23 June 2020



Furloughing fraud and whistleblowing protection

A survey released last week suggests that more than a third of furloughed workers have been asked to carry out work while receiving support through the Government’s Job Retention Scheme.

Having workers carry on working – even if it is just lighter administrative work, such as filing – is against the rules of the Scheme. HMRC have called for powers to check for furlough fraud and for workers to come forward to tip them off. However, workers may be worried about resisting pressure by their employers to break the rules, particularly if their employment is precarious and they are worried about being dismissed in response.

Importantly, the Public Interest Disclosure Act (“PIDA”) 1998 provides protection to whistleblowers who raise issues about certain kinds of misconduct by their employers. The protections in PIDA (encapsulated in the Employment Rights Act 1996) apply when a worker makes a “protected disclosure” and allows them to bring legal proceedings if they can show that they were dismissed or subjected to some other kind of detriment – such as bullying or withholding a pay rise – as a result of making the disclosure.

Protected disclosures include those which relate to the fact a crime has been or is likely to be committed, or that a person has not complied (or are not likely to comply) with a legal obligation. In cases of attempted furlough fraud by employers, either of these two types of protected disclosure might be relevant.

In order to be protected under the law, workers who make disclosures must do so with the reasonable belief that it tends to show that a crime or breach of a legal obligation has happened, is happening, or is likely to happen in the future. They must also reasonably believe that the disclosure is made in the public interest. Concerns about breaking the rules of the Scheme mean the misuse of public money, so this is probably sufficient to pass the public interest test – especially if there is reason to believe that the employer is asking more than one person to work, or if the employer definitely knows that they are breaking the rules.

A protected disclosure must be made in the correct way. Workers will not typically gain protection if they make the disclosure on social media or to the press rather than to their employer or a regulator. For concerns about the Scheme, the likely best option for workers is to raise their issue with their employer in the form of a grievance, whether formal or informal.

It is also probably best that a worker does not directly accuse their employer of fraud in any grievance (even if the worker thinks the employer is deliberately breaking the rules) as it is enough to say the requests are wrong. Going further and alleging criminal offences may make the working relationship even more difficult, particularly if it turns out to have been a mistake.

If a worker is concerned that a grievance will not be effectively dealt with, they are able to contact HMRC directly (instead of contacting their employer) provided that they have the reasonable belief that their concerns are substantially true.

Records and evidence should be collected every stage to ensure that, if an employer does react negatively to whistleblowing, a worker is in a strong position to bring the appropriate legal action.

Written by:

Farore Law Logo

Farore Law