Furlough, redundancy and unfair dismissal: A recent case

Wednesday 18 August 2021

As the Coronavirus Job Retention Scheme (Scheme) winds down we are starting to see cases in which furlough is a key issue make their way through the tribunal system. Recently, the Employment Tribunal (ET) heard the case of Mhindurwa v Lovingangels Care, in which the Respondent genuinely believed that the Claimant’s role was redundant on the grounds that it had no work for her. The Claimant asked to be furloughed but the Respondent refused and proceeded to make her redundant in July 2020. The Claimant brought a claim for unfair dismissal.

The ET ruled in the Claimant’s favour, finding that although the Respondent may not have had any work available for her at the time, it may have done at some point in the future. As a consequence of the uncertainty that prevailed in 2020, the Scheme had been put in place by the Government to help employers in just such a situation with the purpose of avoiding or reducing the need to make redundancies.

On the facts of this case the ET found that there was no good reason why the Respondent could not have put the Claimant on furlough as a reasonable alternative to dismissing her for redundancy. So, whilst it was always for the employer to decide whether or not to access the Scheme and employees had no entitlement to be furloughed on request, the ET has now sent a message to employers that a failure to at least consider the option to furlough during a redundancy process can render a resultant dismissal unfair.

It is important to be aware that this is only a decision of a first instance tribunal, so it is not binding on future cases being brought in the ET. However, it does indicate what factors will be taken into account by an ET when deciding cases where accessing the Scheme could have been (but was not) considered.

One point to bear in mind is that, during 2020, the Scheme rules were constantly changing. Therefore, with these cases, it will be important to determine which version of the rules applied when the employee was dismissed and whether furlough was a practical option at that time.

Looking forward, we are anticipating a slew of cases which also consider the issue of furlough in relation to the reasonableness of redundancies. Whilst this was a case where it was the decision not to furlough that was in question, we envisage a large number of pending claims where the Claimant will allege that the fact that they were furloughed was (unfairly) the basis for their selection for redundancy at a later point.

This should serve as a warning for employers to ensure that, when contemplating possible redundancies prior to the end of the Scheme, they should first consider putting the employee on furlough. Also, if employers are considering making furloughed employees redundant, they must make it clear that the selection criteria did not put them at a disadvantage because of their furlough and they should avoid the perception that the selection for redundancy of any furloughed employees was pre-determined.

If you have any questions about furlough and redundancy, please email or call our Employment Law team today on 0113 207 0000.