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Furlough warning: Employment tribunals skyrocket – how legal fees may cost you ‘thousands’

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Furlough rules were introduced to keep workers employed and supported where possible but in the process, the new circumstances upended working arrangements. This was likely made more complex as July rolled around and “flexible furlough” updates were issued.

Reportedly, both employers and employees ended up trying to abuse the new system through either saving month or using the government funds inappropriately.

These difficulties were reflected in government figures released in late September which showed the number of employment tribunals involving individuals increased by almost 20 percent between April and June 2020.

Many experts within the field detailed this rise was the result of furlough confusion and unfortunately, with the support set to reduce at the end of this month, additional employment problems may emerge.

As Tim Hayes, a Legal Director in the Employment Law team at BDB Pitmans, explained: “The rise in tribunal claims is causing increasing concern among both employers and claimants.

“The numbers are highly likely to keep on rising as the full impact of the coronavirus pandemic filters through to workplaces up and down the country over the coming months.

“Most significantly, individuals now face the prospect of a lengthy battle in the employment tribunal if they want to assert their employment rights, with claims, particularly the more complex ones, potentially taking years to reach a final hearing.

“The impact of these delays on accessing justice is clear and considerable: claimants may simply be put off from taking action in response to breaches of their workplace rights, if they know that it may take years to do so.

“The delays also pose problems for employers.

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“Staff are more likely to be engaged on long-running tribunal claims, potentially using up valuable resources and management time.

“Witnesses may also find it much more of a challenge to recall events happening so long before hearings or those witnesses may simply have moved on to other jobs in the interim.”

Tim went on to breakdown just how much these long tribunal cases may end up costing employees: “Lengthier Tribunal processes can mean that the cost of making and defending claims increases, if legal representatives have to spend more time proceedings due to the passage of time.

“It is also becoming increasingly common for Tribunal hearings to be postponed at the last minute, meaning that the parties can incur fees for barristers who may be scheduled to attend the Tribunal on their behalf even though a hearing doesn’t go ahead.

“Those fees can amount to thousands of pounds.”

Under the current rules, employees are able to report potential fraudulent activity to HMRC.

HMRC may be able to intervene if a claim is upheld, with the following being examples of how employers may be abusing the system:

  • They’re claiming on an employees behalf but not paying them what they’re entitled to
  • They’re asking the employee to work while being on furlough
  • They’re making a backdated claim that includes times when the employee was working

From November, furlough rules will be replaced by a “Job Support Scheme”.

This scheme was recently announced by Rishi Sunak and it is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to coronavirus, to help keep their employees attached to the workforce.

The scheme will open on November 1 and will run for six months under current plans.

Under this scheme, the government will pay a third of hours not worked up to a cap, with the employer also contributing a third.

This will ensure employees earn a minimum of 77 percent of their normal wages, where the government contribution has not been capped.

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