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Employee unfairly dismissed when employer failed to consider furlough scheme as an alternative to redundancy

September 15, 2021

It is no surprise to see an increasing amount of Employment Tribunal cases concerning the role of the Coronavirus Job Retention Scheme (CRJS), better known as the furlough scheme, in situations where employees are made redundant. In this note we consider the developing body of case law relating to the failure to utilise the furlough scheme.

The case of Mhindurwa v Lovingangels Care Ltd was brought by Mrs. Mhindurwa who was made redundant in July 2020 after her employer refused to consider furlough for her as an alternative to redundancy. She had been employed to provide live-in care to a vulnerable person, but this patient was moved to a care home in February 2020. Due to the lack of live-in care work for her, she requested to be furloughed in May 2020 which was refused by her employer precisely because of the lack of live-in care work. Her role was made redundant in July 2020.

The Tribunal found that in July 2020, a reasonable employer would have considered either furloughing Mrs. Mhindurwa or temporarily furloughing her to see whether work subsequently became available as an alternative to redundancy. The Tribunal also took note of the lack of explanation from the Respondent as to why furlough had not been considered. Therefore, it held that Mrs. Mhindurwa was unfairly dismissed.

In the case of Handley v Tatenhill Aviation Ltd Mr Handley had been furloughed by his employer in April 2020 and was eventually made redundant in August 2020. His furlough agreement stated that his furlough would last “for a period of up to 3 weeks initially or until you can return to work as normal”. Mr Handley argued that his furlough agreement prevented redundancy, which was not accepted by the Tribunal. The Tribunal accepted that the employer needed to cut costs irrespective of the furlough scheme, and not keeping Mr Handley on furlough for longer was not unfair for the employer to do.

These two cases demonstrate that the Employment Tribunal expects employers to, at the very least, consider furlough for employees at risk of redundancy. The Tribunal may not immediately deem dismissal to have been unfair if furlough had not been used if the employers can provide reasons as to why they chose not to make use of it. The case of Handley v Tatenhill shows that cost concerns of an employer can be a valid reason not to make use of, or continue, furlough for at risk employees. Employers should therefore ensure they have a record of decisions taken relating to furloughing, or unfurloughing employees. We anticipate that in the coming months we will see more of this type of furlough cases, including cases decided at an appellate level – such as the Employment Appeal Tribunal (EAT).

The material contained in this article is provided for general purposes only and does not constitute legal or other professional advice. Appropriate legal advice should be sought for your specific circumstances and before any action is taken.

@ Miller Rosenfalck LLP, September 2021

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