To name & shame, or not to name & shame, that is the question

In August, the Department for Business, Energy & Industrial Strategy (BEIS) named & shamed another 233 employers for non-compliance with the national minimum wage. Not surprisingly, press and media coverage of this round of naming & shaming – the 12th round since the scheme was rebooted in 2013 – focused on the list being topped by the household-name retailer Argos, which somehow managed to underpay 12,176 of its workers a total of £1.46 million.

This is, indeed, the second largest sum of arrears owed by any of the 1,279 employers named & shamed by BEIS to date, though still short of the £1.74m owed by security firm TSS Ltd, named & shamed in February 2016. And it accounts for no less than 74% of the total of £1.97 million collectively owed by the 233 employers named in the August round. Indeed, as in previous rounds, the great majority of the 233 appear to be small fry: all but nine owed less than £10,000 of arrears, and 190 (82%) owed less than £3,000.  All but 17 had underpaid fewer than ten workers, and 115 (49%) had underpaid only one worker.

As with the February 2017 round of naming & shaming, ten sectors are represented in the BEIS/HMRC spreadsheet that accompanies the press release: Agriculture (5 employers); Childcare (17); Cleaning (2); Employment Agencies (4); Food processing (1); Hairdressing (59); Hospitality (50); Leisure, Travel & Sport (2); Retail (22); and Social Care (9).

As with the February 2017 round, however, no fewer than 62 (27%) of the 233 named employers are categorised in the BEIS/HMRC spreadsheet as “Non low-paying sector”. Yet simple internet research quickly reveals that these 62 employers include three in Childcare, three in Social Care, four in Construction, and 13 in Building Services. Maybe BEIS should have a word with HMRC about the quality of its categorisation.

More interestingly, and as with both the February 2017 and August 2016 rounds of naming & shaming, what the BEIS press release failed to say is that 48 of the 233 employers also paid further arrears of £1.27 million, to 18,201 workers, under the so-called self-correction mechanism quietly introduced by BEIS/HMRC in 2015. This information was only elicited by a written Parliamentary Question by Caroline Lucas MP (aka my boss).

That £1.27 million is 2.5 times the £0.51 million of arrears owed by the 232 named & shamed employers other than Argos. But no financial penalties will have been levied on that £1.27 million of arrears, and none of the 48 have been named & shamed for their share of it. Indeed, the identity of the 48 remains a secret.

Yet it seems reasonable to assume that most of the 48 are relatively large employers  – hence the payment of self-correction arrears to 18,201 workers, 17 times the 1,088 workers to whom the 232 named & shamed employers other than Argos between them owed arrears. More to the point, the 48 clearly include the worst offenders.

As the following two tables show, such self-correction arrears now account for the bulk of the arrears ‘recovered’ from employers through enforcement of the minimum wage, and cover far greater numbers of workers than direct HMRC enforcement.

With the revelation, in September, that HMRC has written to 3,000 firms deemed to be at “higher risk” of non-compliance with the minimum wage, offering them an effective amnesty from financial penalties and naming & shaming if they fess up and self-correct the arrears owed, this imbalance seems set to become even more pronounced.

All of which begs the question, is it fair to name & shame (and impose financial penalties on) dozens of hairdressers and pubs for underpaying one or two workers a relatively small sum, when large, household-name employers can avoid both financial penalties and being named & shamed for the underpayment of comparatively vast sums to hundreds or even thousands of workers? By rights, that £6m of arrears self-corrected in 2016/17 should have attracted financial penalties of up to £12m.

Is it fair that the very worst offenders can evade the punishment handed out to non-compliant small fry? For it beggars belief that, almost 20 years after the introduction of the minimum wage, such extensive non-compliance by large, well-resourced businesses is due to technical error or misunderstanding of the law.

I’m not sure it is fair. It seems more like the slings and arrows of outrageous fortune. Maybe it is time for ministers to review the naming & shaming scheme.

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ET fees: the backlash starts

The much belated but very welcome victory for common sense and the common law – the latter being a fairly straightforward legal concept seemingly long forgotten by the allegedly planet-sized brains in the High Court and Court of Appeal – delivered by the Supreme Court on employment tribunal (ET) fees in July was always going to generate a backlash from the more intellectually-challenged sections of the employer lobby. For Pavlov’s dogs had nothing on these monotonous motor mouths.

