Free Employment Law Resource

24 08 2009

I am delighted to announce that I will be writing the Employment Law resource on Insite Law, the online legal resource page run by Charon QC.  It is designed to be an online textbook, with hyperlinks to cases and to be capable of being updated regularly so that it remains current.

It is part of his initiative  to get more legal materials online, for free.  It is anticipated that the resource will be of most use to students, but it could also be helpful for practitioners in other disciplines who just want a quick introduction.  I have volunteered to cover employment law and am just in the process of getting started. It’s a daunting prospect at this stage as there is a lot to cover but, when finished, I hope it will be useful to readers and also complement the issues raised in this blog.  It will be published in instalments, which is just as well as I don’t fancy writing 300 pages by the end of the month.

Click here for a link to Charon QC’s announcement and for more on the project as a whole.  Charon QC has covered the law of contract and the law on Sale of Goods.  He is also writing on Tort.  Other contributors, like  Peter Groves of the Ipso Jure blog writing on Intellectual Property, have also come on board.  Hopefully most areas of law will be covered in the fullness of time.





What are Lawyers really like?

24 08 2009

Now, if this doesn’t provoke a whole heap of comments, no doubt mainly derogatory, nothing will.  This being the silly season it seems like an ideal time to ask the question.  And I’m not going to tell you the answer. Instead I suggest you read Tim Kevan’s new book “Baby Barista and the Art of War”, just published by Bloomsbury and which is based on his blog in The Times.  Tim is also a barrister, albeit he is currently taking a break from practising in favour of surfing in Devon and walking his dog.   

It’s a thoroughly amusing read and should be required reading for anyone contemplating a career at the Bar (or as a solicitor, we don’t come out too well either).  It’s the story of a “Pupil” (newly-qualified) barrister training in Chambers trying to outwit and outmanoeuvre the three other pupils in the hunt for the holy grail at the Bar; a tenancy in Chambers.  The characters are all vividly drawn and credible; the situations the characters find themselves in all give a real flavour of litigation from the side of the practitioner.    There’s plenty to amuse both lawyers and non-lawyers alike.

It’s not just a comedy though.  He also touches on big issues such as the independence of the Bar which will become much more of a live issue now that solicitors and barristers can go into partnership together since the introduction of Legal Disciplinary Partnerships last April.  For instance,

“For all their supposed independence, most barristers seem to live in a state of complete paranoia and spend so much time kowtowing to solicitors that their independence is worth even less than their pride”

You’ll also read the best explanation of why you shouldn’t sign up for a no win no fee agreement to fund your case, but instead get legal expense insurance in advance so that the lawyers don’t start worrying about how they are going to get paid.  No win no fee agreements do create a conflict of interest between lawyer and client and the question of how they (we) get paid becomes “a big fat ugly screaming beast jumping up and down on their head”.  Too true.

It’s a good holiday read – list price is £11.99, but considerably cheaper from Amazon.





Jobsworth is One

18 08 2009

One what you might ask?  To avoid potentially unpublishable suggestions, let me just clarify that Jobsworth – the employment law blog is one year old today.  It is, incredibly, one whole calendar year since I started this blog, which arose out of a newspaper column I was then writing.  95 posts later I’m still enjoying writing it but, more importantly, I hope you enjoy reading it.  To all of my regular readers may I say thank you for your support and kind comments? Some of you have even been kind enough to instruct me at Dale Langley & Co, where I do my day job.    I’ve had some very positive feedback on what I’ve written, which has been helpful.  If there are any topics you would like to see covered please let me know.

My posts on the alternatives to redundancy, such as pay cuts and working for free, have been the most popular to date.  I’ve spent most time writing on redundancy (not surprising given the times we live in) and not a great deal on unfair dismissal.  This I will be rectifying over the coming months as the blog hurtles into that awkward period between being able to crawl and before the terrible twos.  Time for a celebratory Farley’s rusk methinks.





