October 20, 2021

Volume XI, Number 293

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October 19, 2021

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COVID-19: what next for UK employers, Part 3

We made an employee redundant before the furlough scheme ended – will his unfair dismissal claim succeed?

The basic argument here is an easy one to understand – you made me redundant when you did not have to because my salary was being borne by the CJRS.  In circumstances where employers are duty-bound to consider alternatives to redundancy, leaving me on furlough at someone else’s expense must surely be such an alternative.

After that, it gets a little more complicated.  The employer has no active duty to take any alternative to redundancy, only to consider it and have a not untenable reason for not going down that path.  We previously noted a case where the employer came unstuck because it had not done that.  It was not altogether clear from the judgment there whether the ET found that the employer’s reasons for not putting (or leaving, the point is the same) the employee on furlough were too incoherent to be the product of reasonable thought or that it had not looked at the question at all.  Either way, it lost.  By contrast, have a look at Handley in the same post, where the employer expressly considered whether the at-risk employee could be left on furlough and had viable reasons for deciding not. In fairness, it also lost, but for different reasons.

Potentially relevant factors for an employer to consider at the time of the dismissal could include:

  • Whether and how soon it foresaw any bounce-back of its business and need for employees once the pandemic was “over”.

  •  Its understanding of the CJRS at the time the dismissal was proposed.  There have been points in the Scheme’s history where it was definitely going to end at particular dates or to cost employers’ increasing levels of contributions, and then didn’t.  The fairness of a decision made on that basis (that it would end soon anyway or start to impose costs you could not afford) would not be undermined if the Scheme rules then changed such that things might have been different.  Similarly, there was much discussion at the start of the CJRS around whether it was open to those whose roles were at risk for reasons unrelated to the pandemic.  We saw some very mixed messages on the point from government and HMRC and a number of very shouty threats from the latter in particular around sanctions for abuse of that Scheme.  If on that basis the employer formed the view (maybe wrongly but nonetheless reasonably) that making a claim for that particular employee would see the HMRC gun down an otherwise entirely legitimate claim for all its other employees, who could really blame it for making him redundant instead?

  • The scope for flexi-furlough – was enough of the employee’s role still requiring to be done that, either alone or as a job-share, some partial furlough arrangement might have been a viable means of protecting the employment? And at the point where you made the employee redundant, was flexi-furlough even a Thing?

  • The employer’s understanding of the pandemic itself and of government proposals for the imposition or lifting of restrictions relevant to activity levels within its business.

The ET will readily accept that it was only very early in the pandemic that anyone in authority was foolish enough to claim clear views of how long or serious its impact would be, and that in the event, almost all of them were wrong anyway.  Therefore the burden on the employer in these cases to be right about any of its conclusions above is not at all a heavy one.  The key is merely to have thought about them with an open mind and a degree of good faith at the time.

If you didn’t think about them (or can’t prove that you did), that might mean that you lose the unfair dismissal claim as a question of liability.  However, this judicial poke in the eye can be significantly mitigated by arguments on quantum.  If the Employment Tribunal accepts that suitable consideration of those points at the time would not have altered the outcome, as in Handley above, it will award the employee little or no compensation.

© Copyright 2021 Squire Patton Boggs (US) LLPNational Law Review, Volume XI, Number 264
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About this Author

David Whincup Employment Attorney Squire Patton Boggs Law Firm
Partner

Following 10 years at a Magic Circle firm, David has been head of our London Labor & Employment Practice since 1994.

His expertise gained from over 30 years as a specialist employment law practitioner cover a wide variety of employment-related issues, including individual and team recruitment issues, policy and contract drafting, disciplinary and grievance procedures, individual and collective redundancies, the defence of employee discrimination and dismissal claims and other litigation, whistleblowing, employee health, data protection and matters surrounding confidentiality and...

+44 20 7655 1132
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