Step forward Mark Littlewood, the rather grandly named Director General of the Institute of Economic Affairs, a once influential but now mostly ignored think tank.

On 28 August, Littlewood used an article in the Times to have a pop at the HR profession. And, in this prize example of propaganda masquerading as informed opinion, Littlewood made two stand-out statements about the cost to employers of dealing with ET cases.

One of these statements – a supposedly “illustrative” but absurdly atypical example of an ET case in which an unidentified employer allegedly spent £50,000 on legal fees alone to defend a claim worth just £15,000 – was swiftly and ably tackled by employment lawyer and blogger Darren Newman. In a nutshell, it’s easy to see why the employer now insists on anonymity. Who would want to admit to being so stupid as to be so badly scammed by dodgy lawyers?

(In fairness, I should acknowledge that, on Twitter, more than one employment lawyer vigorously defended their right to charge a client £50K to defend an ET claim worth just £15K. The words of Mandy Rice-Davies come to mind.)

However, my eye was drawn mostly to Littlewood’s claim that:

The average cost of defending tribunal litigation is calculated by the British Chambers of Commerce to be about £8,500. With more than 80,000 such applications [sic] every year, businesses [sic] are shelling out £700 million in legal fees alone. Given the Supreme Court has recently struck down the government’s policy of charging a modest fee for complainants, we can expect this number to rise.

And you do not have to be a maths genius to see that Littlewood got his ‘£700m’ figure by multiplying £8,500 by 80,000 (to get £680m, then – as will become clear later – adding a bit for ‘inflation’, because the BCC’s £8,500 figure dates from 2011). For this is the clear meaning of the first two sentences of the paragraph above. Certainly, no other figures are cited in that paragraph, and Littlewood did not demur when Neil Carberry of the CBI indicated on Twitter that ‘80,000 x £8,500’ was how he interpreted Littlewood’s £700m figure.

 

 

 

 

 

However, leaving aside the fact that the BCC’s figure of £8,500 is more than twice the £3,800 figure cited by Coalition government ministers when seeking to justify their proposal to introduce ET fees in 2011, so might be just a teeny weeny bit over-egged, the key point here is that the BCC’s figure of £8,500 relates to the average cost of defending an ET case, not an ET claim. And, in 2016/17, according to the official tribunal statistics published by the Ministry of Justice (see Table C1 of Annex C), there were 18,119 – not “more than 80,000” – new ET cases (single claims/cases + multiple claimant cases).

And £8,500 x 18,119 is £154m.

Yes, Littlewood makes the classic schoolboy error of confusing ET cases, and ET claims. He’s not the first to do so, by any means – Vince Cable made the same mistake when he was business secretary in the Coalition government – and he surely won’t be the last.

There is also the fact that approximately one-third of all ET cases are brought against an employer in the voluntary or public sectors, not a private sector business. And, in such cases, there is no direct cost to ‘businesses’. So, that £154m is more like £100m. Or £46m, if you prefer the Coalition Government’s £3,800 cost per case to the BCC’s £8,500.

And £46m is quite different to £700m.

On Twitter, I sought to draw Littlewood’s intention to these facts, pointing out that even my teenage kids could find the official ET stats online. Littlewood’s response was to try and paint me as an evil parent for introducing my teenagers to government statistics. And, when I queried whether he was drunk when tweeting that response (at 00.13am), he first tried to suggest that the official ET statistics are false, then blocked me. At which point, I suggested on Twitter that Littlewood might have a rather small willy.

A few days later, Littlewood somewhat proved my point by sending a two-page letter of complaint to my employer, demanding an apology for my tweets.

By that time, it having proved impossible to get Littlewood to explain or evidence his £700m figure via Twitter, I had submitted a formal request for a correction of Littlewood’s article to the Times. And, on 15 September, I received a response from Rose Wild, the Feedback Editor at the Times. This rejects my request, and sets out the following justification for Littlewood’s £700m figure:

The number of claims moving to a full tribunal hearing is 18,119. However, even cases that do not move to full tribunals still impose significant costs on defendants.

The British Chambers of Commerce estimated in 2011 (from 2010 research) that the costs for defending a tribunal case was at least £8,500 on average. This number has been attributed in the article.

