Employment tribunal and court judgments | May 2023

Unfair Dismissal: should employers have considered furlough as an alternative to redundancy?

The Employment Appeal Tribunal (EAT) in Lovingangels Care Ltd v Mhindurwa has upheld an Employment Tribunal (ET) first instance finding that an employee was unfairly dismissed because the employer failed properly to consider the possibility of furlough under the Coronavirus Job Retention Scheme as an alternative to a redundancy dismissal.

First instance decision

During the early stages of the Covid-19 pandemic, the Claimant's role as a care assistant was at risk of redundancy and she asked to be furloughed. Her employer refused, and she was dismissed by reason of redundancy, resulting in a claim for unfair dismissal.

The ET found that her dismissal was unfair and before dismissing the Claimant, her employer should have properly considered the possibility of placing her on furlough for a period of time whilst determining whether the situation would improve. The ET highlighted that the whole purpose of the Coronavirus Job Retention Scheme (CJRS) was to avoid dismissing employees because of the effect of the pandemic and that a reasonable employer would have considered furlough instead of making the Claimant redundant.

EAT decision

The EAT upheld the ET's decision and emphasised that the pandemic did not alter the legal test which is applied when considering whether a dismissal is unfair: an employer is expected to consider alternatives to redundancy, including the possibility of furlough.

What does this mean for employers?

Whilst this may be a concerning finding for employers who proceeded with redundancy dismissals when the CJRS was still open, it was decided on its own facts and does not mean that every such dismissal was unfair.  It is however a reminder that employers should always give due consideration to any potential alternatives to redundancy dismissals.