Results from the future of therapy survey

Our colleague at Middlesex University Elizabeth Cotton published the results of a national survey of working conditions in mental health services, last week.

She noted that “The survey involved 1500 respondents, including 68 in depth interviews of frontline workers in mental health. The results are devastating. The website includes a range of data and anonymised quotes from mental health workers, as well as an eBook that looks at the future trends. The survey reveals a profound downgrading of services as well as a reliance on unwaged work and precarious employment conditions now widespread across the UK. The research outlines an impending crisis in the UK’s capacity to deliver quality mental health services.”

The results for the survey and its infographics can be accessed on www.thefutureoftherapy.org

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Unpaid Britain Report launch

On 30th November we will be publishing our final report and we will be launching it at Conway Hall on that day, from 9am to 1pm. We will be discussing our understanding of how and why unpaid wages come about, and some preliminary recommendations for what could be done to tackle the issue. This is an open invitation to anyone who would like to attend. If you are interested in attending please register using Eventbrite as places are going quickly!

Programme

Time  

 

09:00-09:30 Registration & Breakfast
09:30 Welcome & introduction Chair: Jo Seery (Thompsons Solicitors)

Stephen Syrett (Business School Director of Research, Middlesex University)

09:45 Outline of findings Nick Clark and Eva Herman (Unpaid Britain project)
10:10 Responses Bharat Mehta (Chief Executive, Trust for London )
Diana Holland (Asst General Secretary, Unite the Union)
Matthew Perceval (Head Employment Policy, CBI)
10:25-10:30 Personal testimony Hospitality worker
10:30 Questions, discussion
10:45 Break
11:00 The future of enforcement Sir David Metcalf (Director of Labour Market Enforcement)
11:10 Access to justice Prof. Nicole Busby/Ele Kirk (Strathclyde University)
11:20 Questions, discussion
11:30 Report recommendations Nick Clark
11:40-12:25 Discussion of recommendations in working groups All participants
12:25 Closing remarks Jo Seery, Thompsons Solicitors
12:30-1pm Lunch

 

Speakers:

Sir David Metcalf was appointed the UK’s First Director of Labour Market Enforcement in January 2017. He is Emeritus Professor, Centre for Economic Performance at the LSE. Previously he was a founder member of the Low Pay Commission (1997-2007) and the first chair of the Migration Advisory Committee (2007-2016).

Bharat Mehta CBE is Chief Executive of Trust for London. Prior to taking up this post he was Chief Executive of the National Schizophrenia Fellowship (NSF, renamed RETHINK). He has also worked for the Medical Research Council; the National Council for Voluntary Organisations; and the Social Services Department of the London Borough of Waltham Forest. He is a board member of a number of organisations including: Home Group, one of the largest registered social landlords in the country; London Funders; and the Social Justice and Human Rights Centre Ltd. He has also served on numerous government and civil society commissions and advisory groups.

Stephen Syrett is Professor of Local Economic Development and Director of Research at Middlesex University Business School. He specialises in issues of urban and regional economic development, governance and policy and the study of ethnic minority, home-based and social enterprises and the regeneration of deprived areas. He has published widely on these topics including a number of books and many journal articles and reports. He has worked extensively with national, regional and local government bodies in the UK and internationally, as well as with a wide range of voluntary and community sector and private sector organisations.

Nicole Busby is Professor of Labour Law at the University of Strathclyde. She teaches and researches in the areas of equality and employment law, European social rights and access to justice in the employment tribunal and has published widely. She is currently a member of the Scotland Committee of the Equality and Human Rights Commission.

Eleanor Kirk is Ailsa McKay Post-doctoral fellow at Glasgow Caledonian University.  Eleanor’s research interests encompass the nature of work, employment relations, access to justice and social equality. Her current work focuses on employment rights enforcement, precarious work and ‘bogus’ self-employment. Additionally, Eleanor is a research associate at Ulster University Law School where she is working on the project: “Litigants in Person in Northern Ireland.” https://www.ulster.ac.uk/faculties/social-sciences/schools/law/research/litigants-in-person

Matthew Percival has been representing the CBI’s 190,000 member companies on employment issues since 2011 and is the Head of the CBI’s Employment Policy team, leading on issues ranging from employment law, pay and pensions, to immigration and diversity.