Therefore: Costs for tribunal applications [sic] that are argued before full tribunal: 18,119 x 8,500 = £154m

Costs for tribunal applications [sic] that are not argued before full tribunal: 70,357 x 5,400 = £380m

Costs for tribunal jurisdictional complaints: 55,172 x 2,700 = £149m

Total for tribunal claims: £683m

Since these figures are from 2011, adjusted for inflation the total would be more like £800m.

Curiouser and curiouser! Given the repeated use, as in Littlewood’s original article, of the meaningless term ‘tribunal applications’, it seems reasonable to conclude that this laughable new explanation of Littlewood’s £700m figure was written by none other than Littlewood himself, and that the Feedback Editor has simply swallowed it wholesale.

The first thing to note is how far Littlewood has now rowed back from his original “more than 80,000 applications” figure. Now he says there are more than 140,000 ‘applications’ (18,199 + 70,357 + 55,172 = 143,648) a year causing a cost to businesses. So, why did he not use this figure in his original article?

The second thing to note, of course, is that 18,119 is not “the number of claims moving to a full tribunal hearing” in 2016-17. As noted above, it is the total number of new cases (single claims/cases + multiple claimant cases). And only a minority of these cases will go to a full tribunal hearing – the great majority will be settled without a full hearing, and others will result in a default judgment (again, without a full hearing).

That aside, the first (£154m) of the three elements of Littlewood’s alternative total of £683m can be accepted as the total cost to both businesses and the public sector in 2016-17, if – and, as noted above, it’s a very big ‘if’ – one accepts the BCC’s cost per case figure of £8,500. But the second (£380m) and third (£149m) elements are simply fanciful.

We can only guess where the figures of 70,357 and £5,400 come from, or what they represent, as they are neither explained nor sourced. Suffice to say, all the tribunal ‘applications’ (or cases) that “are not argued before [a] full tribunal” are already included among the 18,119 cases cited in the first (£154m) element of Littlewood’s total of £683m.

The third (£149m) element of Littlewood’s total of £683m is no less fanciful. Again, the figures of 55,172 and £2,700 are neither explained nor sourced, but there is simply no rational basis for adding the “cost of tribunal jurisdictional complaints” to the first element of £154m, as all such costs are already allowed for in the BCC’s average cost per case of £8,500.

Finally, the ‘adjusted for inflation’ total of £800m is either a typo, or inflation has been a lot higher since 2011 than I had previously noticed.

In short, the £380m and £149m figures that Littlewood adds to £154m in order to get the spurious total of £683m are simply creative figments of Littlewood’s imagination. Theresa May would be impressed, and I expect to see Littlewood put in charge of the Brexit negotiations any day now.

Does any of this matter? Well, in one sense, no. But, if we are to have a debate about how the ET system should be funded, if not by justice-denying claimant fees, then we need that debate to be based on facts, not the highly imaginative ramblings of controversialist Director Generals of fringe think tanks. [Significantly, perhaps, since I published this post the justice secretary, David Lidington, has declined to rule out re-introducing ET fees at some level in the future.]

So, I have renewed my request to the Times for a correction of Littlewood’s article, and await a further response from the Feedback Editor. I will update this post (or start a new one) when I receive that response.

Update [30 October]: So, the Times published a correction to Littlewood’s article on 17 October (but ‘forgot’ to tell me). If you look really, really hard, you might even be able to see it.

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ET fees: Supreme Court dumps on Clarke, Cable & Grayling

🙏💻🙏📱🙏

👀💻👀📱👀

😀👀😄👀😃👀😆👀😝👀😂

🚫💷🚫

💥🎉👏🍸🍻🍷🎉🍺🎂🍸🍻

👏❤️💋 Supreme Court judges 💋❤️👏

👏👊😍 Adam Creme, Shantha David & Unison 😍👊👏

👏👊😎 Dinah Rose QC & Michael Ford QC 😎👊👏

👏👍😇 Caspar Glyn QC, Sean Jones QC, Darren Newman, Abi Adams & Jeremias Prassl 😇👍👏

😱⚠️ Ken Clarke, Vince Cable & Chris Grayling. SAD! ⚠️😱

💥🎉👏🍸🍻🍷🎉🍺🎂🍸🍻

😎

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Give me six. Why not?

