Wages to rise by only 2%, according to CIPD survey

Bosses reluctant to give inflation-busting rises despite struggle to hire enough staff!

Employers expect to hand out pay rises of only 2% this year, according to a new survey of 2,000 firms — a blow to workers who have seen their incomes squeezed by inflation over the past year.

The quarterly survey by the Chartered Institute of Personnel and Development (CIPD) due to be published tomorrow, is the latest sign that bosses are reluctant to hand out inflation-busting pay deals despite labour shortages in many sectors.

Figures from the Office for National Statistics this week are expected to show average weekly pay climbed 2.5% in the year to February, the same rate as January and below the current inflation rate of 3%. Unemployment is set to stay at a four-decade low of 4.3%, according to City forecasts.

“So far there’s no tangible sign that wage settlements are picking up,” said Gerwyn Davies, senior labour market analyst at the CIPD.

The gloomy picture painted by the CIPD research counters a rosier view coming from the Bank of England, which in its own survey last week said wages were set to rise by 3.1% in 2018.

Many economists are sceptical about the Bank’s optimism, given that previous forecasts of an explosion in wages have not materialised. In May 2016 Threadneedle Street was predicting pay growth of 3.75% for 2017. Wages in fact climbed 2.5% last year.

Despite record numbers of people in work, the supply of workers has been boosted in recent years by older workers staying on in the jobs market, part-timers taking on more hours, and the arrival of migrants, said Davies.

A slowdown in immigration from the EU since the Brexit referendum could add to the upward pressure on pay. The latest quarterly immigration figures are published by the ONS on Thursday and are expected to show a further slowing of arrivals from the Continent.

Industries that rely on EU workers, including hospitality, agriculture and construction, claim they are struggling to hire enough staff.

However, employers are reluctant to boost pay to attract the workers they need, preferring to squeeze more from their existing workforce or invest in training, Davies said.

The uncertainty of Brexit has also left some firms nervous about their ability to take on higher costs.

“A lot depends how much firms are able to pass on wages in the form of higher prices,” said George Buckley, UK economist at Nomura. “It does look like wages are set to pick up, but the jury’s still out.”

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Employment: Britain has plenty of vacancies but can’t get the staff

With EU workers leaving jobs Britons don’t want to take, employers are scrabbling for solutions.

It used to be pretty easy for Alex Wrethman to find chefs. The restaurateur would stick an ad online and wait for the CVs to flood in. These days, he must work a lot harder — and even fight rivals for good staff. “It’s such a tough market, we need to get competitive,” he said. “You don’t necessarily want to walk into a restaurant round the corner and start dropping business cards, but if that’s what it takes . . .”

Wrethman estimates 10% of the positions at his three upmarket bistros are vacant, and describes marathon three-day sessions trawling LinkedIn for candidates. He draws parallels with the football transfer market, describing one of his managers as “a bit of a Mourinho” for his aggressive “tapping up” of chefs from other restaurants.

Wrethman’s west London business, Charlotte’s Group, is far from alone in its struggle to find staff.

Britain is hiring. There are a record 810,000 vacancies in the jobs market, according to the latest figures from the Office for National Statistics (ONS). With the unemployment rate at a four-decade low of 4.3%, a slowdown in the number of EU migrants coming to work in Britain is giving many businesses the jitters. Industries from housebuilding to fruit-picking complain of recruitment problems.

One element is missing from this job-seeker’s nirvana, however: the prospect of a pay rise. Traditionally, such “tightness” in the labour market has encouraged wages to shoot up, but average weekly pay grew by 2.4% last year, an improvement on recent performance but still well below the current 3% inflation rate.

Some forecasters — including at the Bank of England — say an acceleration is around the corner. Companies expect pay to rise by an average of 3.1% this year, the fastest growth for a decade, according to the latest survey by the Bank’s regional agents. Yet sceptics say we have been here before: over the past few years Threadneedle Street has consistently forecast a wage explosion that has not materialised. The glacial pace continues to confound economists’ models.

“To a remarkable degree, wages haven’t taken off,” said Paul Johnson, director of the Institute for Fiscal Studies. “There’s a big macro question: why is the British labour market working as it is?”

Wrethman’s experience offers some clues. The hospitality industry has arguably been hit hardest by shortages of workers. According to the ONS, 4.5% of all jobs in food and accommodation services are vacant, the highest rate of any sector. The problems are particularly acute in London and southeast England, where the reliance on chefs and waiters from the Continent has been greatest.

