Not furloughing as an alternative to redundancy - Fair or unfair?

Cases relating to furlough and redundancy are filtering through the Employment Tribunals now, and because of their significance we’re all watching what happens closely, even in first instance, non-binding decisions.

Mhindurwa v Lovingangels Care Limited

Ms Mhindurwa provided live in care but in February 2020 that person moved into hospital, then a care home. Her employer had no other work for her as a result of the pandemic and Ms Mhindurwa asked to be furloughed, which they refused. In May 2020 put her at risk of redundancy, offering her domiciliary care as an alternative, which she chose not to accept as she would have to travel too far.

Ms Mhindurwa was dismissed, her appeal was effectively a rubber stamping of the original decision, and she brought a claim in the Employment Tribunal for unfair dismissal.

The Judge found that the employer had failed to handle the appeal adequate, and failed to properly consider furloughing Ms Mhindurwa as an alternative to redundancy.

The judge stated: “this was the type of situation that the furlough scheme envisaged. Why it was not considered or not considered suitable in this case is not explained by the respondent”.

Handley v Tatenhill Aviation Ltd

Mr Handley was a flying instructor and as a result of the pandemic, the flying school has to lose. Even when it could reopen there would be a reduced demand for flying lessons. Mr Handley was initially furloughed, but his employer was concerned about the scheme ending and not being able to afford to continue his employment.

Tatenhill decided to make Mr Handley redundant, using the furlough scheme to fund his notice (which was allowed at that time). The Tribunal found issues with the procedure used but ultimately decided that Mr Handley would have been dismissed regardless, so no compensation was awarded.

The Judge said: “The nation was in unprecedented uncertainty at the relevant time, and it is not for me to step into the shoes of the employer and substitute my view for that taken by the employer at the time. The decision to dismiss [Mr Handley] notwithstanding the existence of the furlough scheme does not, in my view, render the dismissal unfair.”

What do these decisions mean?

Two different decisions on very similar scenarios may not seem helpful, but a distinction can be seen in the thought process and the approach of the employers.

In the former case, the employer failed to consider or explain why it couldn’t have used the furlough scheme instead of redundancy. In the latter case, the employer was able to demonstrate that it did consider using the scheme and the reasons why it decided on redundancy as the most appropriate option.

Although these decisions won’t be binding on other Tribunals, they do give some helpful pointers to employers as to how similar cases might be decided.

The furlough scheme is soon coming to an end and in some cases redundancy decisions and dismissals may have already happened – but if you do face a claim these outcomes might at least help you decide on tactics in managing those claims.