Employment tribunal and court judgments | August 2021

Employer should have considered furlough prior to redundancy

In the case of Mhindurwa v Lovingangels Care the employment judge held that employers have a duty to actively consider furlough when making someone redundant, and the absence of a reasonable explanation for not furloughing in this case, made the dismissal unfair.

The Claimant was a care assistant with just over two years’ employment at the time of dismissal. The Claimant's role was effectively made redundant at the point that the person she cared for was moved into a care home. The Claimant had asked to be furloughed during May 2020 but was refused with the reasoning that there was no work for her and was made redundant in July by the Respondent.

It was held that the dismissal was unfair and that a reasonable employer would have considered furloughing the employee to avoid dismissal on the grounds of redundancy. It was also held that despite the Respondent not having any work for the Claimant at the relevant time, there was no certainty this would not change, and furlough would have been an option to bide some time in this respect.

Separately, it would in fact have been legally impossible for the employer to furlough this employee, as they had not previously been furloughed. This was a requirement under the extension to the scheme on 29 May 2020 where only previously furloughed employees were able to be furloughed. However, it is likely that the tribunal considered the Claimant had asked in May, when it was possible to furlough, and applied the reasoning based on that fact.

It is currently possible to furlough people now for the first time (another rule change since May 2020) so the decision is still relevant. At present, furlough is due to end on 30 September 2021, so we would recommend factoring this in when considering any redundancies.

Employer not obliged to continue to furlough staff

The case of Handley v Tatenhill Aviation Ltd reached an alternative conclusion to the decision made in Mhindurwa v Lovingangels Care Ltd above.  Here it was found that an employee that was placed on furlough near the start of the pandemic was not dismissed unfairly by reasons of not being kept on furlough (the dismissal was found unfair for procedural reasons). The company placed Mr Handley, a flight instructor for a small business, on furlough for an initial period of 3 weeks and then began the redundancy process during this time.

Mr Handley was selected for redundancy as the company decided this was necessary due to financial difficulties, irrespective of the furlough scheme, which it intended to use to pay some of the costs of redundancy. Mr Handley was dismissed by reason of redundancy and brought a claim for unfair dismissal, claiming his furlough agreement prevented his redundancy.

The tribunal accepted that the company needed to cut costs and although another employer may have left the employee on furlough for a longer period, it was not unfair for the employer in this case to not do so.

It is important to remember that when comparing cases, each will turn on their own facts and there is no certainty as to the outcome. The above case does, however, offer some comfort to those employers that did not use the furlough scheme indefinitely during the pandemic.

Constructive dismissal is capable of constituting section 26 harassment

In Driscoll v 1) V & P Global 2) Varela the Employment Appeal Tribunal (EAT) held that where an employee resigns in response to repudiatory conduct which constitutes or includes unlawful harassment, their constructive dismissal is itself capable of constituting an act of harassment, contrary to sections 26 and 40 of the Equality Act 2010, overturning its previous 2015 ruling.

Ms Driscoll resigned from working for V&P after four months of employment claiming that comments made by the CEO amounted to harassment, which resulted in her leaving. Initially, the tribunal struck out her claim stating that constructive dismissal could not amount to an act of harassment in itself, as a result of previous case law (Timothy James Consulting v Wilton) and stating that a claim cannot be made under s.26 of the Equality Act 2010.

However, the EAT found that upon analysis of European law, taking account of European directives, there was a mistake in the findings from Wilton. Ms Driscoll argued that the directives see harassment as a species of discrimination and expressly included dismissal as a detriment to which protection under the Equal Treatment Directive; Equal Treatment Framework Directive; and Race Equality Directive applies.

Despite Brexit, the provisions in the Equality Act relating to harassment do need to be construed to conform to EU law and therefore constructive dismissal could amount to a discriminatory act (and this can also apply to a disability claim).