Constructive dismissal after employer claimed furlough while employee worked full-time
A senior sales consultant who was placed on furlough without his knowledge and continued working full-time has won his constructive dismissal claim. The tribunal found the employer's actions breached trust and confidence.
1 min read · Last updated 18 May 2026
Case details
- #constructive-dismissal
- #furlough-fraud
- #implied-trust-and-confidence
- #last-straw
- #payslip-inaccuracies
Key facts
- The claimant was a senior sales consultant employed by the respondent from 3 February 2020.
- From October 2020 to March 2021, the respondent claimed furlough payments for the claimant while he continued to work full-time hours.
- The claimant was not informed he was on furlough and only discovered this when he requested payslips in December 2020.
- The respondent provided inaccurate payslips showing the claimant on furlough, which affected his ability to obtain a mortgage.
- The claimant resigned on 30 March 2021, citing the furlough issue as the main reason.
- The tribunal found the respondent breached the implied term of trust and confidence, resulting in constructive dismissal.
Timeline
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Claimant proposes commission structure
Claimant sent a proposal to Mr Slee outlining a tiered commission structure.
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Respondent makes counter-offer
Mr Slee emailed the claimant an offer of employment with a salary of £45,000 plus vehicle allowance and a discretionary bonus scheme.
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Claimant starts employment
Claimant commenced employment as a senior sales consultant.
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Claimant placed on full-time furlough
Claimant was placed on full-time furlough due to COVID-19; he received full salary via top-ups.
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Claimant returns to work
Claimant returned to full-time working after COVID restrictions eased.
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Claimant placed on furlough without knowledge
Mr Slee placed the claimant on 80% furlough without informing him; claimant continued working full-time.
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Claimant requests commission discussion
Claimant emailed Mr Slee requesting a discussion about commission; Mr Slee did not respond.
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Meeting about commission
Claimant met with Mr Slee to discuss commission; Mr Slee refused to pay and the meeting became heated.
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Phone call about payslips
Mr Slee informed claimant he had been placed on furlough; claimant discovered the furlough issue.
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Claimant confronts Mr Slee
Claimant raised concerns about being on furlough while working; Mr Slee refused to change the situation.
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Claimant receives inaccurate payslips
Claimant received January and February 2021 payslips showing him on furlough when he was working full-time.
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Claimant resigns
Claimant resigned with immediate effect, citing the furlough issue as the main reason.
The legal issue
The tribunal had to decide whether the employer's conduct in placing the employee on furlough without his knowledge, while he continued to work, amounted to a fundamental breach of contract entitling him to resign and claim constructive dismissal.
The outcome
The tribunal found that the claimant was constructively dismissed. The employer had breached the implied term of trust and confidence by claiming furlough payments for the claimant while he worked full-time, and by providing inaccurate payslips. The claimant resigned in response to this breach.
Compensation is to be determined at a separate hearing, but will include notice pay and holiday pay. The claimant's claim for unpaid commission was dismissed, and a claim for underpaid March 2021 salary was stayed pending settlement.
Lessons & takeaways
- Employers must not claim furlough payments for employees who are working – this is a clear breach of trust and can amount to constructive dismissal.
- Providing inaccurate payslips, especially when it affects an employee's ability to obtain a mortgage, can be a 'last straw' justifying resignation.
- Employees with less than two years' service cannot claim ordinary unfair dismissal, but can still claim constructive dismissal if the employer's breach is fundamental.
- A single serious breach of the implied term of trust and confidence can be enough to resign and claim constructive dismissal – it does not require a series of events.
The human story
This case highlights the serious consequences of an employer misusing the Coronavirus Job Retention Scheme. The senior sales consultant, who had been employed since February 2020, was placed on furlough from October 2020 without his knowledge. He continued to work full-time hours while the employer claimed government subsidies. When he requested payslips in December 2020, he discovered the discrepancy – and the inaccurate payslips later affected his ability to get a mortgage.
The claimant raised his concerns with the managing director, but the situation was not resolved. He eventually resigned in March 2021, citing the furlough issue as the main reason. The tribunal found that the employer's conduct was calculated to destroy the trust and confidence between them.
What the employer could have done differently
The employer could have avoided this outcome by being transparent about furlough arrangements. If the claimant was needed to work, he should not have been placed on furlough. If there was a legitimate need to vary his hours, this should have been agreed in writing. Providing accurate payslips is a basic legal obligation – inaccurate ones not only breach trust but can cause real-world harm, as seen here.
Why this matters
This case is a reminder that the implied term of trust and confidence is a powerful protection for employees. Even those with less than two years' service – who cannot claim ordinary unfair dismissal – can bring a constructive dismissal claim if the employer's breach is serious enough. The misuse of furlough funds is not just a matter for HMRC; it can also give rise to employment tribunal claims.
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