COVID, Furlough and Redundancies – Two Interesting Cases
As we have mentioned recently, a number of tribunal decisions relating to Covid-19 are finally being published and casting some light on the challenges that have been faced by employers in dealing with such an unprecedented period.
The two most recent decisions dealt with redundancies that occurred during the operation of the Coronavirus Job Retention Scheme (or Furlough Scheme).
In the case of Mhindurwa v Lovingangels Care Ltd, the employment tribunal decided that the claimant had been unfairly dismissed when her employer refused to consider furlough and made her redundant in the summer of 2020.
In its decision, the employment tribunal did accept that the employer had a genuine redundancy situation because the work that the claimant was employed to do had reduced. However, the employment tribunal formed the view that the purpose of the Furlough Scheme was to enable employers to avoid having to make employees redundant. As such, the employment tribunal came to the conclusion that, at the time that the claimant was made redundant in the summer of 2020, a reasonable employer would have considered using the Furlough Scheme as an alternative to redundancy. In this particular case, it was notable that the respondent was not able to explain why the Furlough Scheme was not considered as an alternative (even on a temporary basis) to making the claimant redundant.
In the second case of Handley v Tatenhill Aviation Ltd, the claimant was placed on furlough by the respondent in April 2020. The furlough agreement between the claimant and the respondent said that furlough would last ‘for a period of up to 3 weeks initially or until you can return to work as normal’.
The claimant was made redundant a few months later. As part of his unfair dismissal claim, the claimant alleged that the furlough agreement prevented his redundancy.
In contract to the first case, the employment tribunal concluded that the respondent needed to cut costs even though the Furlough Scheme was in place. Also, the employment tribunal concluded that the respondent wanted to use the Furlough Scheme to pay some of the redundancy costs. In the employment tribunal’s view, the decision to dismiss the claimant when the Furlough Scheme was still available did not, of itself, make the dismissal unfair.
However, on the facts of this case, the claimant still succeeded in his unfair dismissal claim because the employment tribunal concluded that mistakes had been made during the dismissal process itself – the decision to select the claimant for redundancy had been taken before the redundancy consultation process had been started and the same person dealt with the initial dismissal and the appeal.
However, the claimant was not awarded any compensation, because the employment tribunal concluded that, even though the dismissal was unfair from a procedural point of view, there was a one hundred per cent chance that the claimant would have been made redundant in any event, if a proper process had been followed.
Although these cases are not considered to be binding (because they have been decided by employment tribunals, as opposed to appeal courts) they are nevertheless interesting in that they demonstrate how different conclusions can be arrived at by different tribunals, based on the specific facts.
If you want to read the Judgements, they can be found by following these links: