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Welcome to our latest newsletter. It is not often that I trumpet our successes as a law firm but this month there is good reason to do so.
Staff contentment is essential for any well run business. A key element in achieving this is to have properly organised working arrangements. In my experience staff hate not having clear guidance about what they should be doing. It is also massively beneficial to have clearly set out rights and obligations that are applied consistently. From a business perspective it's a no-brainer. A contented workforce is an efficient and willing workforce who take pride in their work and deliver quality.
With that in mind I'm delighted to report that Canter Levin & Berg has this month passed its latest Lexcel assessment with flying colours. Lexcel is a quality scheme administered by The Law Society which recognises excellence in legal practice management and client care. We have been accredited since 2003 and we have been an Investor In People since 2000. Our assessor noted an "excellent" staff working culture in "an excellent place to work".
Morale is good and people work well together both within and across teams. Standards of client care are high, there are very low levels of complaint, and many repeat clients and recommendations from existing clients.
Successful businesses know that quality is the key to success and with that in mind we have recently extended our focus on quality by being accredited as a member of the UK200 Group of independent quality assured professionals.
Our Employment Solutions service is a perfect example of how we can make our winning formula available to SMEs with a focus on top quality at an affordable monthly rate. We trial and use most aspects of the Employment Solutions service in our own business and I can therefore vouch for the fact that it works. Give us a call free on 08000 832832 if you would like to meet one of our employment lawyers for a no-obligation chat or email me at firstname.lastname@example.org.
I hope that I've not come across as a bit Barry Scott / Cillit Bang in this month's introduction! However, I love to be able to share with you that we know how to do things right and we would be delighted to share that knowledge with you.
Please also let us know what you think by contributing to the Employment Solutions blog.
You may notice a few changes to the layout of this month's newsletter which have been introduced to make it more mobile and tablet friendly (our statistics show that most of our readers view the newsletter on an iPad or similar tablet). Please let me know if you have any problems reading the email or if you have any suggestions to improve its layout.
This month's news round-up:
Amrik Singh Bilkhu is an assistant criminal defence solicitor with GT Stewart Solicitors in East London. He holds accreditations for criminal law, fraud and advocacy. He qualified in 2001 and has made visits to prisons for many years. As a Sikh he has worn a turban, held together with four pins, for 24 years.
In October 2013 he visited HMP Belmarsh to see a client who was on remand. On arrival he was told that he had to remove the four pins that were holding his turban in place, even though that meant that the religious garment would have fallen apart. The result was that he was refused access to the prison.
Mr Bilkhu brought a claim alleging religious discrimination. Initially the Ministry of Justice defended on the basis that Mr Bilkhu had not been refused entry, but had in fact elected not to proceed with the visit to his client, rather than submit to a search of his turban. Of course, in adopting this approach the Ministry was entirely missing the point. It is therefore no surprise that it has now capitulated and paid undisclosed damages to Mr Bilkhu rather facing a county court trial in May.
Mr Bilkhu's solicitor Duncan Burtwell, also of GT Stewart, said:
The way that Mr Bilkhu was treated in this matter was appalling and it ought never to have been necessary to bring this claim on his behalf.
He also said that Mr Bilkhu had suffered "indignation and distress" which were compounded by effectively being branded "a vexatious liar with nothing better to do than bring minor claims such as this one".
In Salmon v Castlebeck Care (Teesdale) Ltd and others the Employment Appeal Tribunal was asked to consider whether a successful appeal against dismissal has the effect of automatically reactivating the contract of employment or whether an employer needs to take the further step of reinstating the employee. It also considered whether or not there is a need to communicate the decision to the employee before it takes effect.
These may seem obvious points but there are practical aspects that are useful to know in advance of having to deal with such a scenario.
In the case in question Mrs Salmon, Miss Snape and Mrs Edwards were summarily dismissed from their employment with Castlebeck Care Teesdale Limited on 10 July 2013. The dismissals were in respect of alleged gross misconduct. All exercised their contractual right of appeal.
On 4 September 2013 the business of Castlebeck transferred to Danshell Healthcare Limited. Employees were TUPE transferred. Miss Snape's appeal had been heard before the transfer but no decision had been issued. Mrs Salmon's appeal was heard on 17 September (by Castlebeck's HR director who had also transferred under TUPE). Their dismissals were deemed to be "unsafe" but the appeal by Mrs Edwards was dismissed.
No express decision to reinstate was made and there was no indication in clear and unequivocal terms that the contracts of Mrs Salmon and Miss Snape had been revived as a result of their successful appeals. Instead, Danshell instructed Peninsula, who acted as their employment consultants and therefore presumably on their advice, to prepare settlement agreements.
Both were due due meet a Miss Hills of Danshell on 10 October but that meeting was cancelled the day before. At this time neither of them had been told the outcome of their appeals.
They brought claims for unfair dismissal in the Leicester Employment Tribunal. The claims against Castlebeck succeeded but the claims against Danshell failed on the basis that Danshell had never been their employer.
Mrs Salmon appealed the decision to the Employment Appeal Tribunal on the basis that her successful appeal had the effect of reviving her contract of employment so that she was therefore TUPE transferred to Danshell on 4 September.
Business minister Baroness Neville-Rolfe has described as scandalous the fact that so few tribunal awards are paid promptly by employers. However, perhaps she should have looked to her own Government before criticising others.
The Small Business, Enterprise and Employment Bill includes provisions that employers who do not pay awards when they are due will receive a warning notice from an enforcement officer. Continued failure to pay will lead to a penalty of 50% of the award. There will be further penalties for repeated non-payments.