Diana Holland OBE is the Assistant General Secretary of Unite the Union and the current treasurer of the Labour Party. At Unite she is responsible for transport, food and equalities. She is also a long-standing member of the TUC Women’s Committee and serving as Vice-President of the Global Trade Union Confederation. She was awarded an OBE in 2001 for services to Equal Opportunities in Employment.

Address for event:

Conway Hall

 25 Red Lion Square,

London

WC1R 4RL

 To attend please register with Eventbrite any question email Eva Herman:  e.herman@mdx.ac.uk

 

 

Investigating a case study of non-payment

Yesterday the Guardian published an excellent article on the Unpaid Britain preliminary findings report. As part of this article they included an illustrative case study of Beach Blanket Babylon (BBB). This company first came to our attention at the beginning of May when the staff started protesting outside the BBB restaurant in Shoreditch, after being collectively owed £10,000 in unpaid wages.  This case was a clear illustration of what the Unpaid Britain report identified as a business strategy where unpaid wages occur repeatedly  “little and often”. The workers reported to us that the amount that they would be paid into their bank account would be random, and never completely match what they were owed.

“maybe you got £100 or £200 as you see from the statement […],when the due date for the new payslip they just send us like a couple of hundred”.

The workers  informed us that this underpayment of wages added up. They claimes that when they asked for their wages management would tell them that they did not have the money and the workers would have to wait, until the next Wednesday or Friday when they were expecting a large party. When that day came they might be paid some of what they were owed but would be told to wait again. When the workers finally demanded all their wages they said they were told to leave and not to come back.

Meanwhile the Guardian article shows that the owner Robert Newmark had received a substantial amount of money from the previous Limited company that ran BBB before it was placed into liquidation. Robert Newmark and his son Bret have both been disqualified as being directors from limited companies for a joint eight and half years. They owe HMRC “£1,021,477 in relation to arrears of VAT, PAYE and National Insurance Contributions”, despite this Robert Newmark caries on being the sole shareholder of the limited company who owns BBB, and pays the staff directly from his non-limited company.

I am sad to reveal that this is not a one off case but is something that we have come across more often with other restaurants. This we feel is a clear business strategy of non-payment and will be drawing on further in our final report that we will be publishing in November. In the meantime have a look at the Guardian article it is an excellent read and a good synopsis of our interim report. I would like to thank Felicity Laurence for her excellent work.

Once the Guardian contacted BBB some money was paid to the workers.

The delinquent employers’ dilemma: settle or dissolve?

Employment rights in the news

Last week two very interesting (from Unpaid Britain’s perspective) stories hit the headlines. In the first, Mike Ashley, owner of Sports Direct, admitted that 15 minutes of pay was deducted from workers who arrived at work even a minute late. This is a high-profile example of the low-level “gaming” of employment contracts which Unpaid Britain is studying.  The second story saw former Chelsea FC doctor Eva Carneiro  accept a settlement from Chelsea shortly before she was due to testify to an Employment Tribunal (ET). The latter story illustrates a particular phenomenon which we have been examining, as this blog will attempt to explain.

The Employment Tribunal

Since March 2016 we have been analysing Employment Tribunal cases brought before London and Watford tribunal offices for unauthorised deductions from wages. This has so far involved a two week stint at the Bury St Edmunds employment tribunal registry. Even though employment tribunal judgements are public records they can only be accessed via terminals located in the basement of Bury St Edmunds county court. There, surrounded by disintegrating boxes containing paper copies of ET judgements, we went about selecting a random sample of judgments from London for the years 2012 and 2014 (before and after the introduction of fees). Details (parties, jurisdictions, general outcome) of the judgements had to be copied from an old computer screen onto our laptops (no digital downloads!). Then we had to find and scan the paper copies of the judgements. This was a lengthy task; many copies of the judgement are mis-filed and some are absent.

ET computers  ET roling Stacks

Companies House

Back at Middlesex, we reviewed the Companies House databases for the respondent companies named in the judgements. We sought to identify the company’s status, sector and identity of their directors. Companies House has two database systems, of which Beta is the more detailed. However many of the companies don’t appear on it especially if they had been dissolved a few years previously, so a constant transition between Beta and the second (WebCheck) is required.

