Reinstatement and reengagement are remedies for unfair dismissal. They both involve re-employment of the dismissed employee. Reinstatement is re-employment of the employee back into the role he was dismissed from, as if the dismissal had never occurred. Reengagement is re-employment of the employee into a different role to the one he was dismissed form, on terms and conditions as close as is reasonably practicable to those he was dismissed from.

In the UK landmark case of Chagger v Abbey National plc & Hopkins of 2006, the Employment Tribunal concluded Mr Chagger had been dismissed unfairly, and that Abbey National (part of the Banco Santander Group) and Mr Hopkins had discriminated against Mr Chagger on the grounds of race in respect of Mr Chagger's dismissal. The Tribunal took the rare step of ordering Abbey National to reinstate Mr Chagger in order to remedy its wrongdoing. Abbey National, however, refused to comply with the Tribunal's order. Following Abbey National's failure to comply, the Tribunal subsequently ordered Abbey National to pay Mr Chagger the record £2.8 million compensation for his loss on the basis that he had not been reinstated.

UK law regards reinstatement of the dismissed employee as the primary remedy for unfair dismissal; it enables the employee to continue to receive the economic benefits of the role in the future and also restores the mental satisfaction that the employee enjoyed from his role. If reinstatement is not practicable, UK law then usually prefers reengagement as the next best remedy.

When an Employment Tribunal makes a finding of unfair dismissal it must ask the employee whether or not he wishes to be reinstated or reengaged. If the employee expresses the desire to be reinstated or reengaged, then the Employment Tribunal has complete discretion as to whether or not to make such an order. The Tribunal will take into account whether it is practicable for the employee to return to work for the employer and, where the employee was partly to blame for the dismissal, whether or not it would be just and equitable to make such an order.

Employment Tribunals rarely order reinstatement or reengagement because the reality of the process of litigation is that its vexatious nature usually leaves the relationship between the employer and the dismissed employee beyond repair such that it is not possible for them to work together in the future; only in rare cases does the Tribunal conclude that the relationship remains workable.

If the Tribunal does order reinstatement or reengagement, then it is open for the employer to refuse to take the employee back. The employer's refusal to comply with the order will give rise to increased compensation, unless the employer satisfies the Tribunal that it was not practicable to comply. If the Tribunal is dissatisfied with the employer's reasons for refusing to comply with the order, then the employer will have failed to comply with what the law regards as the best solution to the given situation; then the Tribunal will move on to consider and award compensation as the remedy to right the employer's wrongdoing.

Tactically, requesting reinstatement/reengagement may be a good idea for an unfairly dismissed employee because the employer's failure to comply entitles the employee to be compensated in full for all his loss of earnings from the date of the dismissal to the date of reinstatement/reengagement; the statutory limit (or cap) on the compensation amount does not apply. Therefore, if the employee's losses to the date of the hearing exceed the statutory limit, then reinstatement/reengagement should be seriously considered. Furthermore, employers generally dislike re-employment so much that a credible application for it could lead to increased offers of settlement. If the employer complies with the order of reinstatement/reengagement, then the employee will be expected to comply too.