Extend the time limit for submitting an employment tribunal claim – from three months to six months – in cases of pregnancy or maternity discrimination. Hmmm.

Yep, I was pretty sceptical when serious people – including Equality & Human Rights Commission (EHRC) officials – first floated the idea, during the Commission’s 18-month, BEIS-commissioned and funded investigation into the extent and nature of pregnancy and maternity discrimination in the workplace.

Not because I thought it a bad idea, I hasten to add. After 13 years at Citizens Advice, and having researched and written the 2013 Maternity Action report Overdue, I was aware of and understood the problem. I just didn’t think the idea would fly. Too many employment lawyers and judges would surely say ‘But what about claimants in cases of X? Shouldn’t they have six months too?’. And the Ministry of Injustice would just say ‘no’. We can’t have women accessing justice. Not in the 21st century.

But in March 2016, after months of delay in the publication of its final report, the EHRC duly recommended “increasing the time limit for a woman to bring an Employment Tribunal claim in cases involving pregnancy and maternity discrimination from three to six months”. A few months later, the Justice and then the Women & Equalities committee of MPs agreed this was a very good idea, with the latter stating:

“There is clear evidence [sic] of a need to extend the limit for new and expectant mothers. We therefore endorse the Justice Committee’s recommendation that the Government review the three-month time limit for bringing a claim in maternity and pregnancy discrimination cases. We suggest that six months would be a more suitable time limit.”

And clear evidence there is. For example:

Sally [not her real name] suffered repeated discrimination during her pregnancy, including a downgrading of her job, and sexist comments by her manager. Then, when 32 weeks pregnant, medical complications resulted in Sally being hospitalised until she gave birth at 38 weeks. “If I had wanted to take my case to an employment tribunal, I would have had to issue the claim within four weeks after the birth of my child, in order to meet the three-month tribunal deadline. Impossible! I barely knew my name at this time, and couldn’t think beyond breast pumps and nipple cream. So how could I ever be expected to deal with the stress of standing up to fight for my rights in a tribunal?”

To the surprise of no one, least of all me, in January 2017 the Government rejected the Committee’s recommendation. However, in March this year, in a Westminster Hall debate, the chair of the Committee, former cabinet minister Maria Miller, noted that:

“Another problem for pregnant women is the time limit that precludes their taking action where there has been discrimination; action cannot be taken more than three months after the incident. I cannot recall how old your children are, Mr Chope [the Chair], but I am sure you can cast your mind back to the position three months after the birth of a child or three months after your wife might have taken maternity leave. It is a hectic time when it is difficult to think about bringing a discrimination case. There are better things to do.

I was therefore slightly disappointed that the Government said that at this point they will not consider extending that time limit for pregnant women to six months. It would be entirely appropriate to do that. I do not think ​there would be a cost to the Government in doing so, and a great deal of fairness would come into play. I hope that they can do that.”

That month, the energetic Pregnant Then Screwed group, which had latched onto the idea at an early stage, launched a campaign with the hashtag #GiveMeSix. More than 70 MPs from seven parties – Labour, the SNP, the Liberal Democrats, Plaid Cymru, the DUP, the SDLP, and the Green Party – signed an Early Day Motion in support of the campaign call. And then, in late May, the Labour Party’s general election manifesto pledged (see p109) to “extend the time period for applying for maternity discrimination to the employment tribunal from three to six months”. The idea was definitely airborne.

Sadly, of course, this and other welcome manifesto pledges – and the worst Conservative election campaign ever – were not sufficient to propel Labour into power. However, with the establishment of a hung and bung Parliament, a new Early Day Motion in support of the #GiveMeSix campaign’s policy ask has been signed by more than 80 MPs, including Labour’s Harriet Harman, Stella Creasy and Chuka Umunna, the Conservative Sir Peter Bottomley, and the Liberal Democrat former employment relations minister, Jo Swinson.

It wouldn’t hurt ministers much to concede and implement the reform. As the following chart shows, and for reasons highlighted by the BEIS/EHRC research, the number of pregnancy or maternity discrimination-related claims has never been huge, and has been even smaller since the introduction of hefty tribunal fees in July 2013. So, just as Maria Miller suggested, there’s no danger of the tribunal system being overwhelmed by a wave of new claims.

