Should employers consider furlough as an alternative to redundancy?
Simran Lalli

Simran Lalli

Article written by Simran Lalli, Solicitor, Employment department

In Mhindurwa v Lovingangels Care Limited, an Employment Tribunal held that the Claimant, Mrs Mhindurwa,  who was made redundant in July 2020, was unfairly dismissed because her employer did not consider furloughing her.

Ms Mhindurwa was employed as a Care Assistant and over the last few years, provided live-in care to a vulnerable person, until they were admitted to hospital and then moved into a care home. In May 2020, Ms Mhindurwa asked to be furloughed. However, her employers refused on the basis that “there was no work for her”. Mrs Mhundurwa then received a letter from her employer explaining that she was at risk of being made redundant as they could not offer her any more live-in care work due to Covid-19 restrictions. Mrs Mhindurwa was given notice of dismissal in July 2020.

Ms Mhindurwa’s appealed against her dismissal, but this was rejected. She then proceeded to issue her claims at the Employment Tribunal. One of her arguments was that she should not have been dismissed and should have been furloughed instead.

The work that Mrs Mhindurwa was employed to undertake as a care assistant had diminished and therefore, the Employment Tribunal accepted that there was a genuine redundancy situation. Despite this, her dismissal was found to be unfair.

The Tribunal Judge took the viewpoint that: ‘In July 2020, a reasonable employer would have given consideration to whether the claimant should be furloughed to avoid being dismissed on grounds of redundancy’. It was a key factor that the employer could not explain why furlough was not considered (or considered not suitable). The employer did not appear to have considered furloughing her temporarily to see whether work became available. The dismissal was also found to be procedurally unfair.

There has been another recent case on the question of whether employers should consider utilising the furlough scheme as an alternative to redundancy. In Handley v Tatenhill Aviation Ltd, an Employment Tribunal found that dismissing an employee despite the existence of the furlough scheme did not render the dismissal unfair.

It is important to note that these cases are not binding. However, they indicate that whilst it is not necessarily unfair to make an employee redundant while the furlough scheme still in operation, it may be unfair if furlough is not considered as an alternative, or the employer cannot provide an adequate explanation as to why furlough was rejected or not considered.

The Grant Saw Employment department are hosting a webinar on restructuring and redundancy on Thursday 16 September 2021 at 12pm. This is the first of a two-part series on redundancy and will cover the different consultation procedures and when these should be used, how to conduct a consultation exercise, what to do if an agreement is not reached and how to implement changes to employment terms. You can sign up for this webinar here.

To discuss the contents of this article or for specific advice on an employment law matter, please feel free to email me or contact the Grant Saw Employment team on 020 8858 6971.