Furlough: A Review of The Cases

The aim of furlough was to try and preserve employees jobs. In March 2020 the government introduced the Coronavirus Job Retention Scheme (CJRS). The decision on whether to furlough an employee is down to the individual employer, the employee does not have a right to be furloughed, although consent should be obtained in writing from the employee.

As furlough has come to an end, it has generated a considerable number of cases in the Employment Tribunal. Employers have had to be cautious when making decisions regarding dismissing staff at this time, the results of the cases that have been heard have varied and lack consistency.

In Accattatis v Fortuna Group (London), Mr Accattatis worked for a company that sold and distributed PPE, his job included accepting daily deliveries amongst his other duties. When Mr Accattatis requested to work from home, his request was denied because his job required him to be physically present. The company policy was that those who did not want to come into work could take paid or unpaid leave. On becoming unwell, a request was made to the company for him to be furloughed. This was again refused on the grounds he was not eligible for the CJRS scheme. He was eventually dismissed by the company for his attitude in failing to comply with company guidelines and policies. His dismissal was held fair by an Employment Tribunal as his demands for furlough or to work from home were not appropriate steps to prevent him from the danger he perceived. He was dismissed as he was considered to be a difficult employee who had less than two years’ service.

In Rogers v Leeds Laser Cutting limited, Mr Rogers was concerned about shielding his children who suffered from sickle-cell anaemia. He remained home from work “until the lockdown was eased”, it was accepted by the Employment Tribunal that Mr Rogers did not establish a belief that he was subject to a serious and imminent workplace danger under section 100(1)(d) and (e) Employment Rights Act 1996. His dismissal was held to be a fair dismissal.

In circumstances where an employee is made redundant, there is no obligation to rehire the employee. The CJRS scheme was intended to avoid redundancies by relieving the pressure on employers to pay wages when their employees were unable to attend work. Redundancy severs continuity of employment between the employee and the employer. Therefore, if an employee is rehired it could be on the basis that they start afresh as an employee or alternatively any redundancy payment is returned in full to the employer and continuity is treated as being preserved without a break in employment.

Mhindurwa v Loving Angels Care Limited is a case where Mrs Mhindurwa was dismissed when her employer refused to consider furlough and made her redundant. This dismissal was held to be unfair despite there being a genuine redundancy situation since the work she undertook had diminished. The Tribunal held the purpose of CJRS was to avoid redundancies, the employer could not explain why furlough was not considered. The Employment Tribunal held a reasonable employer should have considered this instead of dismissal.

In contrast to this, in the case of Handley v Tatenhill Aviation Ltd, the Tribunal found that an employee, who was on furlough, was not unfairly dismissed simply because his employer decided to make him redundant, the decision to dismiss despite the existence of the CJRS did not render the dismissal unfair, no compensation was awarded as it was deemed to be fair due to the employers need to cut costs irrespective of the CJRS.

Initially, employees who were furloughed could not be required to work during furlough, as the pandemic endured, the terms on which furlough could be paid changed. Employees were able to work on a part-time basis of being flexi-furloughed. The employer could claim in full for the furloughed employee in respect of the time that the employees were not working.

When submitting a claim, the employer must confirm in writing:

  • the reason they put the employees on furlough, such as, reduction in work or the impact of sickness on the ability to continue the business
  • that they are claiming the “costs of employing furloughed employees arising from health, social and economic emergency resulting from coronavirus”
  • that they meet the exceptional purpose of the scheme.

Where an employer claims more than it should have done in a claim period it should keep records of any notification to HMRC of the over claim and records of the adjusted amount for six years. The payment must be returned to HMRC immediately if the employer is unwilling or unable to use the payment for that purpose. No claim should be made which is abusive or contrary to the exceptional purpose of the CJRS.

HMRC has monitored the situation and sent letters to employers it believes may have claimed too much under the scheme and for the employers to review their claim. With significant repayments anticipated for those who may have over-claimed, criminal liability attaches to those who have abused the scheme with HMRC having the ability to make recommendations to the Crown Prosecution Service for furlough fraud. Details of companies who have claimed furlough payments are published by HMRC; employees are provided with information on their employer’s claims made in relation to them.

Contract law continues to prevail even when employers wrestled with putting staff on furlough. There is always the need to obtain the employees’ consent when varying their terms of employment,. When Ms Lough brought her claim against Tasks of Scotland limited, her employer failed to obtain her written consent to being placed on furlough and to reduce her wages. She was successful in the Employment Tribunal with a claim for unlawful deductions from wages as the employer had not sought her consent to the variation of her contract.

In Lough v Taaks of Scotland limited and another, Ms Lough and her colleagues raised concerns about the CEO and founder of her employer. They raised whistleblowing concerns about

  • the failure to comply with the Scottish government guidelines in relation to COVID-19
  • the funds claimed by the employer whilst she was required to work
  • the failure to ensure a safe working environment

The concerns raised amounted to a protected disclosure which resulted in an unfair dismissal under whistleblowing provisions. Ms Lough received;

  • unpaid notice and accrued unpaid holiday pay
  • compensation for loss of income from the date of dismissal to finding new employment
  • 52 weeks for ‘ongoing losses
  • an injury to feeling award of £12,500 plus interest on the sum.

It’s likely that considerably more litigation will arise out of the COVID-19 19 Pandemic and the furlough scheme, each case will turn on the particular facts of each case.

If you believe that you have been subject to unfair treatment arising out of the Covid-19 crisis contact us at Spire.