Speaking in the House of Lords on 26 January during the Bill's latest committee stage she said:
I believe we share the same aim-that of ensuring the best outcomes for individuals who have been through an employment tribunal, and ensuring that they receive their awards. Our research indicates that, without enforcement, only 40% of awards are paid within six months. That is clearly scandalous. Our financial penalty clause is intended to incentivise prompt payment of employment tribunal awards and to prevent employers ignoring judgments by employment tribunals. It applies to all tribunals, awards and settlements conciliated by ACAS. Employers who have not paid the award will receive a warning notice from the enforcement officer. By paying the award in full, promptly, they will avoid a penalty. However, if they do not pay in full, they will be hit with a penalty of 50% of the award. If they continue not to pay, or to pay only part of the award, they can receive further penalties, each of 50% of the unpaid amount, as well as incurring interest on the outstanding award. We consider that encouraging prompt payment in this way is an effective way of dealing with a problem that we agree exists.
As I reported last September the problem is endemic, not just in terms of the delay in paying awards but in paying them at all. Research shows that 49% of successful claimants receive payment in full, 16% receive a part payment and 35% receive nothing at all. A key problem which is not addressed by the Government's latest proposals is the number of respondents that cease trading, leaving claimants as unsecured creditors. In our relatively relaxed corporate regime it is fairly easy for such businesses to unload their creditors and carry on, particularly by the use of pre-pack administrations.
However the Government would do well to consider its own tardiness in making payments following successful claims. In February 2013 the Supreme Court delivered its judgment in the case of O'Brien v Ministry of Justice confirming that fee paid tribunal judges are entitled to pension payments. The entitlement to receive payments was confirmed in the Employment Tribunals in January 2014 and again in the Employment Appeal Tribunal in March 2014. Although inviting judges to submit details of their claims in March 2014, many remain entirely unpaid. Perhaps the Ministry of Justice should be issuing penalties against itself!
In November 2014 I warned that employers should get ready for backdated holiday claims, particularly from those who are now entitled to include average overtime when calculating the rate payable.
The Government's response was to attempt to limit the effect on employers by introducing the Deductions from Wages (Limitation) Regulations 2014. The Regulations are intended to restrict employers' exposure to backdated claims by limiting the period of claim to two years before presentation of the claim and by confirming that the right to paid holiday is not automatically incorporated as a term in employment contracts. However, of course, this does not displace the entitlement to paid holidays under the Working Time Regulations.
Further, the Regulations only apply to claims lodged after 1 July so there is a window of opportunity for employees.
Of the UK workforce of 30.8 million, five million do voluntary or compulsory overtime. The scope for claims and increased payments going forward is therefore considerable.
In mid-January John Lewis and Waitrose staff were informed that they will share £22 million in additional payments this year to provide for the increased entitlements. 60,000 employees will share "bonus" (i.e. backdated) payments in February amounting to £10 million and the ongoing cost for the employer will be £12 million per year. However, there is a catch. The cost of the payments is likely to result in the reduction of a profit-related bonus which is due in March.
Tracey Killen, the partnership's director of personnel said:
The John Lewis Partnership has acted promptly to change its pay practices in response to the EAT ruling. We believe our approach is a fair and practical outcome for our partners in light of this decision.
Meanwhile, a voluntary redundancy deal agreed with workers at Cadbury's Bournville plant has resulted in payouts which average £100,000 per employee.
In September last year I wrote about the problem of what have been described as "revolving door managers" in the NHS. Settlement payments have amounted to a shocking £1.6 billion, often paid to employees who were re-employed in virtually the same or similar jobs with weeks or months. Faced with a problem on such a massive scale the Government proposed arrangements for clawbacks in the event of re-engagement. However, I and others pointed out that a direct intervention to alter contractual rights would be fraught with difficulties and no doubt susceptible to frequent legal challenges. The problem remains unresolved.
In the meantime it seems that the contagion has spread to local authorities, but on a scale perhaps even greater than in the NHS. According to research carried out by The Times (£) local authorities have spent an eye-watering £5 billion in rehiring staff they recently made redundant in a "scandalous...spending spree on agency and consultancy workers".
The spending is all the more surprising since it comes at a time when councils have seen their budgets cut by £20 billion. It seems that the response to losing 400,000 permanent or other salaried staff has been to replace them with agency workers and consultants. In some sectors, for example social workers, the same person who used to work for the council secures higher paid work in the private sector, perhaps as a self-employed consultant, and then sells those services to the council, in effect to do the same work as before.
The newspaper conducted its research by making a series of freedom of information requests to local authorities. The results revealed that the worst offenders were Birmingham (£155 million in the last five years), Essex (£133 million), Kent (£127 million) and the London Boroughs of Lambeth (£125 million) and Camden (£125 million). Locally, Lancashire was the biggest spender (£51.2m), followed by Manchester (£48.3m), Liverpool (£29.7m), Cheshire East (£29.4m), Wirral (£18.9m) and St Helens (£16.2m).
However, what is the alternative? If councils are required to make savings then, as with any business, by far the biggest expense is the wage bill. The problem is that, as any accountant will tell you, moving an expense item from one column to another (e.g. permanent staff to consultants or agency staff) delivers no saving at all. The situation can get even worse if, for example, the only available service providers (e.g. for social care) cost a good deal more than direct employees. No-one can blame the agencies for charging as much as they can get away with.
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