Doubt about their status after Brexit means “the Europeans who are already here are feeling uneasy about the future”, said Wrethman, 37.

That uncertainty, coupled with the weaker pound, has made it all but impossible to attract new staff from the Continent. At the same time, bosses bemoan the reluctance of British workers to pursue careers in the hospitality industry. Surely both the “skills gap” — a mismatch between native workers’ qualifications and the needs of industry — and the unwillingness of Britons to apply for certain jobs could be fixed by a pay rise?

“The idea of a skills shortage is a difficult one for economists,” said Len Shackleton, professor of economics at Buckingham University and a research fellow at the Institute of Economic Affairs, a free-market think tank. “You wonder about stories saying we need more people to pick strawberries or build homes. Why don’t the wages just rise?”

London restaurateurs say pay for chefs and less skilled roles such as kitchen porters has recently risen faster than inflation. There is little evidence of this at a national level, though: ONS figures show rates of wages growth lower than inflation in food and accommodation services over the past 12 months.

Across-the-board pay increases would mean bigger bills for customers, a tough sell in such a competitive industry.

A Brexit-induced skills shortage is more likely to put restaurant chains out of business than lead to higher pay, argued Ewan Venters, boss of Fortnum & Mason, the upmarket London department store that has had a staffing crisis in its restaurants.

“There’s an assumption that if business didn’t go and hire cheap labour from the EU, Brits would earn more,” Venters said. “But it’s not a question of going to Europe to find cheap labour; it’s a question of getting the volume of people who want to work in the sector.”

There is evidence across many sectors that better wages have failed to address longstanding recruitment difficulties, according to Heather Rolfe, a social policy analyst at the National Institute of Economic and Social Research.

Rolfe said low-skilled sectors such as food processing were already feeling the strain because of rises in the national minimum wage. “[Food processing] has to be located where the crops are grown, which is often in areas without many people. Migrants have generally been more willing to move around. There’s little sign that British workers will, even for slightly better rates of pay.”

Last week, Herefordshire-based Haygrove, one of the country’s biggest berry and cherry growers, said it would move part of its business to China because it cannot find enough fruit pickers here.

There are similar issues in some skilled sectors. John Tutte, chief executive of the construction company Redrow, said a shortage of bricklayers could put the government’s housebuilding targets out of reach, despite annual pay increases of more than 10% in the past few years.

“There’s been a skills shortage for years,” said Tutte. “It’s always been difficult to grow a skilled workforce in such a cyclical industry.”

The average salary for a bricklayer is £36,679, according to the website totaljobs.com, but they reportedly make more than £60,000 in locations where demand is high.

Tutte said Redrow has as much trouble recruiting in northern England, where the construction industry employs comparatively few EU workers, as it does in London and the southeast.

Like bosses in the restaurant business, he blames an image problem for the shortage of British recruits. “Workers in housebuilding are not badly paid — there’s no one on the bread line. But how much attraction to be a bricklayer is there among young people? Do they want to be on a site on a wet February morning?”

Redrow recently established Britain’s first housebuilding degree at Liverpool John Moores University, a move Tutte hopes will lend some academic prestige to the sector.

The government has pinned its hopes of plugging the skills gap on apprenticeships. Unfortunately, its flagship apprenticeship levy is turning into a disaster, with numbers of those starting an apprenticeship down 27% this academic year. Many companies complain the funds raised by the levy do not cover training costs, while small firms say they are struggling to navigate the system.

“We train people anyway, but the training we do doesn’t necessarily fit into the format demanded by the apprenticeship levy,” said Tom Molnar, founder of the London bakery chain Gail’s. “We have to put a lot of effort into figuring out how it works. It’s a policy with serious flaws.”

If apprentices won’t save the day, how about robots? A raft of politicians, including the chancellor, have suggested a lack of cheap labour could spur automation — helping improve Britain’s woeful productivity record in the process.

There are two problems, however. First, the most acute staff shortages are in industries least amenable to automation, such as hospitality. Second, much of the low-hanging fruit has already been harvested — witness the self-service checkouts in supermarkets. It is hard to imagine Britain’s notoriously investment-shy industries dropping many millions of pounds on expensive new kit when the future of the economy is so uncertain.

Hungry for staff, some bosses are trying more old-fashioned recruitment techniques. “A few months ago, for the first time ever, we began putting signs in shop windows saying ‘Join us’,” said Molnar.

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Millions are handed employment rights in gig economy revamp!

