Employer should have considered furlough as an alternative to redundancy

Failure to consider furlough in redundancy context meant decision to dismiss was unfair.

Redundancy is one of the five grounds on which an employer may fairly terminate employment under the Employment Rights Act 1996 (the Act).  However, a redundancy dismissal will only be fair if, in all the circumstances of the case, the employer acted reasonably in treating the reason for dismissal as a sufficient reason for dismissing the employee.

This requires an employer to do more than simply state that redundancy is the reason for dismissal. The dismissal must also be fair in all the circumstances, including following a fair consultation process and exploring alternatives to redundancy.

A recent decision from the Employment Tribunal highlights how this is further complicated in the context of the coronavirus pandemic.

Case: Mhindurwa -v- Lovingangels Care Limited [2021]

Mrs Mhindurwa worked for LCL as a carer and in 2018 was employed to provide live-in care for a client. In February 2020 the client was admitted to hospital and subsequently moved into a care home, meaning Mrs Mhindurwa was no longer able provide live-in care to the client.

LCL began a redundancy process on the basis that they could no longer offer live-in care work to Mrs Mhindurwa. LCL did offer domiciliary care work, but Mrs Mhindurwa found this unacceptable because she lived too far away to where the work was located. Mrs Mhindurwa suggested she be put on furlough, but LCL refused on the basis that it had no live-in care work due to the pandemic. When LCL confirmed the redundancy, Mrs Mhindurwa appealed but this was not upheld.

Mrs Mhindurwa brought a claim for unfair dismissal, alleging that the real reason for her redundancy was a due to pay dispute, or that LCL should have put her on furlough instead of dismissing her.

The Tribunal concluded that LCL were genuine in stating that there was no live-in care work at the time Mrs Mhindurwa was made redundant and that redundancy was the genuine reason for her dismissal. However, when considering the fairness of the dismissal, the Tribunal reflected that the furlough scheme was available and at the time the decision to dismiss Mrs Mhindurwa was made a reasonable employer would have given consideration to whether Mrs Mhindurwa’s dismissal could be avoided. The Tribunal concluded that this had not been considered, or had not been properly considered, and that the appeal also failed to consider this, effectively ‘rubber stamping’ the original decision. The lack of a meaningful appeal process further supported the Tribunal’s conclusion that the dismissal was unfair.

Mrs Mhindurwa’s unfair dismissal claim was upheld.

Comment

This case serves to highlight the importance of employers considering all of the circumstances surrounding a potential decision to dismiss an employee and may serve as a warning to employers who dismissed staff in 2020 when the furlough scheme was available. However, it is important to note that the view of the Tribunal here was that furlough should have been properly considered, not that it should have been used.

Employers will be able defend unfair dismissal claims where furlough was available but not used, provided they can show there were good reasons for this and that the dismissal was fair in all the circumstances. In this case, there was an argument that furlough should have been used for a time to see whether live-in care work returned but the employer had not addressed its mind to this alternative, rendering the decision unfair. LCL further squandered the opportunity to rectify this by conducting an ineffective appeal.