Riam wins

14 08 2009

I was pleased to learn that Riam Dean, the law student who sued Abercrombie & Fitch for wrongful dismissal and unlawful harassment (because of her disability) won her case at the London Central Employment Tribunal.  According to The Independent today, she was awarded £7,800 compensation for injury to feelings, £1,077.37 for loss of earnings and £136.75 damages for being wrongfully dismissed.  It is reported that she did not succeed with her claim for “direct” disability discrimination which the ET thought was “not well founded”.   I would be interested to read the law report on this case, if it ever gets published, for the reasoning behind the decision. I’ve posted before on the case (click here).

It’s always good to see the style police take a battering.





FSA Remuneration Code for Bankers

12 08 2009

The FT is reporting today that the FSA has finally produced its remuneration code on how bankers should be paid.  I have only seen the headlines and brief summary of the proposals, but it seems that the FSA has shied away from being too prescriptive for fear of driving bankers abroad to less tightly regulated markets.  Expect a deluge of criticism to fall on top of the FSA, whose days are numbered if the Tories return to power at the next election.

The draft code stipulated that two-thirds of each bonus should be deferred and that individuals should be rewarded on the basis of the firm overall rather than just the individual or the business unit.  Apparently that isn’ t in the code to be published today. I posted last week on bonuses and clawbacks – click here to read it.

Undoubtedly the FSA will be criticised for not taking a more rigorous line, yet it is in a situation where it is damned if it does and damned if it doesn’t.  If they had produced a very stringent code the institutions would accuse the FSA of destroying London’s competitiveness as an international financial centre.  Other international regulators are not taking a hard line so why should the FSA?  In my view it would be a bad move to have a government body dictating pay – like the failed prices and incomes policies of the 1970s – and ask yourself this: if the state starts dictating what bankers can be paid, who will be next up for regulation?





Contracts of Employment: what you need to know

12 08 2009

I  spent a good part of yesterday evening preparing a seminar that I have been asked to give at the City Business Library on 20th October next.  The topic handed to me is the title to this post: “Contracts of Employment: what you need to know”, to cover one hour.  The seminar is aimed at new businesses looking to take on staff for the first time.  At first glance I thought it would be an easy topic, one I am very familiar with, nothing too controversial and plenty of time for discussion afterwards.  Then, on my way in to work this morning, tapping out a skeleton presentation in Powerpoint on the trusty laptop, I realised just what I have let myself in for. 

The topic is huge.  You could spend an hour discussing what actually constitutes an employee before you even get on to discussing the information that has to be given to a new employee under s.1 of the Employment Rights Act 1996 (click here to view the BAILLI database for the full test of s.1). If you follow that link  you will see that s.1 requires the employer to write to the employee setting out the main terms of the employment, the name of the employer (not as silly as it might seem at first glance), the date the employment began and any periods of continuous employment to be taken into account, job title, place of work, the amount and rate of pay and many other important “housekeeping” issues.  The s.1 statement must be given within two months of the employee starting work, failing which the employee could complain to an Employment Tribunal for a declaration of the applicable terms of employment.  In other words, the ET would decide what the terms and conditions of employment will be (or were if the employee has since left); a potential double-edged sword which is why not many complaints under s.1 ERA get made to ETs.

In many cases a business will describe someone as “self-employed” when, in reality, they are an employee, in an attempt to avoid the individual acquiring the right to sue for unfair dismissal. The taxation treatment of the individual isn’t enough.  In other words, if someone is not on PAYE that doesn’t mean they are self-employed.  There are many different tests used by ETs to determine whether a person is an employee or not – none of them overridingly conclusive.  Each situation is looked at on its own facts and an ET won’t be blinded by whatever label the person has been given. 

The factors that are particularly important though concern whether there is a need for the individual to provide the services themself, or are they required to find a substitute to perform when they are sick/on holiday.  If yes, then that tends to be suggestive of an independent contractor relationship rather than an employee.  Also is there mutuality of obligation?  Is the business obliged to provide work to the individual?  If no then it is not suggestive of an employee relationship.

