Rishi Sunak’s decision to replace furlough with a new jobs scheme risks denying justice to tens of thousands of employees who have been unlawfully laid off, Labour has warned.
New figures show a 31% rise in outstanding employment tribunal cases in April to June compared to last year, which the Ministry of Justice (MOJ) blamed on soaring unemployment due to coronavirus.
Individual claims increased by 18% compared to the previous year, while the number of cases dealt with fell by 21%.
Government analysis warned that the Chancellor’s decision to scrap the furlough scheme and replace it with the less generous Job Support Scheme will lead to a continued surge in claims at the end of October.
An MOJ statistician said tribunal claims had hit the highest level since 2012/13 due to the economic impact of the pandemic.
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“This rise in employment receipts is likely to continue as the government’s Job Retention scheme comes to an end at the end of October,” they said.
Despite rising claims, statistics showed more claimants are going without legal representation. Over half of claimants (56%) were represented by a lawyer in 2019/20, down from 64% in 2018/19.
Shadow Justice Secretary David Lammy said: “The government’s decision to pull the rug from under workers’ feet in the middle of the second wave of this pandemic will cause an unemployment crisis the likes of which we haven’t seen since the 1980s.
“In the middle of this jobs crisis, the last thing workers need is huge backlogs in employment tribunals that make it impossible for them to take on unscrupulous employers.
“Those who have been unfairly dismissed, faced discrimination in the workplace, or been otherwise unlawfully treated by their employers are at risk of being denied the justice they deserve.”
A HM Courts and Tribunals spokesperson said: “Employment tribunals are facing an unprecedented challenge, which is why we are rolling out new video technology, working to recruit more judges and increasing sitting days.”
It comes ministers were accused of leaving the jobs of nearly three million people working for small businesses “hanging in the balance”.
More than 130,000 firms such as clubs, restaurants and event operators have been forced to shut or trade at reduced capacity due to new restrictions, Shadow Chancellor Anneliese Dodds said.
Mr Sunak’s new scheme makes it more expensive for employers to keep workers on part-time than employ some full-time and let others go.
Bringing back one bar manager full-time will cost £455.30 a week but bringing back two workers part-time would cost £610.89, the party said.
Ahead of next week’s deadline for employers to issue redundancy notices for the end of the furlough scheme, Ms Dodds said ministers need to “change course”.
“Last week the Chancellor said that he was putting in a system of wage support but it’s very unlike the kind of systems of wage support we see in any other country because it doesn’t actually incentive employers to keep employees in work,” she said.
“They do need to change course. They do need to so quickly with those deadlines around redundancy upon us right now.”
A Treasury spokesman said: “The Job Support Scheme is designed to protect jobs in businesses facing lower demand over the winter due to Covid and is just one form of support on offer to employers during this difficult period.”