Millions of workers in the gig economy are set to receive new employment rights, including the enforcement of holiday and sick pay, under reforms to be announced today.

Theresa May will say that Britain will become one of the first countries to tackle the challenges of the changing world of work, pledging to help to create better, higher-paying jobs.

Ministers are responding to a review headed by Tony Blair’s former policy director, Matthew Taylor, into rights for gig economy workers. The government said it was proceeding with almost all recommendations including giving zero-hour and agency workers the right to request a more stable contract.

Ministers said that they planned to go further than the review’s proposals by enforcing workers’ holiday and sick pay for the first time, ensuring day-one rights such as holiday and sick pay entitlements and a new right to a payslip.

About 1.2 million agency workers will be entitled to a breakdown of who pays them and any costs deducted from their wages, while the Low Pay Commission will be asked to consider higher minimum wage rates for those on zero-hour contracts.

Labour criticised the government for launching consultations rather than taking immediate action while the TUC said it had taken a “baby step, when it needed to take a giant leap”. Industry figures questioned whether the government would be able to draw up a legally tight definition of “workers”.

Laws allowing agencies to employ them on cheaper rates could also be repealed, while some employment tribunal fines against employers will be quadrupled to £20,000.

A consultation will be launched to see whether laws are needed to make it easier to understand if someone is an employee, worker or self-employed, an issue that has led to a series of employment tribunal cases in recent years.

The government response will also shelve permanently plans to hike national insurance contributions for the self-employed. One business group complained that today’s announcement did not include the challenge for the self-employed of applying for mortgages and insurance products.

“It’s disappointing that these challenges have once again not received a mention,” the Federation of Small Businesses said.

Mrs May said: “We recognise that the world of work is changing and we have to make sure we have the right structures in place to reflect those changes, enhancing the UK’s position as one of the best places in the world to do business.

“We are proud to have record levels of employment in this country but we must also ensure that workers’ rights are always upheld. Our response to this report will mean tangible progress towards that goal as we build an economy that works for everyone.”

The TUC’s general secretary, Frances O’Grady, added: “These plans won’t stop the hire-and-fire culture of zero-hours contracts or sham self- employment, and they will still leave 1.8 million workers excluded from key protections.”

Torsten Bell, director of the Resolution Foundation think tank, said: “The government is right to be taking concrete measures to boost enforcement of our labour market rules and to increase the fines for employers who break them too often.”

Rebecca Long-Bailey, the shadow business secretary, said: “Launching four consultations and merely ‘considering’ proposals is not good enough. Like so much from this government, today’s response is just more words with no real action to improve the lives of the millions of people in insecure work.

“Theresa May’s failure to strengthen workers’ rights is having a real impact on people’s lives. Only recently we heard of the devastating case of a gig economy worker who died after being fined by DPD [parcel deliveries] for attending urgent medical appointments.

“Labour warned the review did not go far enough, and yet the government has failed to adequately meet even the most basic of recommendations.”

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Employers can save their employees up to £310 on pensions advice!

Employees are missing out on a valuable tax perk that cuts the cost of financial advice by up to £310 a year.

Launched last November, pension advice vouchers are a government initiative similar to childcare vouchers and the cycle to work scheme. But they have gone largely unnoticed, with few companies offering the benefit to workers.

Staff are entitled to swap up to £500 of their pay each tax year for a pension advice voucher through a salary sacrifice scheme. The voucher can be used to obtain financial advice about any sort of pension the employee has; it does not have to be about their company scheme.

Depending on the employee’s wages, the voucher costs them as little as £190, thanks to the tax and national insurance saved.

“Very few employers are offering the scheme, hence few employees are aware of it,” said Adam Price, founder of the financial adviser review website VouchedFor.

“Access to good financial advice is so important right now — and this government initiative reduces the cost by up to 62%. I would urge all employees to lobby their employers for access to this scheme.

“It’s especially urgent for the 1.2m employees who already pay for advice each year; they have only until April if they want to capture their first year’s savings.”

The £500 advice voucher broadly costs £340 for basic-rate taxpayers and £290 for higher-rate payers. For those earning £100,000-£123,000, it costs just £190. Workers earning above this pay £210.

Brian Henderson, partner at the human resources consultancy Mercer, said there were “few, if any” employers offering the benefit. “The scheme can work really well in principle, but we haven’t seen masses of interest,” he said. “If employees want it they should argue very heavily that they want it in place.

