Directors Remuneration

With effect from 1^st October 2013 in addition to seeing an increase in the prescribed minimum wage rates (see previous blog), we also see the introduction of the provisions of the Enterprise & Regulatory Reform Act 2013 requiring, amongst other things, disclosure and approval of remuneration rates for directors of quoted companies.  I suspect that it is fair to say that these levels of remuneration will be some way above the National Minimum Wage levels!

Since 2002 quoted companies have been required to provide a report detailing directors’ remuneration for each financial year; however, from 1^st October 2013 the details required in the annual report on remuneration are being extended and the policy is subject to a binding shareholder approval which must be confirmed by ordinary resolution carried at least once every three years.   

Shareholder approval will also be required to any change of the policy within the three year period.  Call me a sceptic but it will be interesting to see what, if any, effect this has on director remuneration.

National Minimum Wage Increases

We are at that time of year again when the National Minimum Wage rates are subject to annual review and increase.  The new rates will also now apply to agricultural workers.

From 1^st October the standard adult minimum hourly rate increases from £6.19 to £6.31, the young workers rate from £3.68 to £3.72 and the apprenticeship rate from £2.65 to £2.68.

I suppose the argument continues as to whether the imposition of minimum rates are to be welcomed because they avoid worker exploitation or are to be condemned because they discourage recruitment.  Based on the new adult rate and assuming a 40 hour working week, this current increase only amounts to an annual increase in gross income of £249.60 or £4.80 a week, which is not a great sum of money.  I struggle to see how rates at this level can prove any great disincentive to employers.

Split the Trial and Increase the Costs?

One device often used by the Court as a case management tool is to order that rather than having one final trial to resolve all outstanding issues, that there should be a split trial with certain specific items being dealt with on a preliminary basis. 

The idea behind this approach is that to deal with certain specific preliminary matters first results in a far shorter hearing than if all outstanding matters are dealt with simultaneously and can sometimes narrow the issues between the parties and encourage settlement resulting in an overall shortening of the trial length and reduction in costs.

Speaking personally I am always dubious about this approach.  Whilst it can be useful if there is a realistic possibility of a preliminary determination forcing the parties to the negotiating table, there is also a very significant risk that in fact all that will happen is that there will be two lengthy trials rather than one, with a potential lack of continuity due to the risk of a different Trial Judge, non-availability of witnesses etc.  I am pleased to note that in a recent appeal decision, the Court of Appeal has supported these reservations and in an unusual decision by an Appeal Court to overturn a case management decision, has reversed the previous direction for a split trial and warned against the potential perils of such an approach.  

As the Court of Appeal quite rightly stated, if there is a significant overlap between the evidence required to determine the preliminary issue and the remaining issues, to deal with this separately on different occasions, perhaps many months apart, is a recipe for disaster.  The case is Fox & Another v Jewell & Others.  It is always nice to give praise to the Court of Appeal!

Untaken holiday under a zero hours contract

Zero hours contracts have been taking a bit of a kicking from senior politicians of late who will no doubt be pleased to see a recent decision of the employment tribunal in Podlasiak v Edinburgh Woollen Mill Ltd. When Mrs P left her employment she was owed 3 days holiday and her employer followed a provision in her contract and paid her £1 basing the argument on her zero hours contract. 

It may sound like a good wheeze but the Tribunal were having none of it and decided that she was entitled to be paid at her “normal pay” level awarding her the princely sum of  £176. OK so still not a massive sum but an important pointer for the future where the sums involved may be higher!

Tribunal fees – the saga continues

As employees wanting to bring tribunal claims against their employers or former employers are still coming to terms with the new rules requiring payment of fees the High Court have announced that the request by the UNISON union for judicial review of the new fees has been scheduled for hearing on 22^nd and 23^rd October. In the meantime the new rules for allowing claimants to seek remission from fees will take effect from 7^th October. They are based on disposable capital and household income tests, both of which have to be passed to be eligible for a fee remission. 

The amount of disposable capital you can have before you lose the right to remission ranges between £3K and £16K depending on the level of fees payable. The income limits depend on whether the claimant is single or not and whether there are dependent children. The new rules also reduce to 3 months the period for making a back dated application for fee remission.

It is still too early to say what effect these fees will have on the number of claims issued and whether the funds generated will result in any improvement in current service levels.