Re-engagement orders can be expensive for employers

1st May 2019

Re-engagement orders can be expensive for employers

In unfair dismissal claims, claimants commonly seek compensation which is capped at a statutory upper limit. However claimants can also seek re-instatement or re-engagement. The former being where the claimant is placed back into the role previously held by the claimant, while the latter is where the claimant is employed by the respondent employer in an alternative role.

Due to the breakdown in relationship which will inevitably occur when a claimant brings a tribunal claim, re-instatement and re-engagement orders are rarely sought. However, if a tribunal considers such an order as appropriate the employer can face a large financial pay-out.

In the case of Fotheringhame v Barclays Services Ltd, the Claimant wished to be re-engaged following a successful unfair dismissal claim. Re-instatement was no longer possible with the claimant’s job ceasing to exist.

The tribunal ordered the respondent to engage the Claimant in a role which was deemed a demotion for the Claimant as this was the only available role in the company. The employer was also liable to pay the Claimant his remuneration package he received pre-dismissal for the period between dismissal and re-engagement.

Employer Considerations

Although it is rare that ex-employees will request a re-engagement order, employers should be aware of the possibility that such an order could be made. Employers would then be faced with an employee returning to work for the business following a period of tension and/or having to make a large pay-out. Such a pay-out could be significantly more than the statutory cap for compensation in unfair dismissal cases.

Employers are advised to take a pro-active approach to avoid a similar situation arising. By seeking advice about the procedure for dismissing employees, employees can limit the risk of a claim being brought successfully.


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