Furlough and Redundancy

If you’re being made redundant while on furlough, or shortly after returning, we can offer advice to help you:

Make sure you are being treated fairly

Understand your redundancy rights, and how they are affected by furlough

Find out if you have a claim for unfair dismissal, and get support in making your claim

Understand any settlement agreement you are offered

Get advice

Man in mask elbow bumping woman sat at desk using the computer, also wearing a mask

Can I be made redundant while on furlough?

Your employment rights, including your redundancy rights, are not affected by furlough. You can be made redundant, but you still have the same rights to consultation, a fair process, and redundancy pay.

Is my employer allowed to make redundancies?

Sadly, the pandemic has challenged many businesses financially, and it is likely that some companies will need to make cuts. Your employers should first consider other options to avoid compulsory redundancy, such as redeploying staff or offering job shares.

You should genuinely consider any alternative roles offered. These options may not be ideal, but might be better than redundancy. It could be more difficult to prove that your redundancy was unfair if your employer can show they have offered alternatives that were not accepted.

It is not clear whether employers have to consider furlough as an alternative to redundancy, but this is likely to depend on circumstances. There are costs to keeping employees on furlough (employers must still pay employees’ National Insurance and pension contributions, and a part of their wage). If your employer knows that your role will not be needed at the end of the furlough scheme, it is unlikely they would be expected to keep paying these costs to delay the redundancy.

Can I be involved in the consultation process while I am furloughed?

While you are on furlough, you still have the right to be included in consultation and accompanied by a colleague or trade union representative. Employees who are union or employee representatives can represent colleagues even if they are on furlough.

If your employer did not hold genuine and meaningful consultation before making redundancies, or did not include you in the consultation, you could have a claim for unfair dismissal.

Can I be selected for redundancy based on the fact I was furloughed?

If your employer chooses to select people for redundancy because they have been on furlough, the process they used to select employees for furlough would need to meet the standards for redundancy selection.

There is also a possibility that the policy could be indirect discrimination. Some companies placed employees on furlough while they were shielding or to help with their caring or parental duties during lockdown. In these cases, selecting candidates for redundancy because they were furloughed could unfairly affect disabled workers, workers who care for disabled people, and female workers (as more women were furloughed than men ), giving grounds for a disability or sex discrimination claim.

Similarly, basing redundancy selection on factors such as unpaid leave, sick days, flexibility or productivity during the pandemic could risk indirect discrimination, as these criteria are more likely to affect certain groups of people.

Although there is no rule that employers can’t use furlough as a ground for redundancy selection, it does increase the chance that you have a legal claim. Get in touch for advice on your specific case.

Will I receive less redundancy pay because I am on furlough?

Redundancy pay is based on your pre-furlough salary, so should not be affected by being on furlough.

If you are entitled to statutory notice pay, this will also be at your normal rate of pay, not your furloughed rate.

What should I do if I've been made redundant during furlough?

Furlough is a new area of employment law, and few cases have been decided. This means it is more important than ever to seek specific legal advice about your circumstances, from somebody with a thorough understanding of employment law.

Get in touch with us for advice about redundancy and furlough

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