Government’s furlough scheme failed to stop 314,000 people losing their job from June to September this year.
New data has revealed British businesses planned to make redundancies at record levels in the three months leading up to September, as the second wave of the COVID-19 pandemic took its toll on UK jobs.
Figures released from the Office for National Statistics show that the Coronavirus Job Retention Scheme only went some way into stopping job losses, with 1,734 employers notifying the Government of plans to cut 20 or more posts between June and July.
The latest figures are a stark reminder of the current job market the UK finds itself in, with redundancy levels the highest they have been since 2006, the earliest date for which figures have been published.
Some high-profile cases of mass redundancies include Lloyds Bank, Shell, Virgin Atlantic and Premier Inn. The total number of jobs notified as at risk in September was 82,000, which was down on the peak in the summer. This was, however, three times higher than the previous September.
The period the figures focus on – June to September – coincides with when the government reduced its wage subsidy scheme. Figures for the past two months have not yet been released, though it is expected that the redundancy figures will have slowed since the Government announced that their Coronavirus Job Retention Scheme has been extended until 31st March 2021. At the time of the announcement, chancellor Rishi Sunak said that the reintroducing of furlough would “protect millions of jobs across the UK and support people to continue to provide for their families”. This will be reviewed in January 2021.
The Office for National Statistics said the 181,000 quarterly increase in redundancies was unprecedented and had pushed up the UK unemployment rate from 4.1% to 4.8% between the second and third quarters of 2020. Between August and September, the unemployment rate jumped by 0.3 points.
Prior to the COVID-19 crisis, the unemployment rate was below 4%, which was the lowest level since the mid-1970s. While the furlough scheme has helped limit job losses, the Office for National Statistics said its latest estimates showed 1.62 million people were unemployed in the July to September period of 2020, up 243,000 on the quarter and 318,000 on the previous year.
Ruth Gregory, a UK economist at consultancy Capital Economics, said further increases in unemployment were very much a possibility, predicting that the unemployment rate would peak at a worrying 9% following the end of the furlough scheme next spring.
“Perfect Storm” is causing employment tribunal backlog
The increase in redundancies has caused what experts are calling a “perfect storm” in relation to employment tribunal delays. Concerns are being raised about Covid-related job losses creating a backlog of cases of those who believe they have lost their job unfairly.
As with other areas of the UK court system, the employment tribunal service has been susceptible to coronavirus delays, with demand higher than ever. Data from early November showed that there were 37,000 outstanding employment tribunal cases brought forward by individuals in April to June. This figure was higher than the incredible peak seen in July to September 2009.
Many of these cases included claims of unfair dismissal and discrimination against an employer. The average waiting time for a case like this to be decided is around 34 weeks. However, reports are now suggesting this waiting time has risen to 14 months for some discrimination cases, with some courts booking in tribunals for December 2021.
An HM Courts and Tribunals spokesperson said of the delays:
To support the tribunal system, we are installing new video technology, recruiting more judges and increasing sitting days.
There has also been the introduction of some new measures to ease pressure on the creaking court system. Some of the measures new include:
- Allowing non-employment judges to take on cases
- Extending ACAS early conciliation periods to increase the chance of settlement
- Measures to reduce the administrative tasks that judges have to complete
Delays in the employment courts can cause UK employers and employees to face uncertainty over the outcome of a claim, leaving both parties in limbo for months. This can cause mental health issues for both employees and senior management, time taken away from work, and potentially prolonged reputational damage for businesses – something which no company needs in the current climate.
How can Percy Hughes & Roberts help?
If you are a business owner and you are thinking of making redundancies, but don’t know where to begin, Percy Hughes & Roberts can help.
If you have any questions regarding redundancies and the potential pitfalls, you can get in touch with us for expert advice. Get in touch with our Wirral Employment Law Lawyer today by calling <0151 666 9090 or by completing the “Get in touch” form on this site.
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