InsightsInsight - Employment & HR - POSTED: September 1 2021
Redundancy and the impact of furlough
Key questions an employer may have in light of the furlough scheme coming to an end
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We are beginning to see the issue of furlough appearing in the employment tribunal. Judges are now having to decide whether an employee should have been furloughed (or left on furlough) rather than made redundant.
With the furlough scheme finishing on 30 September 2021, this article covers some key questions you may have if you are an employer considering the difficult decision of whether to make redundancies within your organisation when the scheme comes to an end.
Should I have considered furlough for any employees who may be made redundant?
In the recent case of Mhindurwa v Lovingangels Care Ltd, the tribunal found that the claimant, a care assistant employed by Lovingangels Care Ltd, who was made redundant in the early months of the pandemic, was unfairly dismissed because her employer hadn’t considered furloughing her.
The judge decided that a reasonable employer would have considered furlough as an alternative to redundancy. It is worth bearing this decision in mind, as it appears that employers facing similar claims will need to provide a good explanation as to why furlough was not considered, or not considered suitable.
The purpose of furlough was always meant to protect jobs impacted by the pandemic. That said, many commentators have voiced that the scheme should not be used to preserve jobs which would not otherwise be sustainable.
Can I make furloughed employees redundant?
Despite the need to consider furlough as an option when making redundancies, you can choose to make a furloughed employee redundant.
This issue was considered in a recent case, Handley v Tatenhill Aviation Ltd. The tribunal ruled that an employee, who was supported under the furlough scheme, was not unfairly dismissed because his employer made him redundant, even though his employer could have chosen to have extended his furlough leave.
The judge accepted that the employer needed to cut costs at that time and that the statutory definition of redundancy was met.
What if there is a future need for the furloughed employee?
The case mentioned above, Handley v Tatenhill Aviation Ltd, sheds light on this issue. In this case, the tribunal decided that an employer that may need an employee in the future in a similar role to that being made redundant, was not necessarily required to keep that employee on furlough pending.
Both cases also highlight the need to follow a fair procedure when making an employee redundant.
Overall, these recent cases suggest it is not unfair to choose redundancy over furlough and an employer is not prevented from making a furloughed employee redundant.
However, it is an area that should be handled delicately and may require further consideration of whether furlough should continue as an alternative to redundancy.
If you are looking to make redundancies and would like further information on the impact of furlough, then book a free 30-minute initial consultation with a member of the Brachers Employment team, at a time that suits you.
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