But maybe it doesn’t matter. For, when it comes to unlawful pregnancy discrimination, equalities minister Claire Perry told the House of Commons yesterday that she and business minister Margot James are “absolutely determined to sort things out” and will “come down like a ton of bricks on any employer who breaks the law”. Yes, really.

 

 

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ET fees: lies, damn lies, and Ministry number-crunching

Previously on this blog, I had a pop at the Ministry of Injustice’s attempt – in its laughably poor report of its laughably poor internal review of the ET fees regime introduced in July 2013 – to put a figure on the number of people discouraged from making an ET claim by the fees. The Ministry’s report repeatedly uses a range of “3,000 to 8,000”, but I suggested that – as the Ministry’s range of 3,000 to 8,000 is just for one 12-month period (2014/15) – it would have been more honest of the Ministry to use a cumulative total range (up to the end of 2016) of 16,000 to 53,000.

However, as barrister and #ukemplaw hero Michael Ford QC was quick to point out on Twitter, the lower bound of the Ministry’s range (i.e. the “3,000” figure) is utterly worthless, because it is based on two wholly unreliable figures in a laughably poor Acas report on Acas early conciliation. And I completely agree – the Ministry calculated its lower bound using two figures in the Acas report (namely, the 31% and 34% figures that I attack in my previous post) that bear no relation to the known reality (the actual figures are 15% and 22% respectively).

The same cannot be said of the upper bound of the Ministry’s range (i.e. the “8,000” figure), because the Ministry calculated that figure using the known reality figures (i.e. the 15% and 22% figures ignored by Acas in its laughably poor research report). And, if we accept the methodology used by the Ministry to calculate that upper bound, we can generate an alternative range for the (cumulative total) number of people discouraged from making an ET claim by the fees since July 2013.

At this point, it gets a bit complicated to explain, so the easiest way to do so is to use the figures set out in Table 14 on page 83 of the Ministry’s report. The lower bound of the alternative range is calculated by taking the Ministry’s figure of 8,000 for the number of Early Conciliation (EC) users who did not settle but did not progress to an ET claim, and who said (according to the Acas research) that they could not afford to pay the fees, and then scaling up to give a cumulative total (to the end of March 2017) of 30,900. And the upper bound of the alternative range is calculated by taking the Ministry’s figure of 14,000 for the number of EC users who did not settle but did not progress to an ET claim, and who said the fees were a factor in that decision, and then scaling up to give a cumulative total (to the end of March 2017) of 54,300.

In short, this alternative range for the total number of people discouraged from making an ET claim by the fees since July 2013 is 30,900 to 54,300. And, at this point, it is perhaps worth comparing that range against my own suggestion of the total number of ET single cases/claims lost to fees since 2013, based on the difference between the actual number of such cases plus the number of cases conciliated by Acas, and the number of such cases we could have expected, had fees not been introduced. That figure – shown by the red area in the following chart – is 70,059 (up to the end of March 2017).

However, as noted in my previous post, those 8,000 and 14,000 figures calculated by the Ministry are, without doubt, significant underestimates. So, even a range of 30,900 to 54,300 is conservative, and it is entirely credible that every single one of those 70,059 single claimants ‘lost’ to fees since July 2013 was discouraged by the fees. But the truth is, there’s no way of knowing from the Ministry’s review report, because the Ministry didn’t do (or find) the necessary research. The Ministry simply took some woefully inadequate (and unrepresentative) research by Acas and did a few basic – and, as I’ve sought to show, inappropriate – sums.

Hopefully, the Supreme Court has been no more impressed by this charade than me. But I’m not holding my breath.

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ET fees: a statistical injustice

The quarterly employment tribunal (ET) statistics issued by the Ministry of Injustice haven’t been terribly newsworthy since the figures became somewhat lacking in variability in mid-2014. So there was very little chance of the latest set – published at 9.30am yesterday, as a weary nation dragged itself to the polls – generating headlines. But it does provide me with an excuse both to update a couple of charts, and to have a long overdue pop at the laughably poor report, published in January, of the Ministry’s internal review of the ET fees regime introduced in July 2013. So, here’s an updated chart:

There is much that can be said about the Ministry’s report of its much-delayed internal review – very little of it complimentary. But in this post I’m going to focus on the report’s repeated use of a range of “between 3,000 and 8,000” for the number of people that it candidly accepts have been “discouraged from bringing [ET] claims” by the hefty fees.

