Over a year after the introduction of the UK’s Coronavirus Job Retention Scheme (the Scheme), employment tribunals are making decisions on unfair dismissal claims involving the Scheme. Two recent rulings show that tribunals will consider whether a decision to dismiss, rather than to furlough, fell within the range of reasonable responses.
Failure to consider furlough: unfair dismissal
In Mhindurwa v Lovingangels Care Limited, a care worker who provided live-in care was dismissed on the ground of redundancy. The employer’s requirements for live-in work had significantly diminished due to the coronavirus pandemic and there was no other kind of work the claimant could take on within a reasonable distance of her home. The claimant asked to be furloughed, but her employer rejected this on the basis that there was no work for her. She was offered an appeal, but the tribunal found it was a rubberstamp exercise rather than a proper appeal.
An employment tribunal found this dismissal fell outside the range of reasonable responses. Whilst there was a genuine redundancy situation, the tribunal found that a reasonable employer would have considered whether the claimant should be furloughed as an alternative to immediate dismissal. Doing so would have given the employer time to monitor any change in the availability of live-in care work. This failure to consider furlough in the redundancy consultation, and the lack of a reasonable explanation for it, combined with the failure to offer a proper appeal, rendered the dismissal unfair.
No further furlough considered: potentially fair dismissal
Handley v Tatenhill Aviation Limited offers an interesting contrast to the Mhindurwa case. The Handley case also involved a dismissal on the grounds of redundancy. The claimant was employed to provide private flying lessons and flying experiences, but the business had been struggling prior to the pandemic and inevitably the pandemic had a detrimental impact on the business and its cash flow. Throughout the redundancy consultation process, the claimant was on furlough and did not suggest any alternatives to redundancy or alternative work he could perform for his employer.
The key issue before the tribunal was whether there was a genuine redundancy situation. There was minimal discussion around whether the employer should have considered extending the furlough. In fact, the employer did not appear to have considered whether to keep the claimant on furlough. This lack of consideration, however, did not render the dismissal unfair.
The dismissal was ultimately unfair due to procedural issues. For example, the claimant was chosen for redundancy even before the consultation process started. Interestingly, the tribunal found that following a fair procedure would not have led to a different result – even the claimant admitted that he would have chosen to retain someone else. As a result, even though the claimant was dismissed unfairly, he received no compensation.
What do these cases mean practically?
With the Scheme ending on 30 September, furloughing will not be an alternative to dismissal for much longer. So, while the Scheme will soon be irrelevant for future redundancy processes, the decisions give a useful indication of how a tribunal might view a redundancy implemented during the currency of the Scheme. They show that tribunals may expect employers to have considered furlough as an alternative to dismissal even if only on a temporary basis. A failure to consider furlough, or to explain adequately why furlough was rejected, is likely to mean a greater risk of a dismissal being unfair.
In the context of the pandemic and furlough, the tribunal will also look at the reasons why a redundancy situation has arisen. If the employer was experiencing financial difficulties, or a reduction in business, prior to the pandemic this may lead to a different outcome when compared to a situation where the business issues were caused by the pandemic.
The decisions also remind us that, with the range of reasonable responses test, two employers can reach quite different decisions yet both may fall within the range of reasonable responses. Defending a claim will be much easier for an employer who follows the ACAS code, considers alternatives (particularly any put forward by the employee) and demonstrates a clear rationale for the decisions it took. The Mhindurwa case is also a timely reminder of the importance of conducting a fair appeal process.
