The recent indignity suffered by Home Secretary Jacqui Smith over her husband’s viewing of two “adult” films, which she then submitted as part of her parliamentary expenses claim got me thinking again about the slightly older furore over Sir Fred Goodwin and his humungus pension, and the ongoing hysteria over bankers’ bonuses. I posted a couple of weeks ago on why I thought it unlikely that Harriet Harman’s threat to take government action to recover Sir Fred’s pension would be successful. In the meantime Congress in the USA has got itself worked up into a lather over bankers’ bonuses and is considering a 90% rate of tax on all executives (from those institutions receiving state bail outs, particularly AIG) receiving compensation packages in excess of $250,000.
Bonuses, News, Politics
alistair darling, bankers' bonuses, gordon brown, Harriet Harman, home secretary, jacqui smith, pension, President Obama, Sir Fred Goodwin
Of course they do I hear you shout. In a recent case before the Liverpool Employment Tribunal a firm in Southport got themselves into a serious mess with the TUPE (Transfer of Undertaking (Protection of Employment) Regulations 2006. TUPE, for those who haven’t had the misfortune to be acquainted with it, are the Regulations that protect employees when a business (“an undertaking” in the Regs) gets transferred from one business to another. The Regs are very complicated and most employment lawyers, if being honest, would admit to loathing them. If an employee is dismissed because of a reason connected with a transfer of an undertaking, TUPE provides that the dismissal is automatically unfair.
If there was any doubt that it was then it has been dispelled by a London Employment Tribunal recently. The facts are interesting enough, but the point of law raised is potentially massive and may cause to happen what Judges fear more than anything else: the floodgates opening! Cue Biblical style disaster, get building the ark now! (Judges and lawyers always worry about “the floodgates” opening when there is a new development in law – it might mean a deluge of cases swamping the courts).
I ask this because a Private Members’ Bill, sponsored by Lindsay Hoyle MP, is currently making its way through Parliament. Its aim is to increase the level of statutory redundancy pay given to employees with more than two years’ service from the current cap of £350 per week per complete year of service (or £525 per week for workers over 41) in to line with average earnings, as opposed to RPI with which it is currently linked. This would mean an increase in the cap from £350 to £500/750. The award is made up to a maximum of 20 years’ service. Over the years it has fallen behind inflation and means that the maximum an employee made redundant at the moment can receive (in the absence of a claim for unfair dismissal or an enhanced redundancy package offered by the employer) is a maximum sum of £7,000 (for those under 41 at dismissal) or £10,500 for those over 41 (and thus would have to be 61 at dismissal with 20 years service to receive it). In addition employees are entitled to be given their contractual, or statutory notice, and can be asked to work the notice, be put on garden leave for the duration or be paid in lieu. If an employee has less than two years service with an employer he/she is not entitled to any statutory redundancy payment, only to notice.
Private Eye 14th March 2009
I couldn’t resist putting this up. The debate about Sir Fred’s pension position rolls on and there’s plenty of material on other blogs about it as well as in the newspapers. I had hoped someone somewhere would have picked up on my suggestion that he should hand his knighthood back (if not his pension for reasons i set out in my last post on the topic but I haven’t come across any comments so far.
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The recent uproar over the revelation that a company called The Consulting Association (TCA) maintained a blacklist of “problem” employees which it then passed on to construction companies, reminded me of the National Staff Dismissal Register set up in the retail industry last year and which I wrote about in these pages last October. In that case Action Against Business Crime (AABC), a consortium formed between the Home Office (!!!) and the British Retail Consortium, set up a scheme to share information between potential employers of details of employees dismissed for offences of dishonesty, but not convicted in the criminal courts of wrongdoing. In other words if an employer dismissed an employee for theft or fraud they would then place that person’s details on the NSDR and thus make it much harder for them to get alternative work, at least within the retail sector. At the time it was claimed that this didn’t breach the Data Protection Act (DPA), which claim I still find rather surprising.
A rather alarming new initiative was reported last week: the creation of the National Staff Dismissal Register, by an organisation called Action Against Business Crime (AABC), a consortium formed between the Home office and the British Retail Consortium. It is a database for employers to share details on those staff dismissed (but not necessarily convicted in the criminal courts) for offences of dishonesty; e.g. theft, forgery, damage to company property and so on. According to the AABC’s own press release the register seeks to create a central register to cover those employees not convicted or cautioned for criminal offences. It appears that it is aimed at the retail industry at the moment, although it will almost certainly spread if successful. It will go live this month. Apparently it is not in contravention of the Data Protection Act.
This is often a live issue in redundancy situations. At the moment, with the number of redundancies rocketing skywards, it is a question that is being put to me time and again. Quite often the employer’s rationale for placing a person “at risk” of redundancy can look shaky.
The definition of redundancy is found at s.139 of the Employment Rights Act 1996. It is defined thus;
(1) For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to—
I’ve been running a poll on the above topic since my post on the 27th February. Two weeks on and the results seem remarkably balanced – 38% in favour of a redundancy package and 38% in favour of a pay cut, with 23% undecided. I was expecting the clear winner to be the pay cut, given the difficulty in getting a new job at the moment. I’ll keep the poll running and see if the result changes over time.
Thanks to all those who took part.
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I’ve got to admit my ignorance, I’ve only just discovered the verb “to dooce” and what a great word it is! There are various definitions but most include ”to lose your job because of something that you wrote on your blog”. Rather incongruously, it can also mean to be afflicted with constipation, although if you were about to lose your job because you spilled the beans on your employer, it’s unlikely that constipation would be your main concern.
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