HR · 17 August 2020

Post-furlough redundancies could place your small business at risk as courts see 40,000 backlogged tribunal cases

Unfair dismissal claims may lead to increase in tribunal cases
Unfair dismissal claims may lead to increase in tribunal cases.

Legal employment expert, Alan Lewis of Constantine Law believes that there is a backlog of some 40,000 tribunal cases at present.

He believes these high numbers show that there are many claims being processed at present but despite that, we still see long delays in listing cases for hearing.

According to the Employment Tribunals National User Group, who met on 30 June 2020:

1.      The coronavirus crisis has led to a significant increase in the tribunal backlog, which is increasing by approximately 1% each week.  “There can be no doubt that this is likely to increase even further after the demise of the Coronavirus Job Retention Scheme when there are more redundancies,” Lewis said.

2.      There was already a significant backlog prior to Covid-19 becoming an issue.  There were about 30,600 single cases as at March 2020, rising to 36,600 in June.

3.      Waiting times for listings of hearings are panning out as follows: as of June 2020 the South East region is listing 2-3 day cases for 2022, the London South region was listing 2-3 day cases in mid- to late- 2021, and every other region in England & Wales was listing 2-3 day cases in the first half of 2021.

“Much of this backlog has been caused, not by the Covid-19 crisis, but by a huge lack of funding in the courts and tribunals service over recent years,” Lewis added.

“The fall-out from the Covid-19 pandemic has brought these issues to a head. It is worrying to see that cases brought mid 2020 in the South East will now not be heard until 2022, creating more uncertainty for employees and businesses alike. The system is in danger of being completely overwhelmed, particularly when the CJRS comes to an end. More resources are urgently needed, including more judges.”

In June 2020, approximately 9.1 million employees from 1.1 million different employers were furloughed in the UK as part of the government’s job retention scheme. According to Stephen Nixon, partner and head of commercial litigation at Enoch Evans LLP, this could be the primary reason for a spike in employment disputes due to potential discrimination or victimisation claims as the country eases out of lockdown.

“Throughout the course of the coronavirus pandemic, we’ve seen a sharp rise in businesses and organisations approaching us with concerns related to potential employment disputes that may arise from decisions to furlough employees or make them redundant,” Nixon said.

With the UK economy preparing to bounce back from lockdown, employers now face a variety of challenges; from restructuring and redundancies to updating contracts and ensuring legally compliant handbooks are in place. The financial pressures that businesses face could lead them to decide not to take specialist advice, leaving them open to costly legal fees and lengthy legal disputes. Preparing for any potential claims of unfair dismissal will be crucial for small business from here on out.

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ABOUT THE EXPERT

Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.

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