The report is written in such a way that a reader unfamiliar with the subject might easily conclude that “between 3,000 and 8,000” represents the total number of workers discouraged from making an ET claim by the fees since 2013. In fact, it is the Ministry’s figure for just one financial year, namely 2014/15. And, in the real world, between 2014/15 and the publication of the report in January of this year, we had the whole of 2015/16 and three-quarters of 2016/17. And let’s not forget the two-thirds of 2013/14 that came before 2014/15, but after the introduction of fees on 29 July 2013. On that basis, it would have been more honest of the Ministry to give a cumulative total range of ‘between 8,000 and 30,000’. Which is a little scarier than “between 3,000 and 8,000”.

However, the Ministry bases its range of “between 3,000 and 8,000” on a single finding in the Acas research report, Evaluation of Acas Early Conciliation, published in April 2015. And that report, as the Ministry pretty much acknowledges, is itself a pile of pants. The first key finding of that Acas research, which was based on a survey of a sample of workers who had used the (mandatory) Early Conciliation (EC) process, was that 31% of the workers in the sample obtained formal settlement of their potential ET claim (either through Acas, or privately). The research also found that 17% of the sample surveyed “did not obtain a formal settlement but decided not to submit a claim about their dispute, and reported that Acas was a factor in helping them reach this conclusion”.

The second key finding of the Acas research was that 34% of the workers in the sample did not obtain a settlement, and went on to issue an ET claim. Another 19% did not obtain a settlement, but did not issue an ET claim, with 5% saying the fees were a factor in the decision not to issue an ET claim, and 14% saying the fees were not a factor in that decision. The research then broke that 5% down even further: 3% said they “could not afford to pay the fees”, and 2% “gave another reason”. The Ministry then extrapolates that 3% figure to all 83,423 EC users in 2014/15 to generate the 3,000 figure in its range of “between 3,000 and 8,000” workers discouraged from making an ET claim by the fees, and to a much broader measure of “claimants who did not settle [as a result of EC] but did not progress to a tribunal” – which, according to Acas’s real world management information, was 63% of all 83,423 EC users in 2014/15 – to generate the 8,000 figure in its range of “between 3,000 and 8,000”. Still with me?

Again, it would have been more honest of the Ministry to use the 5% figure, not the 3% figure. As the Law Society noted in March, in its response to the Ministry’s review report, “there is no good reason to suppose that, when the [surveyed EC users] said that they could not afford to pay the fees, they did not mean it”. But it is also perfectly possible for a worker to be discouraged from making an ET claim by the fees, despite being able to afford to pay the fees. For example, a worker looking to recover £250 of unpaid wages or holiday pay from a former employer might well conclude that it is not worth paying £390 in fees to do so, when there is no guarantee of recovering either the unpaid wages (or holiday pay) or the fees, even if the claim is successful. And using the 5% figure, rather than the 3% figure, would have raised the cumulative total range to ‘between 16,000 and 53,000’. Which is a lot scarier than “between 3,000 and 8,000”.

Yet, as the Ministry’s report candidly admits, the 31% and and 34% figures – i.e. the two key findings of the Acas survey – are total bollocks (the report puts it slightly differently). Sure, those are the figures produced by the Acas survey of a sample of EC users. But we happen to know the actual figures for the parent sample of all EC users: as set out in paragraph 120 of the Ministry’s report, they are 15% and 22% respectively. In other words, the sample and the survey findings are not representative of all EC users, so cannot be extrapolated to all EC users – or, more accurately, should not be extrapolated to all EC users. Furthermore, the combined effect of these two unrepresentative research findings is, as the Ministry acknowledges, to “underestimate the proportion of [EC users] who did not, or were unable to, conciliate and did not go on to issue” an ET claim. In plain English, both the 3% figure used by the Ministry and the 5% figure that I say it should have used instead are almost certainly significant underestimates of the proportion of EC users who do not settle but do not issue an ET claim, at least in part because of the fees.

