A couple of recent decisions on furlough and redundancy
Two recent employment tribunal cases have provided helpful guidance on making redundancies during the operation of the Coronavirus Job Retention Scheme (CJRS).
In Mhindurwa v Lovingangels Care Ltd the claimant was unfairly dismissed when the employer refused to consider furlough and made her redundant in July 2020. Although the tribunal accepted that there was a genuine redundancy situation (the work the claimant had been employed to do had diminished), the whole purpose of the CJRS was to avoid redundancies. It held that in July 2020 a reasonable employer would have considered furlough as an alternative to redundancy. It was significant that the employer could not explain why furlough was not considered. The dismissal was also procedurally unfair.
Meanwhile in Handley v Tatenhill Aviation Ltd an employment tribunal found that dismissing the claimant despite the existence of the CJRS did not render the dismissal unfair. The claimant was furloughed in April 2020 under an agreement which stated that furlough would last for a period of up to 3 weeks initially, or until the claimant could return to work as normal. The claimant was made redundant in August 2020 and brought a claim for unfair dismissal, arguing that the furlough agreement prevented his redundancy. The tribunal disagreed holding that the employer needed to cut costs and it wanted to use the CJRS to pay some of the costs of the redundancy. Although another employer may have chosen to leave the claimant on furlough for longer, it was not unfair of the employer not to do so. The decision to dismiss despite the existence of the CJRS did not render the dismissal unfair. Although there were irregularities in the dismissal process which meant that it was procedurally unfair, as there was a 100% chance of the claimant having been made redundant if a fair procedure had been followed no compensation was awarded.
Take note: These decisions emphasise that the CJRS was introduced with the express purpose of avoiding redundancies due to the pandemic. Those employers who made employees redundant without considering furlough first are unlikely to be successful when it comes to defending an unfair dismissal claim. However, the decision in Handley also acknowledges that furlough is not an indefinite solution, and if the employer ultimately decides to make an employee redundant rather than keeping them on furlough this will not, of itself, render the dismissal unfair.
For further discussion of these cases, together with other recent Covid-19-related decisions please tune into our Trowers Tuesday next week - click here.