Was it risky to make a furloughed employee redundant?
Many employers faced issues during the last two years when considering redundancies while furlough remained an option. Employees may have argued that they ought to have been furloughed rather than made redundant. Two recent cases on this matter have highlighted the requirement to be able to show the reasoning behind decisions.
The Employment Courts have come to slightly different conclusions on this matter.
In Mhindurwa v Lovingangels Care Limited the Employment Tribunal held that an employee made redundant in the early stages of the COVID pandemic was unfairly dismissed as her employer failed to consider furloughing her.
In Handley v Tatehill Aviation Limited, an employee brought a claim that, among other things, his employer could have furloughed him for longer. This element of the claim was dismissed.
In Mhindurwa v Lovingangels Care Limited, the employee argued that she should have been placed on furlough and was informed this was not possible as there was no work for her. An appeal was held to be a mere “rubberstamping” of the original decision.
In Handley v Tatehill Aviation Limited, the Court held that while another employer may have decided to retain the employee on furlough for longer, the decision taken was within the range of reasonable responses.
‘It is for an employer, not the Employment Tribunal, to decide how to structure its business and whether to make redundancies. I accept the respondent’s evidence that it 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 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 the claimant notwithstanding the existence of the furlough scheme does not, in my view, render the dismissal unfair.’
It would seem to appear from these cases that the Tribunal may decide that a dismissal is unfair where furlough has not been considered as an alternative to redundancy but will not interfere where the decision was within the range of reasonable responses open to the employer.
These cases again show the necessity both of keeping records of reasons for decisions, and of ensuring redundancy procedures are comprehensive.
For any help or advice please our expert Wendy Davison – [email protected] or call her on 01328 852831.