Redundancy and the duty to consider furlough
An employee made redundant in the early months of the COVID-19 pandemic was unfairly dismissed because her employer hadn’t considered furloughing her as an alternative to redundancy.
Ms Mhindurwa worked as a care assistant providing live-in care for an elderly woman until in February 2020 the lady was moved into a care home. In May 2020 she asked to be furloughed; her employer refused on the basis that they couldn’t offer her any more live-in care work due to the restrictions imposed to control the spread of the virus. In July 2020 she was dismissed for redundancy. She brought various claims, amongst which was one for unfair dismissal.
Her unfair dismissal claim was upheld. The principal reason for this was that the judge held that ‘in July 2020 a reasonable employer would have given consideration to whether [she] should be furloughed to avoid being dismissed on grounds of redundancy’. Her employer had no live-in work available and could only offer her domiciliary work which wasn’t suitable because of the travelling involved. The judge commented that ‘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 employer. Although her employer had no work for her at the time of the dismissal, it had no way of knowing if that was going to change and didn't consider whether she should be furloughed for a time to see if any other work became available. The employer appealed.
The appeal was dismissed.
The tribunal concluded that the dismissal of Ms Mhindurwa was unfair because of a failure properly to consider the possibility of furlough for a period to allow for the possibility that it would become easier for live-in carers to move to care for people in need of their assistance, and that the employer would obtain such clients. The decision was not that the employer was required to furlough Ms Mhindurwa, but that it should properly consider the possibility. This it had been entitled to do.
In considering a dismissal by reason of redundancy, an employer will generally be expected to consider alternatives to dismissal. The tribunal had applied the same approach to furlough as it would have applied to any possible alternative to dismissal that an employer might, in appropriate circumstances, have been expected to have considered if acting reasonably.
The EAT also commented that the COVID-19 pandemic did not require an alteration to the legal tests to be applied when deciding a claim of unfair dismissal, i.e. there was no special approach that tribunals should have adopted to dismissals occurring in the context of the pandemic. The EAT acknowledged that the circumstances of the pandemic were extraordinary but considered that the law of unfair dismissal was robust enough to deal with them.
This is a warning to employers that if they did not consider alternatives to dismissal, including furlough, then this may be an unfair dismissal – something that we warned about at the outset. In the early stages of the furlough scheme the cost was neutral to an employer, with one uncertainty which was whether employees could be asked to take holiday when on furlough. This was the only potential cost to an employer of continuing to have employees on the books.
There will be a difference between an employer who says, ‘I considered the furlough scheme but discounted it because we knew we were no longer doing that work’ and one who said ‘I did not furlough my employee because I did not know what the future would look like with COVID. The former is likely to be fair; the latter, based on this decision, unfair. That was the whole point of the scheme, to tide employers over during the uncertainty.
As the EAT said, the law of unfair dismissal is robust enough to deal with these unusual situations.