“There’s an underlying challenge with employers offering an advisory service such as the vouchers and highlighting advisers to choose from, as they worry the advice could go wrong and they’re on the hook for it.

“Also, there’s probably just a lack of knowledge. It hasn’t been well publicised.”

Workers can use the voucher with any financial adviser; they do not have to use one chosen by their employer. According to HM Revenue & Customs, the advice can be about financial and tax issues relating to “pension arrangements or pension funds, allowing individuals to make informed decisions about saving for their retirement”.

The advice can cost more than £500. Anything above this will be taxed and incur national insurance as usual. Workers with more than one employer can benefit from several vouchers in a tax year, gaining one voucher from each employer who provides the scheme.

VouchedFor offers a pension advice salary sacrifice scheme available to employers. Clients that have already paid for financial advice can submit a request via the website pensionadvicevouchers.co.uk. It will then contact the client’s employer to see if it wants to set up the scheme.

The £500 limit replaces old rules whereby employees were allowed a tax-exempt benefit of £150 of pensions advice a year.

Emma Roberts of JLT Employee Benefits believes more companies may start offering the perk after April, as employers traditionally review their benefits arrangements at the start of each tax year.

“By the time the increased limit was confirmed in legislation, most companies will have already been well down the line of finalising any new benefits for the year,” she said.

Another scheme connected to pensions advice was launched last year. Since April, savers of any age can withdraw three tax-free instalments of £500 from their pension pot to pay for advice. This £1,500 is on top of the 25% tax-free lump sum savers can typically access when they retire.

As with the pension advice vouchers, few people seem to have heard of this allowance. Pension providers are not required to offer the facility. Many are not offering it and, as a result, take-up appears low across the industry.

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Employment bounces back to a record high!

Britain’s employment rate has risen to a record high, quashing recent fears that the job boom may be coming to an end and sending the pound to its highest level since the Brexit vote.

The number of people in work rose by 102,000 between last September and November, taking the total employment number to a record 32.2 million and stunning economists who had been expecting a fall of 13,000.

James Athey, an investment manager at Aberdeen Standard Investments, said that the figures demonstrated that the economy was “on a firmer footing than many had anticipated following the EU referendum vote”.

The Office for National Statistics said that the employment rate was now 75.3 per cent, the joint highest level since records began in 1971, as Britain continued a remarkable period of job creation that began in 2012.

The figures are likely to dispel concerns about a loss of momentum in the labour market that was seen in the previous two months. Figures for October revealed that the number of people in work had fallen by the largest amount in almost three years, but economists are now treating this as a blip.

John Hawksworth, chief economist at PWC, said: “Today’s labour market data showed the UK jobs engine kicking back into life.”

Alan Clarke, an economist at Scotiabank, called the figures a “staggering bounce back after a couple of mediocre months”.

The unemployment rate remained at a 42-year low of 4.3 per cent. There were 1.4 million people unemployed between September and November, 160,000 fewer than a year earlier, and the lowest rate since 1975.

The demand for workers shows no sign of abating. The number of vacancies jumped to a record high, increasing by 17,000 to 810,000 compared with the previous three months. The biggest demand for staff was in social work, wholesaling and car mechanics.

Previous analysis by the Bank of England has suggested that vacancies can often be artificially high, however, because it costs little to advertise for staff. Often employers are merely fishing for better workers. Employers also appear to be leaning towards employing workers permanently rather than for temporary work. The number of full-time jobs rose by 173,000, while jobs that were part-time or self-employed fell by 89,000.

The issue of sluggish wage growth continues to be a dark cloud. Average weekly earnings excluding bonuses rose by an annual rate of 2.4 per cent in the three months to November. This was below the rate of inflation, which reached a near six-year high of 3.1 per cent in November, and means that wages fell by 0.5 per cent in real terms compared with a year earlier.

Stephen Clarke, research and policy analyst at the Resolution Foundation, a think tank, said: “While the squeeze is likely to ease in the coming months, we’re still £15 below the 2008 peak for average weekly earnings.”

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CV faker David Scott jailed after striking it rich as oil boss

An oil executive earning £120,000 a year who never went to university has been jailed after fabricating academic qualifications on his CV.

David Scott, 48, made up three degrees from Heriot-Watt University in Edinburgh and Imperial College London to land a job and generous package.

He awarded himself a first-class honours degree in petroleum engineering and claimed to have written a renowned academic paper by an American professor with the same name.

On the basis of his impressive CV, he was hired as managing director of Mech-Tool, an engineering company in Darlington, Co Durham.

