Employer’s failure to consider furlough as an alternative to redundancy amounts to unfair dismissal

While furlough may feel like a distant memory, there are still important judgments filtering through the Employment Appeal Tribunal. The case of Lovingangels Care Ltd v Mhindurwa reminds employers of their duty to consider alternatives to dismissal in cases of redundancy.

In this case, the Claimant worked as a live-in carer. In early 2020, the person the Claimant was providing care for went into hospital. As the pandemic significantly reduced the need for the same number of live-in carers (and therefore there was no alternative role to move her to) the Claimant was made redundant.
During her redundancy consultation, the Claimant had asked to be placed on furlough leave instead of being made redundant. However, this was refused by her employer and she was dismissed by reason of redundancy.

At first instance, the Tribunal noted that the purpose of the Coronavirus Job Retention Scheme was to avoid laying off employees during the pandemic. The Tribunal considered a reasonable employer would have considered furlough as an alternative to dismissal, and that the Respondent had failed to do so. The Claimant’s claim for unfair dismissal was therefore successful.

The Respondent appealed this decision. However, upholding the Tribunal’s original decision, the Employment Appeal Tribunal stated the pandemic had not altered the legal tests to be considered in a claim for unfair dismissal as the law of unfair dismissal was “robust enough to deal with such exceptional circumstances”. There was nothing about the pandemic or the Coronavirus Job Retention Scheme that required special analysis and therefore the Tribunal had been entitled to conclude that the possibility of furlough ought to have been properly considered by the Respondent as an alternative to dismissal.

Reminder of employers’ responsibilities

So what is so notable about this case? Well, in a way nothing. This case does not change the law, but it does serve as an important reminder of an employer’s duty to consider alternatives to dismissal in cases of redundancy.

Employers remain obliged to consider alternatives to dismissal in redundancy situations in order to establish that the dismissal was fair. For dismissals arising during the operation of the Coronavirus Job Retention Scheme, furlough was a possible alternative and ought to have been considered but need not necessarily have been implemented. Whether it was a reasonable alternative will depend on the circumstances. Therefore it is not to say that any employer who failed to utilise the Coronavirus Job Retention Scheme will be on the hook for an unfair dismissal, but depending on the facts of the case, this is a possible outcome.

This case is an important reminder of the need for employers to carefully consider all reasonable alternatives when a potential redundancy situation arises, even in exceptional circumstances.

To speak to us about your employment issues, please contact Angie Crush on 020 7377 2829 or email [email protected].