For the sake of argument, let’s assume (somewhat conservatively) that the 5% is actually 8%. That would change my suggested range of the cumulative total of workers prevented (by an inability to afford the fees) or simply discouraged from issuing an ET claim by the fees since July 2013, from ‘between 16,000 and 53,000’ to ‘between 22,000 and 70,000’. Which is a hell of a lot scarier than “between 3,000 and 8,000”.

The Ministry is not scared, however. Indeed, it’s not the least bit bovvered. Although the review report goes on to admit (in paragraph 318) that the Ministry’s own analysis “indicates that the introduction of fees may have resulted in indirect discrimination”, this discrimination is “justified” because the fees are “a proportionate means of achieving a legitimate aim”. This is the line parroted by the Prime Minister, Theresa May, when she said recently that the fees ‘strike the right balance’ (presumably, the balance between protecting exploited workers’ access to justice, and helping the Ministry of Injustice balance its books).

Fortunately, thanks to the brilliance and tenacity – over four long years – of Adam Creme, Shantha David and the rest of the UNISON legal team, whether or not the hefty fees ‘strike the right balance’ is still a (legal) moot point. So, for those of you who prefer whole years to quarters, here’s another updated chart:

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BEIS: Not so good with the name thingies.

“I’ve never been too good with names,” sang Evan Dando and The Lemonheads on the title track of their fifth album It’s a shame about Ray in 1992. The song (and the album) is an indie classic that has easily stood the test of time. Well, it has in my house. Which is more than can be said for the Department for Business, Energy & Industrial Strategy (BEIS, formerly BIS), and its policy of naming & shaming employers found by HMRC to have flouted the National Minimum Wage (aka the National Living Wage, for those aged 25+). Not only does the naming & shaming scheme lack transparency – essential to the very purpose of the scheme – but it is not being fully applied to the very worst offenders.

Never slow to blow its own trumpet, in February this year BEIS puffed its latest round of naming & shaming (the tenth round to date) as listing a “record number” of NMW rogues. But of course, the 359 employers named in February was only a record number because six months had passed since the previous round, in August 2016, which BEIS trumpeted then as “the largest ever list of NMW offenders”. In contrast, the first eight rounds (in 2014, 2015 and early 2016) had come at much shorter intervals of as little as four weeks, and it is clear that the scheme, revamped in late 2013, is only now approaching full speed. I imagine BEIS officials are under strict instructions to ensure that the next round includes at least 360 employers.

Most of the associated press and media coverage focused on the list being topped by the household name retailer Debenhams, which had been found to owe total arrears of almost £135,000 to 11,858 workers. This is, indeed, the second largest sum of arrears owed by any of the 1,046 employers named & shamed by BEIS to date (since the naming scheme was revamped in late 2013), though still someway short of the whopping £1.74m owed by security firm TSS Ltd, named & shamed in February 2016. However, of more interest to me was the fact that, for the first time, BEIS published alongside its press notice (scroll to the bottom) an Excel spreadsheet giving basic details of each of the 359 employers.

Alongside the employer’s full name and address, and the sum of arrears owed to workers, the spreadsheet categorises each employer by sector – information that has not been available from BEIS for the previous nine rounds of naming & shaming. Since 2014, I have spent many happy hours surfing the internet in order to produce my own breakdowns of the named employers by sector, set out in some colourful charts. But I do have better things to do with my time, so it’s very welcome that BEIS have started to share their data.

Ten sectors are represented in the BEIS spreadsheet: Agriculture (4 employers); Childcare (20); Cleaning (6); Employment Agencies (8); Food processing (3); Hairdressing (39); Hospitality (84); Leisure & Sport (11); Retail (51); and Social Care (24). There is also one employer categorised as sector Not Known.

Social Care is a sector that has featured far less in the previous naming and shaming rounds than one might have expected, given its well-deserved reputation for low pay. According to the BEIS spreadsheet, three of the 24 Social Care employers named in February had underpaid 47, 40 and 19 workers respectively, but only four of the 24 had underpaid more than four workers, and 15 had underpaid only one worker. All but six owed total arrears of less than £1,000, and 14 owed less than £500; the ‘worst’ offender owed some £17,680 to 40 workers. Which tends to suggest that most are either small employers or relatively marginal offenders, or both.

