Warner Goodman Solicitors banner
Services
People
News and Events
Other
Blogs

Employment Law Case Update: Furlough as an alternative to redundancy

View profile for Employment Team
  • Posted
  • Author

When considering redundancies in your business, it is important that you follow the right procedure to avoid potential tribunal claims against you, including reviewing all suitable alternatives to redundancies.  During Covid-19, one alternative would have been to place the employee on furlough leave; our Employment Law team today reviews the case of Mrs B Mhindurwa v Lovingangels Care Limited 2021 in which the employer did not consider this was viable and paid the price.

Mrs Mhindurwa worked as a live-in care provider for the company from 2018 until her dismissal in July 2020. Due to the coronavirus pandemic, the company experienced a significant downturn in the amount of live-in care work it was able to offer its employees and Mrs Mhindurwa was informed that she may be made redundant. She asked if she could be placed on furlough and was told this was not possible because there was no work for her. At a redundancy meeting, Mrs Mhindurwa was told that the company could only offer her domiciliary work, but she could not accept this work because it was too far away from where she lived. Mrs Mhindurwa was subsequently informed that she would be made redundant, which she appealed, however this was dismissed.

Mrs Mhindurwa filed a claim of unfair dismissal against her employer, arguing that she should have been placed on furlough rather than dismissed, and that she was targeted for redundancy because she had previously raised issues at the company regarding underpayment of her wages. The company argued that they could not place her on furlough because there was no live-in work available.

The Employment Tribunal (ET) accepted the company’s assertion that it did not have any live-in care work to offer Mrs Mhindurwa, and that she was dismissed by way of redundancy. Having established the reason for the dismissal, the ET then considered whether the redundancy was fair.

The ET noted that the whole purpose of the furlough scheme was to avoid lay-offs and redundancies in businesses impacted by Covid-19, and determined that “a reasonable employer would have given consideration to whether [Mrs Mhindurwa] should be furloughed to avoid being dismissed on the grounds of redundancy”. The company had failed to give proper consideration to the option of placing Mrs Mhindurwa on furlough leave and waiting to see whether work levels might increase.

The ET was also critical of the companys appeal process, calling it a rubberstamp exercise” where the person hearing the appeal simply accepted the position of the company without considering Mrs Mhindurwa’s assertion that she should be furloughed.

The ET was satisfied that the companys failure to properly consider furlough as an option, combined with the failure to conduct a proper appeal rendered the dismissal unfair.

A remedy hearing was scheduled for a later date.

This judgment was a first instance decision and so is not binding on future cases. This case also does not mean that a tribunal will necessarily find that an employee who was made redundant rather than placed on furlough was unfairly dismissed. The mistake the employer made in this case was that they failed to properly consider furlough as an alternative to redundancy both when making the initial decision and again after the employee appealed. Employers are reminded to fully consider all potential alternatives to redundancy, and if proposed alternatives are determined to be unsuitable, to document the reasons why.

If you have any questions regarding this article, you can call our Employment team today on 023 8071 7717 or email employment@warnergoodman.co.uk.

This was previously part of our weekly Employment Law Newsletter. If you would like to subscribe, please email us at events@warnergoodman.co.uk or just fill in our subscription form.

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.