A massive topic and I haven’t even got onto disciplinary procedures, notice periods, PILON clauses, restrictive covenants and how to avoid being sued plus a hundred and one other considerations. At least there is scope for further seminars.  More updates to follow in due course.

Of course, if you want any advice on any of these issues please do not hesitate to contact me on 0207 464 8433 or at michaelscutt@dalelangley.co.uk





Bonus Rage and Clawbacks

5 08 2009

Unusually for an August the topic of bonuses is back in the news pages.  This isn’t surprising given that the recession has been firmly blamed on reckless bankers supposedly taking unnecessary risks to generate huge returns that almost led the banking system to collapse last autumn.  Both Barclays and HSBC have announced huge profits for the last six months.  In Barclays case it was £3bn up 8% on the equivalent period last year, and the comparable figure for HSBC was £2.8bn.  Both banks also revealed that they were making massive provision for bad debts.  Bob Diamond, the head of Barclays Capital (BarCap) was on the front page of The Independent on Tuesday, where it was reported that he had received a remuneration package in excess of $50mn at the height of the boom.  The Independent also reported that the “average net income generated per member of staff” at BarCap had increased from £134,000 to £193,000 per member of staff in the last six months.   The FT also reports today that a US hedge fund group called Och-Ziff, based in the US made a loss of $88.3mn because of a 74% increase in bonuses paid to its top traders.  At the Dale Langley & Co website we recently posted on the steps the FSA are taking to try and restrict remuneration packages – click here to visit.  The government, the FSA and the public are all determined to stick the boot in.

Much of the anger generated over this issue has been stoked by the fact that the taxpayer bailed out the banking system to prevent its collapse. In the case of Barclays and HSBC, of course, they did not directly receive state funds but are judged to have been indirect beneficiaries of the taxpayers’ largesse.  If this wasn’t August we would, presumably be seeing the usual collection of hippies, anarchists and eco-warriors calling for bankers to be strung up from the nearest lamp-post (where are they – visiting their holiday squats in Tuscany?)  The central issue is how do you balance the need for restraint with incentivising employees to produce the goods?   Some much needed perspective on the whole issue was provided by Sean O’Grady writing in today’s Independent (click here).   He calls for “sensible, intelligent rules” to govern remuneration packages and deplores the hypocrisy that sees people calling for bankers to hand back their bonuses:  “if you or I were offered a £25mn bonus, we wouldn’t hand it back.  Nor would we say no to the taxpayer paying for a second home, as our MPs did”.  Good performance should be rewarded appropriately.

This of course is the nub of the matter as far as employees (and employment lawyers) are concerned.  Over the years I have seen many people who are unhappy with the annual bonus they have been awarded and I’ve written before on the difficult legal issues that arise when it comes to challenging a bonus (click here).  In recent months with all the redundancies occurring, perhaps not surprisingly, it has become less and less common for employers to make any sort of payment in respect of bonus. When negotiating a contract of employment it is always worth trying to include provision for payment, or pro-rata payment, of the bonus that would have been received had the employee remained in employment at the payment date.

Repayment and clawback provisions in new contracts of employment are also becoming increasingly common, especially amongst those banks that have received state funds.  They will usually require that if performance (whether individual or corporate) does not match up to expectations then bonuses paid (including guaranteed bonuses) can be clawed back.  The period of time covered by the clawback can be quite lengthy, perhaps two – three years, meaning that the recipient employee can be left in some uncertainty about how secure the guarantee is. This is an issue that needs to be dealt with at the stage of negotiating the terms of the contract upon joining the business: it can sometimes be renegotiated to the benefit of the employee.   Just recently I have been instructed on a number of contract negotiations by employees who have secured offers of employment – evidence of “green shoots” perhaps?   – and some of the sting of the clawback was removed.