Half way through this process we decided to examine our findings so far, and they suggest something very interesting about employers who settle.

Preliminary Findings[1]

What is interesting is the marked difference between the status of companies for the different outcomes of claims. Where the case has been “dismissed on withdrawal”, dismissed on settlement (as in the Carneiro case) or fails at a hearing the company is most likely to be still active. Where there is a default judgement (usually occurring when the respondent i.e. the company doesn’t respond to the claim or appear at the Tribunal) or the workers’ claim was successful the company is most likely to be dissolved through insolvency or other means.  What does this reveal regarding these companies intention, or the prospects of workers recovering their wages?

Dismissal on Withdrawal

21% of outcomes out of our preliminary sample were “dismissed on withdrawal”, meaning the “claimant informs the Tribunal through writing or in the course of a hearing that the claim or part of the claim is withdrawn”, following which the Tribunal issues a judgement ruling that the claim is dismissed. This leaves the actual outcome in terms of whether the worker was successful in getting their money unknown.  A case might be settled informally, or in cases such as that of Eva Carneiro a settlement was reached during proceedings and be classified as dismissed on withdrawal. Members from the Unpaid Britain project’s Advisory group call this type of settlement “napkin cases”, when a settlement is agreed and in some cases scribbled onto a napkin just before or during a hearing. However a dismissal on withdrawal could also occur where the claimant no longer wanted to pursue the case, (for reasons such as stress or feeling that the claim might not succeed).

Settlement

Where settlements take place, it may be assumed that the worker received  at least some of their money, but judgements stating that a settlement has occurred are the smallest group amongst our sample. We had many more cases classified as “dismissed on withdrawal”, and  wanted to investigate the likelihood that these had  been withdrawn due to a settlement occurring (this had been suggested to us by legal advisors). To do this we chose to compare the status of respondent companies where we know a settlement has occurred with that of those in cases withdrawn on dismissal. We found the Companies House status of respondents in cases dismissed on settlement to be very similar to those dismissed on withdrawal, with around 80% of companies still being active.  This is in contrast to the profile of other groups of respondents.

Default Judgements and successes

Looking at cases that were Default Judgements the majority of companies appear to have been dissolved, with only a small minority still active. This may not be that surprising: if they are about to be or are already insolvent, employers may be unable or reluctant to defend the case. However where the claim was heard and succeeded (the most common outcome) the majority of respondent companies are now either dissolved or insolvent – only around 30% are still active. Research done by the Department for Business Innovation and Skills  in 2013 found that only 32% of claimants whose unpaid wage claims were successful were paid in full. Larger companies were more likely than small ones to pay awards, and this may be explained by widespread use of insolvency and limited liability to evade payment.

Failed claims

In cases which were heard, but the claim failed, our preliminary findings show that 94% of respondent companies are still active.

What the findings suggest

These findings suggest to us that the majority of cases that are “dismissed on withdrawal” are actually settled before or during the hearing.

One further hypothesis is that if an employer expects to pay the money to their workers they are likely to settle before the hearing, only going ahead with a hearing where they are confident of winning. Settling reduces litigation costs for employers, especially if the unpaid wages claim is linked to other claims such unfair dismissal or discrimination.  Cases classified as being dismissed on withdrawal leave no evidence of guilt of non-payment. This enables the employer to maintain their image both in terms of brand as well as to other employees. Thus systematic non-payment of wages can carry on unnoticed/unchallenged.

Where employers have no intention of paying, however, they may simply fail to defend, leading to a default judgement, or go to a hearing and use insolvency and limited liability to protect directors from any personal cost. It could also be that losing the ET case pushes the company into insolvency, but given that most unpaid wages claims are for few hundred pounds, this could only apply in a minority of cases.

Although we still have a lot of work to do to understand the phenomenon of non-payment and employment tribunal claims, these preliminary findings are consistent with there being a group of employers who “game” the system with apparent impunity.

For the time being we will keep you all updated. Any comments on this blog or our research are as always greatly appreciated.

 

 

 

 

[1] The preliminary findings are based on 205 cases including unpaid wage claims, predominantly made in 2012, and for which the respondent company’s identity has been located at  Companies House. The most common outcome in these cases is that the case has been “dismissed upon withdrawal”.