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January 2018 Newsletter

Posted on Wednesday 31st Jan 2018

First Case of Unlawful Inducement Ever Considered by EAT

Given the rarity of these cases, since the law was passed decades ago (the Consolidation Act is 25 years old) it need not take up much space in this Newsletter. The article is of particular interest to those clients that are unionised and recognise a trade union for the purposes of collective bargaining. 

Put basically the employer Kostal UK Ltd had signed a collective agreement with UNITE giving the union bargaining rights. When a deal on a Christmas bonus payment in return for certain changes in working practices could not be agreed with the union the Company went over its head and wrote letters to all employees direct. In the second letter it informed employees that in the event an agreement could not be reached, the company may serve notice to terminate contracts of employment. A deal was finally agreed with the union but certain employees brought an action for unlawful inducement to opt out of the collective bargaining arrangements under a little known section 145B Trade Union and Labour Relations (Consolidation) Act 1992. The claims were upheld by the employment tribunal, awarding each claimant the then mandatory award of £3,800 (now £3,907) in respect of two unlawful inducements (two inducement letters were sent one in December 2015 and January 2016). An amount which was rather more than the individual’s Christmas bonus one suspects. The total award amounted to around £425,000.

Be aware. Even though laws from the 1970s designed to extend collective bargaining have long since been repealed, measures to protect collective bargaining still exist. If you do recognise a union do not be tempted to negotiate direct with its members.


The Employment Law Year Ahead

4 April 2018 – Gender Pay Gap Reporting 

If you had 250 or more employees as at 5 April 2017 then you are required to publish your first gender pay gap reports by 4 April 2018. 

6 April 2018 – Childcare voucher scheme closes to new entrants 

Although the voucher scheme will continue for existing users for as long as employers continue to offer this benefit, it will close to new entrants.

25 May 2018 – General Data Protection Regulations (GDPR) in force in all EU Member States 

We have raised this subject in previous emails and have decided that in mid- February we shall send to all clients a data usage questionnaire including the use of electronic data gathering devices. 

During 2018 – Planned extension of senior managers and certification regime 

A policy statement is expected from the Financial Conduct Authority during 2018 on the extension of the SM&CR regime to all firms authorised under the Financial Services and Markets Act 2000.

2018 Increases to Statutory Rates and Limits

The April round of updates will see the following changes 

Maternity Allowance, Statutory Maternity Pay, Shared Parental Pay, Paternity Pay and Adoption Pay all will increase to £145.18 per week (09 April 2018)

Statutory Sick Pay will increase to £92.05 per week. (09 April 2018)

National Minimum Wage Rates from 1 April 2018 (per hour):

National Living Wage (25+) – £7.83

Standard adult rate (21+) – £7.38

Development rate (18-20) – £5.90

Young workers rate (16-17) £4.20

Apprentice rate – £3.70

Accommodation Offset Limit – £7.00


Cost of Poor Housekeeping: £1 Million Pounds

Poundstretcher, has 400 stores nationwide but unannounced visits by environmental health officers (EHO) to just three of those stores, at Swindon, Newbury and Newhaven, led to the Company being fined £1m after entering guilty pleas to 24 safety offences in cases brought by the three local authorities in which the stores were situated.

(Poundstretcher's 'grossly overstocked' warehouse in Swindon. Photograph courtesy of IOSH Magazine)

The offences in Swindon were revealed following an unannounced visit to the St Margaret’s Park store prompted by a complaint from an employee. The environmental health officer found the warehouse had been “grossly overstocked” and was in a “chaotic condition”.

The local authority charged Poundstretcher with 16 offences under the Health and Safety at Work etc. Act, which included failures to keep aisles and walkways clear of obstruction, blocking fire exits and placing young persons at risk of harm. The fine in the Swindon case was £466,666.

At the company’s Newbury Retail Park store in Berkshire, emergency exits had been blocked and excessive stock had been stored dangerously. That cost Poundstretcher another £333,334.

The five remaining identical offences of “serious overstocking and poor management practices” as well as “blocked gangways” at premises in Newhaven, East Sussex. Lewes led to a fine of £200,000 being imposed at Portsmouth Crown Court. 

That all adds up to a neat £1 million. The cases demonstrate that workplace hazards that are not immediately life threatening can result in large fines for large companies especially if a company has previous H&S convictions like Poundstretcher. 

The Judge was also dismissive of Poundstretcher’s defence. He said, “To blame the local management is … deeply unattractive, coming from a major employer” Again the message is clear. Senior managers will be the ones called to account.

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