Somewhat unhelpfully, however, no fewer than 109 of the 359 named employers are categorised in the BEIS spreadsheet as “non low-paying sector”. Yet simple internet research quickly reveals ten of these 109 employers t0 be in the Social Care sector, eight in Retail, three in Childcare; three in Leisure & Sport, two in Hospitality, and one in Cleaning. And, among these ten Social Care employers, for example, Pembrokeshire Care Ltd in Haverfordwest owed more than £55,000 to 154 workers, while the “national social care charity” Community Integrated Care owed almost £20,000 to 69 workers.

Indeed, the ten Social Care employers wrongly categorised by BEIS as “non low-paying sector” between them owed twice as much in arrears (£86,033.61, to 326 workers) as the 24 Social Care employers that BEIS categorised correctly (£43,636.90, to 145 workers). It’s not clear how BEIS managed to not even suspect that employers called Apollo Care, Bay Care Domicilary Care Ltd, Community Integrated Care, Pembrokeshire Care Ltd, and Tailored Care Ltd might be Social Care employers, but maybe BEIS really did get Evan Dando to compile their Excel spreadsheet.

Whatever, here is an updated chart showing the number of employers named and shamed by BEIS to date, by sector (sectors with fewer than 15 named employers not shown).
While BEIS deserves credit for publishing the Excel spreadsheet alongside its press notice – a practice I hope will continue – the biggest problem with the naming & shaming scheme is what BEIS doesn’t tell us about the named employers. According to the spreadsheet and the press notice, the 359 employers named in February between them owed arrears of £994,685.83, to 15,513 workers. And between them they paid financial penalties of “around £800,000” on those arrears (penalties are currently levied at a rate of 200% of total arrears owed, but that rate only applies to underpayments made after 1 April 2016; for underpayments made between 7 March 2014 and 1 April 2016, the penalty rate is 100%, and for underpayments made prior to 7 March 2014 it is 50%; the penalty is also reduced by 50% for prompt payment of the arrears owed).

What you won’t find in either the press notice or the spreadsheet, however, is the fact that 60 of the 359 employers paid further arrears totalling £1,435,419, to 30,496 workers. This information was only extracted from BEIS by a written Parliamentary Question, and BEIS has refused to identify the 60 employers, or how much each one paid in further arrears. But, given the total sum of further arrears paid and number of workers involved, it seems reasonable to assume that at least some of the 60 are relatively large employers. More to the point, they clearly include the worst offenders. For all we know, some of those Social Care providers named & shamed by BEIS in February for underpaying just one or two workers might actually have underpaid dozens or even hundreds of workers.

Much the same happened with the previous round of naming and shaming, in August last year. According to the associated BEIS press notice, the 197 named employers between them owed arrears of £465,290, to 2,166 workers. But, according to BEIS’s answer to another written Parliamentary Question, 22 of the 197 employers paid further arrears totalling £410,967, to 1,574 workers. But the identity of the 22 remains a secret.

These further arrears were paid under a so-called self-correction mechanism quietly introduced by HMRC (presumably with BEIS’s blessing) in 2015. The new practice was never formally announced, but in October 2016, in its Evidence for the Low Pay Commission’s Autumn 2016 Report, BEIS stated:

“Where HMRC have investigated an NMW complaint, found arrears and issued a Notice of Underpayment detailing those arrears and penalty due in respect of the complainant [sic], they have the flexibility to instruct the employer to self-correct for the rest of their payroll – freeing up HMRC staff to work on more investigations. This approach is only used in cases where it is deemed appropriate and HMRC follow up with a sample of workers to ensure the arrears due have been paid.”

As is clear from the figures above, HMRC is deeming it ‘appropriate’ to apply the mechanism in respect of substantial sums, owed to a significant number of workers by a relatively small number of (presumably large) employers. Indeed, in its answers to further Parliamentary Questions, BEIS has confirmed that, in 2015/16, 113 employers took advantage of this mechanism to self-correct additional arrears of £3.84m, owed to 17,637 workers. And, not only will those employers not be ‘shamed’ for those sums by BEIS in its naming & shaming rounds, despite them being the very ‘worst’ offenders, but no financial penalties are imposed in respect of those additional, self-corrected arrears.

All of which somewhat defeats the very purpose of the naming & shaming scheme.

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