Failure to consider furlough meant redundancy dismissal was unfair

Failure to consider furlough meant redundancy dismissal was unfair

The Employment Appeal Tribunal has upheld an employment tribunal ruling that an employee’s redundancy dismissal was unfair as the employer did not consider furlough as an alternative to dismissal.

In Lovingangels Care Ltd v Mhindurwa, Ms Mhindurwa worked as a care assistant, providing live-in care to an individual who went into hospital and then moved to a care home. Ordinarily she would have moved to care for another of her employer’s clients but, in the early stages of the Covid-19 pandemic, there was limited scope for this and, consequently, her role was at risk of redundancy. She asked to be furloughed but her employer refused, and she was dismissed by reason of redundancy.

She claimed unfair dismissal, with the employment tribunal ruling that her dismissal was unfair. It said that before dismissing, the employer should have properly considered the possibility of placing her on furlough for a period while it ascertained whether the situation would improve, enabling her to be placed with another client. The tribunal considered that the whole purpose of the Coronavirus Job Retention Scheme was to avoid laying off employees because of the effect of the pandemic, and a reasonable employer would have considered whether Ms Mhindurwa should be furloughed to avoid being made redundant.

Employment Appeal Tribunal decision

The Employment Appeal Tribunal upheld the employment tribunal’s decision and considered that the circumstances of the Covid-19 pandemic did not alter the legal test to be applied when considering whether a dismissal is unfair. An employer considering redundancies is generally expected to consider alternatives to dismissal and the employment judge had been entitled to conclude that the employer should have properly considered the possibility of furlough as an alternative to dismissal. The tribunal had applied the same approach to furlough as it would have applied to any possible alternative to dismissal that a reasonable employer might have been expected to consider.

What does this mean for employers?

As part of a fair redundancy process, employers should always consider whether there are any alternatives to dismissal. While normally this requires them to consider whether any alternative employment is available, in the circumstances of the Covid-19 pandemic it also required them to give proper consideration to whether it was appropriate to furlough employees under the Coronavirus Job Retention Scheme. This does not mean that employers could not make employees redundant while the Coronavirus Job Retention Scheme was available, just that they had to give proper consideration to using it as an alternative to dismissal in any case where work was unavailable due to the pandemic.