Partner Sue Dowling, head of our Employment Law team, looks at whether employees can claim for unfair dismissal and/or unlawful discrimination during or at the end of furlough leave.
Workforce restructurings and the "new normal"
Unfortunately, with the economic downturn caused by the COVID-19 pandemic, many employers are now reviewing whether it may be necessary to reduce the size of their workforce and/or to restructure their workforce/job roles, to ensure that the organisation remains viable going forward. Whilst the Government’s extended "Furlough Scheme" will now continue until 31 March 2021, many employers are already taking steps to restructure in order to survive the pandemic and to ensure that their business models are fit for purpose given the "new normal".
Where an organisation wishes to reduce its workforce, or to restructure it, a whole host of considerations and procedures should first be undertaken to ensure that the employment rights of individual employees are not breached.
Whilst redundancies and/or restructuring can be implemented lawfully (avoiding liabilities for example for unfair dismissal and/or unlawful discrimination), employers have to comply fully with a number of employment statutes (in particular the Employment Rights Act 1996 (ERA 1996) and the Equality Act 2010), as well as complying with contractual law and common law principles. Where proposed redundancies (including possible variations to contractual terms – such as pay reductions) may involve 20 or more employees, additional statutory requirements relating to collective consultation may also be applicable.
An employer is not prevented per se from implementing redundancies/restructuring whilst employees are on furlough leave (or partial furlough leave), and may be able to avoid liabilities for unfair dismissal (from employees with more than two years’ service), by relying on the potentially ‘fair’ reasons for termination of employment including “redundancy” and/or “some other substantial reason” justifying dismissal (under the ERA 1996).
However, employers have to act in a way that complies with the ‘catch-all’ reasonableness provisions under the same Act. Even where an employer is able to establish a potentially ‘fair’ reason, an Employment Tribunal (in a case of unfair dismissal) will still go on to determine whether or not the dismissal was “fair or unfair... (and this will) depend on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating (the reason of redundancy/restructuring) as a sufficient reason for dismissing the employee, and (this) shall be determined in accordance with equity and the substantial merits of the case.”
Unlawful discrimination and an employee's “protected characteristics”
In some cases, an employee may have also have a claim for compensation under the Equality Act 2010, if the decision to terminate his/her employment for redundancy was in fact tainted by unlawful discrimination relating to “protected characteristics” (for example, disability, sex, race etc).
If you have been informed that your role is at risk of redundancy, or that you may lose your job through a restructuring of the workforce, you should consider taking specialist employment law advice. Whether or not you may have viable claims for compensation will largely depend on the specific facts relating to your particular case and we can advise you on your individual position, once appraised of the full facts. Factors which may be of relevance might include:
- Whether all staff on furlough leave were automatically selected for redundancy including you;
- Whether there was any meaningful consultation with you before the decision to make your role redundant was made;
- If your role is selected for redundancy applying artificial criteria – for example when an employer labels your role to be “unique” and no longer required by the company, but in reality, you have duties; skills and abilities which are very similar to other colleagues;
- If your role is selected for redundancy by your employer applying criteria which are fundamentally biased; discriminatory; or perverse; or applies scores to criteria adopting a flawed approach, not supported by genuine facts;
- The facts suggest that you have lost your job due to your age; race; sex; due to a disability (a reason related to a disability for example sickness absence); due to being on/returning from maternity leave or being pregnant or due to other reasons which have a basis in unlawful discrimination;
- You have been selected for redundancy due to raising legitimate concerns about your workplace; work practices or due to having raised a grievance or concerns about the actions of others.
- You were not considered for vacancies at the organisation for which you were suitable;
- The consultation process was a “rubber-stamping” exercise, with your employer ignoring your viable suggestions (such as part-time options at a reduced salary) to avoid the loss of your role.
You may also find our blog articles, ‘Redundancy FAQs – A Guide for Employees’ and 'What is a Settlement Agreement and What Should It Contain?' and ‘What Are An Employee's Protected Characteristics’, useful.
For further information or legal advice, please contact firstname.lastname@example.org or call 0118 951 6800.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.