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We are starting to see a number of Employment Tribunal decisions in unfair dismissal claims in relation to the government furlough scheme, some of which have surprising outcomes.
In the recent case of Handley v Tatenhill Aviation Ltd, the Tribunal found that an employee, who was on furlough, was not unfairly dismissed simply because his employer decided to make him redundant, rather than choosing to furlough him for longer.
In this case, Mr Handley worked for a small private airfield providing private flying lessons and flight experiences. In March 2020, Tatenhill Aviation Ltd decided to close the flying school, and furloughed staff, including Mr Handley, for 'a period of three weeks initially or until [he] could return to work as normal'.
Tatenhill had been struggling financially pre-pandemic and, in April 2020, it began to consider redundancies. The flight training aspect received little to no income, and Tatenhill Aviation Ltd expected that this would remain the case for the foreseeable future.
As Mr Handley was a flying instructor, he was selected for redundancy and his employment ended on 10 August 2020.
Mr Handley claimed that he had been unfairly dismissed for a number of reasons, including that he had been placed on furlough, and that the terms of the furlough agreement prevented his employer from making him redundant. The Tribunal dismissed this part of his claim.
The Tribunal went on to say that, whilst another employer may have taken a different approach and may have chosen to leave Mr Handley on furlough for longer, the decision Tatenhill reached was within the range of reasonable responses open to it, and it was not open to the Tribunal to substitute its own decision.
The judge accepted that Tatenhill needed to cut costs irrespective of the furlough scheme, and that it wanted to use the furlough scheme to pay some of the costs of making the redundancy. The judge added that, because the nation was in unprecedented uncertainty at the relevant time, the decision to dismiss the claimant notwithstanding the furlough scheme did not render the dismissal unfair.
This decision appears to contrast with the decision of an Employment Tribunal in the case of Mhindurwa v Lovingangels Care Ltd, where the Tribunal found that an employee, who was made redundant in the early months of the pandemic, was unfairly dismissed because her employer did not consider furloughing her at all.
In that case, Ms Mhindurwa was employed as a care assistant, specifically to provide live-in care for a vulnerable person from October 2018 to February 2020, when that person was admitted into hospital (and then moved into a care home).
In May 2020, Ms Mhindurwa asked her employer Lovingangels Care Ltd to furlough her, but it refused to do so, on the basis that 'there was no work for her'.
Lovingangels then wrote to Ms Mhindurwa to explain that she was at risk of being made redundant, because they could not offer her any more live-in care work due to the restrictions imposed for COVID-19, and that the only work available was domiciliary care.
Ms Mhindurwa rejected the alternative work, and was given notice of dismissal in July 2020 along with a redundancy payment.
She appealed against her redundancy but the appeal manager rejected her appeal.
Ms Mhindurwa issued a claim against Lovingangels, arguing (amongst other things) that she should not have been dismissed but instead should have been furloughed.
The Tribunal accepted that Ms Mhindurwa had been dismissed because of redundancy, but found that her dismissal was unfair, for two reasons:
- the Coronavirus Job Retention Scheme was widely available to employers, to provide financial support to those whose staff could not work because of COVID-19 lockdown restrictions and to avoid them being laid off or made redundant; and
- a reasonable employer would have given consideration to whether the claimant should be furloughed to avoid being dismissed on grounds of redundancy in July 2020.
The judge went on to say that Lovingangels should have considered furloughing Ms Mhindurwa for a period of time to see whether live-in care work would be required in the near future, or whether there was other work she could do.
What do these judgments mean for employers?
Employers should remember that each case is decided on its own facts, and it can be difficult to forecast an outcome in this developing area of the law.
However, these decisions serve as a reminder to employers that:
- if they did not consider furloughing staff as an alternative to redundancy, a Tribunal could decide that their dismissals are unfair; but
- providing that an employer’s decision to make an employee redundant rather that put them on (or extend) furlough is within the range of reasonable responses, a Tribunal may well view the redundancy as a reasonable decision to dismiss.
For further assistance on Covid-19 related, or any other employment matters, please contact our Employment team.