Redundancy due to Financial Impact of Covid-19 was Unfair Dismissal

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In Handley v Tatenhill Aviation Limited, the Employment Tribunal held that an employee was unfairly dismissed for procedural reasons when they were made redundant by their employer even though it could have chosen to furlough him for longer.

Background

The Claimant was a flying instructor for Tatenhill Aviation Limited. The Claimant and one other flying instructor were full-time employees, with the other lessons being covered by self-employed flying instructors, who operated on a different basis to the employees.

In the middle of March 2020, the Claimant and members of his family developed Covid-19 symptoms and, in line with Government guidance at the time, self-isolated for 14 days. During this time, the UK went into lockdown on 23 March 2020 and the Claimant was subsequently placed on the Coronavirus Job Retention Scheme (the “Furlough Scheme”).

As a consequence of the employer’s flight training business receiving no income at all during the lockdown, and believing that this side of the business would not receive any income for the foreseeable future, the employer began redundancy proceedings. Originally the employer believed that both flying instructors would need to be made redundant.

On 4 May 2021, the employer made the Claimant redundant. The Claimant received a redundancy payment and the holiday pay he had been entitled to as a result of his redundancy but proceeded with bringing a claim for unfair dismissal, as he believed that he had been replaced by more self-employed flying instructors and that the furlough agreement prevented him from being made redundant.

Judgment

The Employment Tribunal accepted that there was a genuine redundancy situation as the Respondent’s requirements for employees to carry out flying instructor duties had been reduced.

The other employee (who had been retained) had various other skills useful to the Respondent, such as being able to teach and fly aerobatics, worked additional hours when demand was high, was a qualified flight examiner and had also worked as an aircraft engineer so could help in other areas of the employer’s business, if needed. The Claimant himself admitted that, if he were the person making the decision, he would have kept the other employee rather than himself.

The Employment Tribunal rejected the Claimant’s furlough argument. It found that his employer had considered the possibility of leaving the Claimant on furlough for longer, but had decided not to do so because it did not consider that his role would be needed even after the pandemic and it wanted to use the Furlough Scheme to pay some of the costs of the redundancy. The Employment Tribunal found that these were valid considerations and the employer’s response fell within the range of reasonable responses.

However, the Employment Tribunal did rule that, although the employer took reasonable steps to follow a fair process, the Claimant’s dismissal was procedurally unfair. The Employment Tribunal came to this conclusion as, during the redundancy consultation process it was found that a clear decision to select the Claimant for redundancy had been made prior to the start of the consultation process and, the same person who had made the redundancy decision, also heard the appeal.

What does this show?

The key difference between this case and that of Mhindurwa v Lovingangels Care Limited is that the employer was able to explain why it had not furloughed the Claimant for longer, whereas Lovingangels had failed to give sufficient consideration to the Furlough Scheme as an alternative to redundancy.

This case highlights the importance of following an effective redundancy procedure as the Employment Tribunal has indicated that dismissal can still be unfair even if there is a genuine redundancy situation.

No compensation was awarded to the Claimant as, in the Tribunal’s opinion, he would have been dismissed even if the redundancy procedure was not flawed. This decision shows that if for example, the Claimant would not definitely have been dismissed based on the selection criteria, he may have been entitled to a basic and compensatory award.

Further information

For specific advice for your business, please get in touch with our specialist Employment Law team through this website or by calling 0330 404 0778.

Our partners at Ashtons HR Consulting are also on hand to assist you.


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