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Unfair Dismissal – Consideration of Furlough as Alternative to Redundancy

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We are now starting to see cases arising out of furlough leave. Two recent cases of Mhindurwa v Lovingangels Care Limited ET/3311636/2020 and Handley v Tatenhill Aviation Limited ET/2603087/2020 have been published. They provide helpful guidance on making redundancies during the operation of the Coronavirus Job Retention Scheme (CJRS).

In the case of Mhindurwa, it was found that the Claimant was unfairly dismissed when her employer refused to consider furlough and made her redundant. It was significant that the employer could not explain why it had not considered furlough or why it was not suitable.

In the case of Handley, the Claimant suggested that the fact that he had been placed on furlough leave and the terms of the furlough agreement prevented the employer from dismissing him for redundancy. The Judge in this case disagreed and noted that 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 employer not to do so. It was noted that it is for an employer, not the Employment Tribunal, to decide how to structure its business and whether to make redundancies. The Judge accepted the employer’s evidence that it needed to cut costs irrespective of the furlough scheme and that it wanted to use this scheme to pay some of the costs of making the redundancy. Incidentally, the dismissal was found to be unfair due to procedural errors (albeit the claimant was awarded no compensation due to there being a 100% chance of him being made redundant even if a fair procedure was followed).

These cases are not binding but they do appear to suggest that it is important for an employer to show it at least considered the CJRS before making an employee redundant. It is not necessarily unfair though to make an employee redundant while the CJRS exists.

Astons Solicitors
24th August 2021