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Should furlough be an alternative to redundancy?

View profile for Sarah Shah
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Should furlough be an alternative to redundancy?

The Employment Tribunal has reached different decisions in two recent cases, both concerning the fairness of the employer’s decision to dismiss on the grounds of redundancy rather than furlough the employee.

In Mhindurwa v Loving Angels the employee was dismissed by reason of redundancy after her work as a live-in carer ceased due to the pandemic.  The employer declined the employee’s request to be furloughed instead, on the basis that there was no live-in care work and no alternative roles it could offer her.  The employee brought a claim for unfair dismissal on the grounds that she should have been placed on furlough. 

The Tribunal held that the employer had no way of knowing if work would become available in the future.  During the hearing the employer was unable to provide a reasonable explanation why furlough was not a viable option and the decision to dismiss was unfair.  The Employment Judge stated, “I am of the view that in July 2020 a reasonable employer would have given consideration to whether the claimant should be furloughed to avoid being dismissed on the grounds of redundancy”. 

In the second case, Handley v Tatenhill Aviation Ltd, the employee brought a claim for unfair dismissal on the basis that the furlough agreement stated that he would stay on furlough until he was able to resume his job as a flying instructor.  The employer evidenced that it did consider keeping the employee on furlough but, due to the uncertainty of the furlough scheme, the limitations of the type of work the employee could carry out and its need to cut costs irrespective of the furlough scheme they dismissed the employee on the grounds of redundancy.  

The Employment Judge held that the employer’s decision to dismiss the employee, despite the existence of the furlough scheme, did not make the dismissal unfair. The Judge stated ‘Whilst another employer may have taken a different approach and chosen to leave the claimant on furlough for longer, it cannot be said that it was unfair of the respondent not to do so”.

How employment tribunals are approaching redundancy cases 

Whilst both these cases are first instance decisions and not legally binding, they provide helpful insight into how employment tribunals are approaching redundancy cases where furlough could have been used in the alternative.  

For a redundancy to be a ‘fair’ reason for dismissal an employer must follow a fair procedure, which includes considering alternatives to making redundancies.  

The Coronavirus Job Retention Scheme (CJRS) or furlough was announced by the government on 20 March 2020 as an alternative to making staff redundant by providing financial support to employers struggling to pay wages.  Furloughing or continuing to furlough might not be the right decision for every business but these decisions evidence employers must consider continuing furlough and explain why they did not.

If you were made redundant or face a claim for redundancy where furlough could have continued or need support and assistance with your options in advance of the closure of the furlough scheme please get in touch with me to discuss. Please contact me via Sarah.Shah@birkettlong.co.uk or 01206 217301.

 

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