What an Employer Needs to About Employee Reinstatement Orders

As an employer, you may need to dismiss your staff for various reasons. However, you must ensure you do not engage in unfair dismissal. Unfair dismissal is unlawful and can result in an employment claim at an employment tribunal. If the employee’s claim is successful, the employment tribunal can order your business to compensate the employee. This is costly, time-intensive, and may potentially damage your business’ reputation. In addition to a compensation order, a tribunal also has the power to make an employee reinstatement order.

In addition to a compensation order, a tribunal also has the power to reinstate your employee. This effectively entitles them to resume their position on the same terms as before the unfair dismissal. This article will explain what you as an employer need to know about unfair dismissal and a reinstatement order . It will also distinguish between an employee reinstatement order and a re-engagement order. 

What is Unfair Dismissal?

The law restricts your ability to dismiss your employees. In general, you cannot unreasonably dismiss employees with two or more years of service. What the law considers unreasonable depends on the circumstances of the dismissal. But in general, the reason for the dismissal must be along one of five grounds:

• capability; 
• conduct; 
• redundancy; 
• legal restrictions on the employee’s ability to continue to work; and 
• some other substantial reason.  

Generally, an employment tribunal will try and determine if you:

• had no valid reason for the dismissal;
• did not follow a fair and reasonable procedure; or
• had no justifiable reason for dismissal.

Employees with less than two years of service have less protection. This means you might be able to dismiss them for other reasons that an employment tribunal might consider unfair to an employee with more than two years. 

Under no circumstances can you dismiss an employee for reasons protected under the Equality Act. These include:

• race;
• gender;
• sexual orientation;
• age;
• ethnic origin; 
• religion; or 
• marriage or partnership status. 

What is an Employee Reinstatement Order?

An employee reinstatement order is a remedy that an employment tribunal may award the employee if it finds you have unfairly dismissed them. The tribunal will only grant an employee reinstatement order if the employee wishes to be reinstated. 

If the tribunal makes an employee reinstatement order, you must abide by it. This means your business must:

• re-employ the employee;
• grant them the same terms as employment as before the dismissal; and
• honour any improvements to the terms of their employment which they would have otherwise been entitled to had you not dismissed them (e.g. a salary increase). 

When reinstating your employee, ensure your employee is not at a loss in terms of:

• any pay they would have received if not dismissed;
• any pensions; and 
• their continuity of employment.

Importantly, you cannot treat the employee unfairly as a consequence of the reinstatement order. While you may find it difficult, given the time and expense of the tribunal, you should strive to treat the employee as if they had never brought the claim. 

If you fail to follow the terms of the reinstatement order, the tribunal may force you to pay them between 26 to 52 weeks’ worth of pay. The tribunal can make additional compensation orders. 

 Reinstatement Order vs Re-Engagement Order 

As an employer, you may have come across a re-engagement order. This is similar to a re-instatement order but there are some key differences. 

The table below points out the difference and similarities between a re-instatement order and a re-engagement order.

           REINSTATEMENT ORDER             RE-ENGAGEMENT ORDER

Further Considerations for Employee Reinstatement Orders 

There are other key points you may wish to note concerning the unfair dismissal of your employee and whether you have to reinstate or re-engage them in your business. 

Both employment reinstatement orders and re-engagement orders will require you to ensure that your employee receives any lost benefit and salary since you dismissed them.

When calculating the above, you should deduct benefits they have already received, such as pay in lieu of notice and ex gratia payments, but there is no statutory cap on what the amount can be (unlike unfair dismissal compensation).

If you do not comply with a re-engagement order, the judge can order you to pay a large sum to your former employee. That is, they do not have the power to ensure you comply with the re-engagement order. In effect, you could refuse to abide by the order if you would prefer to pay a substantial penalty rather than reinstate the employee. However, it is best practice to obtain legal advice from an employment lawyer before disregarding the tribunal order. 

Key Takeaways

If an employment tribunal finds that you unfairly dismissed an employee, you will usually have to pay them compensation. However, in rare circumstances, the tribunal may also order your business to reinstate the employee. Finally, it is worth remembering that a reinstatement order is distinct from a re-engagement order. 

If you need help understanding unfair dismissal and reinstatement or re-engaging an employee in England, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today on 0808 196 8584 or visit our membership page.

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