to mitigate their losses.

If an employer fails to comply with an order for reinstatement or re-engagement, the tribunal may make an additional award of between 26 and 52 weeks’ pay. That award is penal rather than compensatory.

Because of this, employees may ask the tribunal to order re-instatement or re-engagement as a remedy in their claim, so that when negotiating a settlement, the financial risks of an unfair dismissal finding in the tribunal are higher for the employer.

Are there criteria for a re-instatement or re-engagement order?

The decision on whether the order can be made will depend on the factors listed below and ultimately whether the employee can be successfully re-integrated back into the organisation:

– it must be desired by the employee

– it must be practical and possible to be carried out successfully

– whether suitable vacancies are available at the time of the consideration

– the suitability of the position and the employee’s skill set

– whether the trust and confidence between the parties has broken down

Does company size affect these orders being considered?

Yes, it does! Re-instatement or re-engagement orders are more likely in larger organisations simply because they may have a greater pool of suitable vacancies available than a smaller company.

Larger organisations may also find it easier to separate parties who were originally involved in the dispute or where the relationship became strained because of the dismissal. 

Size and resources of the employer also becomes relevant when considering suitability for a vacancy. Even if the employee may not be the best candidate for another role, if the employer has training resources readily available then the tribunal can decide that they could be trained, therefore making the re-engagement order a practical option.

For support and guidance on unfair dismissal claims, tribunals, and anything else mentioned in this article please get in touch for an informal chat.