Redundancy and the impact of furlough

The furlough scheme came to an end on 30 September 2021 and employers are now looking ahead and considering the future of their workforces. For some, this may include difficult redundancy decisions. What should employers be aware of when considering redundancies post-furlough?

The impact of furlough on the UK labour market has been huge. Furlough has become part of our new COVID vocabulary despite the fact most employers had not heard of it before March 2020.  According to the Treasury, up to the end of July 2021, 11.6 million jobs were furloughed and 1.3 million employers utilised the furlough scheme. At the end of July 2021 1.6 million workers were still on furlough.[1]

Redundancy, furlough and employment tribunal cases

Whilst the furlough scheme was operational, we saw employment tribunal cases being brought on the issues of furlough versus redundancy. In a number of cases,  the employee believed that their employer should have considered the possibility of placing them on furlough leave, as an alternative to redundancy. These included the case  of Mhindurwa v Lovingangels Care Ltd, where 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.

In the case of 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.

Post-furlough challenges for employers

Now that furlough is no longer an option, we seem to be seeing two opposite challenges faced by different sectors of the economy. Some employers are now struggling to recruit, including the logistics, care, manufacturing, food production and hospitality sectors. However, other sectors are now needing to consider redundancies because cash has run out.

How to ensure a successful redundancy process

The successful completion of most redundancy processes are to a large extent dependant on effective planning. Find out how can you make the redundancy process as manageable as possible with our top five tips when considering possible redundancies.

Where large numbers of employees may be made redundant then much more stringent processes need to be followed.

Further support

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. You may also want to consider our options for fixed cost redundancy support.

[1] Chancellor praises workers as Plan for Jobs enters next stage – GOV.UK (www.gov.uk)

This article was first published on 1 September 2021 and has subsequently been updated on 7 October 2021.

This content is correct at time of publication