Navigating the often uncomfortable realm of employee dismissal has long since been a challenge for employers. Of course, employers do not seek out the chance to dismiss workers, as it often results in administrative as well as social awkwardness for them, but it can unfortunately be a necessity.
People losing their jobs is one of the main fallouts of the COVID-19 pandemic, and many actions were taken by the government to try and limit this as much as possible. One of the more prevalent ways of achieving this was the Job Retention Scheme (also known as the furlough scheme).
What we will look at today in this article are the outcomes of two separate cases which both involve the Job Retention Scheme, with employment tribunals taking different stands on whether the respective claimants have been treated unfairly or not by their employers. The different outcomes highlight the fact that there is still some confusion when it comes to this scheme, and that what may be considered just for one person may be considered unjust for the next.
Reminder on the Job Retention Scheme
Furloughing essentially means an employee’s job is put on hold. The Coronavirus Job Retention Scheme has allowed firms to put employees on furlough, meaning they do not work but still get paid by the employer with money provided by the state.
The government has been covering up to 80% of the employee’s wage (up to a maximum of £2,500 per month), and then the employer has had the option to add the extra 20% if they wish, but they do not have to.
It is a grant, not a loan. This means whatever is granted does not have to be repaid. The scheme is due to be entirely phased out by September 2021.
The first case: Mhindurwa v Lovingangels Care Limited
What makes Mhindurwa v Lovingangels Care Limited significant to our article today is the fact that an employment tribunal ruled that the claimant HAD been treated unfairly by her employer due to the fact that they had not considered the option of furloughing her.
To give a background to this case the claimant, Ms Mhindurwa, was working as a care assistant, providing live-in care to a vulnerable person until they were moved into a care home. She fulfilled this role from October 2018 to February 2020. In May of 2020 she requested to be furloughed to which her employer refused, saying that there was no longer any work for Ms Mhindurwa. She was then given a redundancy payment along with a notice of dismissal.
Ms Mhindurwa, after appealing first to her employer to no avail, took the case to an employment tribunal. In her opinion she should have been put on furlough instead of being made redundant.
Fortunately for her, the employment tribunal agreed with her. They found that she had been unfairly dismissed for two reasons. The first was to do with Ms Mhindurwa’s, original appeal which was found to be too quickly dismissed by the employer, who did not attempt to see things from his employee’s point of view.
The second reason is to do with the wide availability of the Job Retention Scheme. It was found that a reasonable employer would have at least given consideration to whether the claimant should be furloughed to avoid being dismissed on grounds of redundancy. The fact that the furlough scheme was set up for situations exactly like the one presented in this case meant that there was little reason for the employer to deny Ms Mhindurwa’s request to be furloughed, and the employer offered no good reason to the contrary.
The second case: Mr. M Handley v Tatenhill Aviation Limited
While in the previous case the employment tribunal saw fit to agree with the claimant, in this second case the reverse occurred. It was found that an employee, who had been supported by the Coronavirus Job Retention Scheme, was not unfairly dismissed because the employer chose to make him redundant even though they could have chosen to furlough him for longer.
This time, the claimant, Mr Handley, worked for a private airfield, where he gave flying lessons and flight experiences to customers. Shortly after the first lockdown, due to a massive decline in business, the airfield worked for, Tatenhill Aviation, closed the flying school and placed Mr Handley on furlough for a three week period, or until he could return to work as normal.
Due to profits being down since before the pandemic, the airfield had already been considering redundancies, and on August 10th 2020 Mr Handley was chosen to be made redundant. He rebuked this by stating he had been put on furlough and that the terms of the furlough scheme meant his employer could not make him redundant.
The employment tribunal chose to dismiss Mr Handley’s claim, due to the fact that the final decision to furlough someone or extend that furlough rests in the hands of the business itself, not an Employment Tribunal. It was further deemed to be reasonable that to cut some costs elsewhere in the business the redundancy was a viable option to the business and therefore not unjust.
What can we learn from these two cases?
The two cases, while similar in terms of both being linked to the furlough scheme, have some important differences which lead to their contrasting outcomes. We can learn from them that where furlough is not even considered by an employer, redundancy as an alternative may be viewed as unfair, as procedurally the employer has failed to take all the relevant options into consideration. Due to the harsh outcomes redundancy brings, it should be the last step an employer can take. Whereas an employer has done so, the decision whether to extend an employee’s furlough will rest within the hands of the company itself, as it is shown in the second case.
The important issue that we can take away is that employment tribunals will always look at the steps taken in the run up to the redundancy, not just at the redundancy itself. We can see from these two cases that the way the employers handled their respective situations were very different, with one having far more reasonable grounds to dismiss their employee than the other, after having carefully considering the potential outcomes of that redundancy.
What we offer in terms of advice for employers thinking about making redundancies is to always consider the options available to you, rather than making a split decision in haste. This will always work out better for employees and employers and makes for a more reasonable conclusion for all involved, where a more favourable outcome may become clear.
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