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Whistleblowers get reassurance against furlough fraud prosecutions

We are pleased to see the Government give reassurance to whistleblowers raising concerns about Furlough Fraud.  Neither the proposed powers (in the Finance Bill) to recover money paid illegally through the scheme (formally called the Coronavirus Job Retention Scheme) nor fraud charges will be levelled at those who raise these concerns.

Background

Furlough fraud makes up 59% of the 510 Corona Virus related cases we’ve taken on the Advice Line since March 23rd.

HMRC have also seen thousands of concerns on the issue raised through their secure reporting channel.  A key area of advice whistleblowers ask for time and time again is their own liability if they are forced to work while being Furloughed.

We have previously written about how the typical Furlough Fraud situation revolves around the employer either asking or threatened employees to volunteer, help or just work while being part of the scheme.  This puts the employees in an almost impossible position where they have no power over the decision to be part of the scheme, and often little chance to refuse to work, as otherwise they may be fired or made redundant.

Whistleblowers publicly reassured

After sharing our concerns with Lord Wills he asked a Parliamentary question seeking reassurances that whistleblowers will not be pursued to repay illegal payments or prosecuted for fraud should they work while be furloughed. Lord Agnew of Oulton answering for the Government said:

‘In cases of fraudulent claims in respect of the Coronavirus Job Retention Scheme, HMRC will seek to recover funds from the claimant employer.

Using powers that are before this House in the Finance Bill, where the employer is an insolvent company and an individual with management responsibility knowingly made an excessive claim, HMRC will be able to seek to recover funds from that individual.

Whistleblowers can be confident that HMRC will act to protect their confidentiality, and that they will not be liable for recovery. This does not include cases where the employer and employee conspire to defraud the scheme.’

The Government reassurances to whistleblowers, matches a similar commitment made to directors namely that honest mistakes would not be punished - prosecution will be focused instead on those who act dishonestly.   It appears that the Government’s statement means that Furloughed workers who raise concerns about their employer forcing them to work while being part of the scheme will not be pursued for the money paid to them.  It is the employer who commits the fraud, the employer who receives the payment, and the employer who should suffer any penalty.

Lord Agnew’s last point reminds employees that the act of whistleblowing does not protect them against any prosecution for their own wrongdoing.  There may be cases where employees are working with employers to defraud - but these are not the employees calling us.  We trust that whistleblowers who are working under threats from their employers will not be treated as co-conspirators. We would welcome clarification that anyone who raises a concern – whether internally with their employer, or externally with HMRC – will be exempt from any conspiracy charge.

More to do

We would now like to see HMRC commit to reopening the telephone reporting service so that whistleblowers looking to Speak Up about Furlough fraud can get reassurance from HMRC and information on the process.  This is especially important given the changes that have now taken place with the scheme which serves to increase the complexity of the arrangements.