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Cole Comfort: The Risks of Rehiring Former Employees

Last month, after some whispers and gossip, an announcement was made that Cheryl Cole would be returning as a judge on the popular TV talent show The X Factor.  This announcement came after a three year absence following Ms Cole’s departure in 2010 to become a member of the panel on the US version of the show.  The change of country turned out to be rather unsuccessful for the former Girls Aloud singer, as she was subsequently dropped due to a purported lack of appeal to US viewers.  This led to Ms Cole being paid an undisclosed figure as compensation for loss of earnings, and a reported frosty relationship with the show’s executive producer, Simon Cowell.

However, it appears that the icy relationship has now thawed, and Mr Cowell and Ms Cole have subsequently reconciled.  The music mogul has now moved to bring the one-time talent show contestant back to the show, now entering into its eleventh series, in an effort to improve ratings.  However, returning to an old job with a former employer is not always straight forward.

Firstly, it should be clearly established that there has been a break in the employee’s continuity of employment.  This will be simple in a case such as Ms Cole’s, where there has been such a long hiatus, but where the gap is shorter there may be question marks about whether the absence correctly broke the employee’s continuity of employment.  Although specifying within the contract of employment that no previous service with the employer counts toward their continuous employment, it is the facts rather than the written terms of the contract that will determine the true position.  If (a) there was a cessation of work, (b) the employee was away from work due to that cessation, and (c) the cessation was temporary, there may be no break in continuity.  This will then be relevant to the amount of notice of termination an employee is entitled to receive or the calculation of any statutory redundancy pay that may become due.

The circumstances of the original departure will of course also be relevant.  Managers need to consider the implications of bringing former staff (liked or disliked) back into the fold.  For example, this may lead to historical issues being raised or old tensions simmering under the surface.  If the employee was previously dismissed for a valid reason, for example poor performance, there would be a risk of the same issue arising again.  However, managers may have to disregard previous disciplinary issues if they are no longer on the employee’s personnel file or are stated to be disregarded after a specific period of time.  Effectively the employee would be returning with a “clean slate”, despite the fact that their colleagues will have knowledge of any past issues. 

It is not uncommon for employees agreeing the mutual termination of their employment under a Settlement Agreement to agree not to return to the employer for a specific period of time (e.g.  one year).  This is usually done in an effort to avoid a form of “double recovery”, where an employee would be paid compensation for loss of employment but then obtain new employment with the same employer.  As compensation in such circumstances is not intended to act as a windfall, such measures can be taken to avoid the employee effectively obtaining more through compensation and salary than the loss they would have otherwise suffered. 

It is easy to consider old staff members as seasoned employees who do not require a probation period or a shorter notice period.  However, it is sensible to include such terms for any new starter in order to “test the water”.  Even the most successful employees can struggle on the return to an old job; we only need to look at the doomed return of Kevin Keegan to Ms Cole’s beloved Newcastle United in 2008, which led to an Employment Tribunal claim for constructive dismissal, as evidence of this.  That is not to say that appointing a former employee does not have its advantages.  It can save a business the hassle and cost of conducting a recruitment process, and can avoid certain training costs.  It also provides greater certainty regarding the fit of the employee into the organisation, as well as their potential performance and ability.  In Mr Cowell’s case, he knows exactly what he is going to get having spent three years sat next to Ms Cole behind the judges’ buzzers.

And thankfully for him, UK audiences do not seem to mind a Geordie accent.

 

This article was first published as part of our Employment Law Update - April 2014.  This article is offered for general informational purposes only, and does not constitute legal advice. The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the views or opinions of Solomon Taylor & Shaw.