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04 September 2020

Furlough scheme closure creates potentially discriminatory redundancies

3 mins

The lateness and urgency caused by the lockdown and Coronavirus Job Retention ‘Furlough’ Scheme (CJRS) meant employers needed to act quickly, sacrificing procedure, when deciding who was to be placed on furlough.  This led to a disproportionate impact of the CJRS, most notably on women.   Now, as Furloughs become redundancies, it is important that this inequality is not allowed to infiltrate redundancy processes causing discriminatory dismissals.

A number of recent studies have indicated that women were disproportionately more likely to be furloughed than male colleagues as employer’s responded rapidly to the implementation of the CJRS.  Some of the reasons for this will be discriminatory, some will not.  There have been some very sad stories about employers seemingly unilaterally deciding that it would be better for female employees to be on furlough to look after the family, and other archaic false tropes like that.  Others, potentially,  will relate to a reduction in demand in areas that have more female employees.

In less clear-cut cases, the fact that employers had little time to implement procedures to determines furloughed staff will swing both ways under the Equality Act 2010.  On the one hand, it means that discrimination is likely to be more prevalent, as studies have suggested.  On the other, the employer can place the urgency of the situation at the centre of any defence to an indirect discrimination claim. 

The other advantage for an employer is that unless the employee is highly paid, the damage caused by any discriminatory treatment to the employee is likely to be low if they are brought back into the fold after furlough.  Therefore running a complex discrimination claim is not going to be practical for many employees.  This is a disappointing aspect of the current system of discrimination legislation and enforceability.

There was a rather big ‘if’ in the above paragraph, and that is if the employee is returns to full-time employment at the conclusion of the furlough period.  If they are not, and the employer pursues redundancies, then there is scope for any dismissal to be discriminatory.  Discriminatory dismissals often do attract the potential level of damages that can make litigation a more practical option for employees.  A significant factor in this is that damages for discriminatory dismissal are uncapped.

To reduce the prospect of discrimination, employers should exclude the period of furlough from consideration any subsequent redundancy process.  They should also think very carefully about re-using the justification that led to the decision to furlough that particular person as part of any dismissal as this could be reaffirming the same discriminatory process.    

Employees should ensure that during consultation, employers are challenged on these issues.  Any link between furlough and selection for redundancy or proposed restructure should be sought out and raised as part of the process.  It should be noted that this should be raised irrespective of the employee’s gender. 

If an employer fails to heed these warnings, and furlough is used to determine future employment, then there may be grounds for legal claims.

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