Workaround for sorting and filtering of merged cells

First step: Unmerging all merged cells

   1.   Select all cells in the worksheet.

A quick way to do so is to click the triangle at the intersection of the row headers and column headers:

   2.   On the Home tab, in the Alignment group, click Merge & Center:

When you click this button, all selected cells in the worksheet will be merged.

NOTE: If Merge & Center button isn't highlighted, there are no merged cells.

Second step: Filling the Gaps in a Sheet

   3.   Select the range that has the gaps.

   4.   On the Home tab, in the Editing group, choose the Find & Select drop-down list and then click Go To Special...:

   5.   In the Go To Special dialog box, select the Blanks option and click OK:

This action selects the blank cells in the original selection.

   6.   On the Formula bar, type an equal sign (=) followed by the address of the first cell with an entry in the column (=B7, in this example) and press Ctrl+Enter:

   7.   Reselect the original range and press Ctrl+C to copy the selection.

   8.   On the Home tab, in the Clipboard group, choose the Paste drop-down list and then click Paste Values to convert the formulas to values:

After you complete these steps, the gaps are filled in with the correct information. Now it's a normal list, and you can do whatever you like with it - including sorting, filtering, etc.