In successful unfair dismissal claims, an Employment Tribunal may make an order for the reinstatement or re-engagement of the Claimant, and/or an order for compensation. In practice, Claimants rarely seek reinstatement or re-engagement, and even when they do, an Employment Tribunal rarely makes such an order. In the vast majority of cases, a successful Claimant is awarded compensation.
It should also be noted that very often a dismissal in itself may lead to a breakdown in trust and confidence, or this may be the case by the date of the final hearing, which may mean that reinstatement (or indeed re-engagement) has very limited scope.
Under the provisions of s. 114 of the Employment Rights Act 1996 ("the Act") an order for reinstatement is defined as "an order that the employer shall treat the complainant in all respects as if he had not been dismissed."
If an Employment Tribunal makes an order for reinstatement, it must consider:
Whether or not the Claimant wishes to be reinstated.
Whether or not it is practicable for the Respondent to comply with an order for reinstatement.
Under the provisions of s. 116(1) of the Act, where contributory conduct is concerned, whether or not it would be just and equitable to order reinstatement.
In Central & North West London NHS Foundation Trust v Abimbola EAT/0542/08, the EAT held that an Employment Tribunal erred in its approach in deciding whether or not to order the reinstatement of a Claimant when the Tribunal failed to take each of the above into account. The EAT stated that in the context of reinstatement, "practicable" means more than possible.
An Employment Tribunal will consider the effect that an order for reinstatement might have on a Respondent's business. The Tribunal will not make an order for reinstatement if this would lead to a redundancy situation, over-staffing, or industrial unrest.
In Port of London Authority v Payne and others  IRLR 9 CA, the Court of Appeal overturned an order for reinstatement because the Court found that the Respondent had shown there were no vacancies and it would be disruptive to ask others to take voluntary redundancy. The Court of Appeal held that the Employment Tribunal had failed to give due weight to the Respondent's commercial judgement about practicability.
In King v Royal Bank of Canada Europe Ltd  IRLR 280 EAT, the EAT held that an Employment Tribunal had failed to comply with s. 112 of the Act. The Employment Tribunal had not considered reinstatement because "the Claimant's post was redundant" and re-engagement "as there was no suitable alternative post for the Claimant." Section 112(2)(a) of the Act requires an Employment Tribunal to explain to a Claimant that orders for reinstatement and re-engagement can be made under s. 113 as well the circumstances in which those orders are made.
Section 112(2)(b) requires the Tribunal to ask whether or not a Claimant wants such an order. The EAT stated that in consideration of the importance that the Claimant had attached to re-employment, "the Tribunal's failure to deal with this issue was a striking omission." The EAT also held that the Employment Tribunal had wrongly restricted its consideration of alternative employment to the time of the Claimant's dismissal, and had failed to deal with the issue at the time of the hearing, "which would be the relevant time for considering the question of re-engagement."
Where an Employment Tribunal makes an order for reinstatement, the Claimant must be reinstated in the original job and receive back pay and benefits from the date of dismissal. Under the provisions of s.114(2) of the Act, the order will include an award for arrears of pay and benefits, together with an award for loss of any rights and privileges, including seniority and pension rights.
Under the provisions of s.116(6) of the Act, when an Employment Tribunal considers whether or not it is practicable to make an order for reinstatement, the Tribunal should not take account of the fact that the employer has engaged someone else to do the job, unless the Respondent can show that it was either not practicable for the Respondent to arrange for the Claimant's work to be done without engaging another employee, or that the Respondent engaged someone else after a reasonable period of time without hearing from the Claimant or that the Claimant wished to be reinstated.
If an Employment Tribunal decides not to make an order for reinstatement, the Tribunal must consider re-engagement. Under the provisions of s.115 the Act, re-engagement is defined as "an order that the complainant be engaged by the employer, or by a successor of the employer, or by an associated employer, in employment comparable to that from which he was dismissed, or other suitable employment."
If an Employment Tribunal is to consider re-engagement, the Tribunal will take into consideration the same factors as outlined above for reinstatement.
If an Employment Tribunal makes an order for re-engagement, the Tribunal must specify:
The terms on which re-engagement will take place.
The identity of the employer.
The nature of the employment.
The remuneration for the employment.
What benefits and arrears of pay are payable.
What rights and privileges, including seniority and pension rights are to be restored.
The date by which the order must be complied with.
When calculating how much arrears of pay and benefits are payable to a Claimant, the Employment Tribunal must take into account any wages paid in lieu of notice, or any ex-gratia payments made by the Respondent, or remuneration paid in respect of employment with a new employer.
As with reinstatement, under the provisions of s.116(6) of the Act, when an Employment Tribunal considers whether or not it is practicable to make an order for re-engagement, the Tribunal should not take account of the fact that the employer has engaged someone else to do the job, unless the Respondent can show that it was either not practicable for the Respondent to arrange for the Claimant's work to be done without engaging another employee, or that the Respondent engaged someone else after a reasonable period of time without hearing from the Claimant or that the Claimant wished to be re-engaged.
Additional award for failure to reinstate or re-engage
Under the provisions of s. 117(3) and (4) of the Act, and unless a Respondent can satisfy the Tribunal that it was not practicable to comply with an order for reinstatement or re-engagement, then the Employment Tribunal will make an "additional award" for compensation which will be between 26 and 52 weeks pay in addition to the basic and compensatory awards.
In Awotona v South Tyneside Healthcare NHS Trust  All ER (D) 221 (Feb) CA, the Court of Appeal held that if a Respondent fails to re-engage or reinstate a Claimant, an Employment Tribunal can reassess any award made to a Claimant at the original hearing in respect of losses from the date of dismissal to the date of re-engagement or reinstatement.
If it was not practicable to comply with an order, then the test is one of "practicability" and not "possibility." Although an Employment Tribunal will examine any reasons or evidence put forward by the Respondent, the Tribunal ought to give due consideration to the Respondent's commercial judgement (unless the Respondent's evidence is disbelieved, see Port of London Authority v Payne and others, above).