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Case Update: Furlough Scheme and Redundancies

13 Aug 2021

Two recent employment tribunal cases have provided helpful guidance on making redundancies during the operation of the Coronavirus Job Retention Scheme (CJRS). Although the decisions of employment tribunals aren’t legally binding on other tribunals, they provide a helpful indication of the decisions tribunals are likely to reach.

Case A: a tribunal found that the claimant was unfairly dismissed when her employer refused to consider furlough and made her redundant. The tribunal accepted that there was a genuine redundancy situation, since the work that the employee was employed to do had diminished. However, the whole purpose of the CJRS was to avoid redundancies. Therefore, a reasonable employer would have considered furlough as an alternative to redundancy. It was significant that the employer could not explain why furlough was not even considered.

Case B: in this case the Claimant was furloughed by his employer under an agreement which stated that furlough would last “for a period of up to 3 weeks initially or until you can return to work as normal”. The Claimant brought a claim for unfair dismissal, arguing that the furlough agreement prevented his redundancy. The employment tribunal disagreed. It accepted that the employer needed to cut costs irrespective of the CJRS.

Corona redundancies

Although another employer may have chosen to leave the employee on furlough for longer, the tribunal found that it was not unfair of the employer not to do so. Further, the decision to dismiss despite the existence of the CJRS did not render the dismissal unfair.

Although these cases may seem inconsistent, they confirm that tribunals expect employers at the very least to have considered furlough when contemplating redundancies and to have made an assessment as to why redundancies were still needed regardless of the existence of the CJRS. Case B also confirms it is not necessarily unfair to make an employee redundant while the CJRS exists.

The CJRS is of course scheduled to come to an end on 30 September 2021. Should you require support with the implications of this on your business, please do not hesitate to contact the team.