Unfair Dismissal Cases Arguing Employers Should Furlough Instead Unlikely To Succeed

As the debate over tighter national lockdown restrictions continues, national law firm Irwin Mitchell says it is seeing an increase in the numbers of unfair dismissal cases employees are bringing which allege that their redundancy is unfair because they weren’t offered furlough.

The availability of furlough doesn’t prevent employers continuing restructuring and redundancy plans for a post-pandemic world or require them to put these plans on hold.

Insolvency Service data shows November had the lowest number of planned redundancies since the start of lockdown which suggests that the furlough scheme is being used to keep people in work. However, using the scheme remains at an employer’s discretion.

While employers need to ensure they follow employment law before making staff redundant, a claim for unfair dismissal based on the existence of furlough alone, is unlikely to succeed.

Expert Opinion

“It is important to bear in mind neither lockdown nor furlough has changed basic employment law and employers still have to follow the correct process before making anyone redundant. It’s not for the Employment Tribunal to judge commercial decisions taken by an employer in the best interests of the business. The existence of a furlough scheme doesn’t change that.

“An employer is entitled to restructure to protect the future of their business and help it to recover from lockdown restrictions, the challenges of the pandemic and Brexit.

“It doesn’t have to delay making difficult business decisions just because a temporary subsidy is available. There is no ‘right’ to be furloughed and using the scheme remains at an employer’s discretion.
“I think tribunals are unlikely to agree that employees have been unfairly dismissed, just because their employers haven’t furloughed them. Employers have had to contribute to the costs of furlough in the past and, even under the new scheme, they still have to pay NI and pension contributions so it’s not cost neutral. That said, we recommend that businesses consider whether to use the furlough scheme and explain why they decided against it. That way, if they are challenged, they have contemporaneous evidence they can rely on.

“With the impact of Brexit to factor in and with some areas of the trade deal covered only by a transition period, no business will want to get long-term decisions wrong at this stage." Donna Seferta - Partner