One of his main tasks was to oversee two new multimillion-pound contracts in Kazakhstan but within three months colleagues realised that he was incapable and began investigating his background. Marshall Garner, 66, the company’s founder, discovered that Scott was a fraud who had gone into engineering after joining the army at a junior rank. He had never held an executive post in his life.

Sentencing him to 12 months in prison at Teesside crown court yesterday, Judge Peter Armstrong told him: “This was not just claiming an extra GCSE or A level, this was fraud at the highest end of CV falsehood.”

Scott admitted one charge of fraud by false representation to a value of £54,564.09 between June and August last year.

Mech-Tool, a leading company in heat and blast protection in the oil and gas sector, paid Scott a basic salary of £120,000, a resettlement package, a £10,000 car allowance and bonuses.

The court heard that after Mech-Tool won the new contracts last year, an advert was placed for a full-time managing director. It stated that the perfect candidate would have a good engineering degree and business school qualification. Jenny Haigh, for the prosecution, said: “The defendant responded and sent in his CV. He appeared to fit the criteria due to his qualifications.”

Scott claimed to have a master’s in business administration from Heriot-Watt, a master of science in petroleum engineering from Imperial College and a bachelor of science in service science from Imperial.

The decisive factor, however, was the academic paper, which appeared to prove that Scott, of Stainton, Middlesbrough, was one of the finest engineering brains in the world. He claimed to have written Nonparametric Regression For Analysis Of Complex Surveys And Geographic Visualisation.

Mr Garner later discovered it was actually written by an American professor with the same name, Dr David W Scott, but with an impressive array of genuine qualifications.

The company’s efforts in Kazakhstan were disastrous. Staff had been following a strategic plan drawn up by Scott that the judge said revealed that he was quite clearly not up to the job.

“How you thought you were going to get away with this is difficult to imagine,” he said. “Fortunately for this company they became suspicious and made inquiries and discovered your fraudulent job application. Whether people have a tendency to lie on their CVs is not for this court to comment on, but where deliberate fraud is perpetrated the court has to follow the guidelines.”

Had the company not discovered the deceit promptly, it could have cost it the contracts worth millions, which in the event were paid late because of his blundering, the judge added. In a press release announcing Scott’s role at Mech-Tool in September 2016, he was described as a “seasoned executive”. After his appointment the fraudster said that his focus would be “on using my contacts to bolster business” in the Middle East and Commonwealth of Independent States.

The court heard that Scott was of previous good character. Simon Perkins, his lawyer, said that his client had trained as a surveyor and was able to use his GPS surveying knowledge to go into geo-surveying. He added that Scott was “very, very unlikely” to end up in court again.

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Fall in employment may signal end of jobs boom

The number of people in work has fallen by the largest amount in almost three years, leading economists to wonder if the jobs boom is coming to an end.

A total of 32.08 million people were in work between August and October, 56,000 fewer than in the previous three months and the sharpest drop since May 2015, the Office for National Statistics reported yesterday.

Britain has enjoyed a remarkable period of jobs creation since 2012, with the employment rate reaching a record high of 75.3 per cent in June. Since then, however, it has plateaued.

Stephen Clarke, an analyst at the Resolution Foundation think tank, said that the jobs boom might have reached the end of the road.

“This still leaves Britain with one of the highest employment rates in Europe, though still some way behind countries like Germany, the Netherlands and Sweden,” he said.

Other analysts disagreed. Andrew Wishart, an economist at Capital Economics, said that the fall was likely to be a blip. He said: “All of the hiring surveys that we track point to annual employment growth accelerating significantly . . . while unfilled vacancies are at a record high.”

The number of vacancies increased by 14,000 to 798,000 compared with the previous three months. The biggest demand for staff was in social work, retail and car mechanics.

Previous analysis by the Bank of England has suggested that vacancies can often be artificially high, however, because it costs little to advertise for new staff. Often employers are merely fishing for better workers.

Despite the fall in the number of people in work, the unemployment rate remained at a 42-year low of 4.3 per cent. There were 1.4 million people unemployed between August and October, 26,000 fewer than the previous three months, the lowest rate since 1975. The reason that the levels of unemployment and employment both fell was due to a rise in the number of people who were classed as economically inactive.

This includes students, those on long-term sick leave, people who have taken early retirement or those who have given up looking for work. It increased by 115,000 to 8.8 million. Analysts believe that this rise is likely to be older workers choosing to take early retirement.

One source of good news in the figures was a tentative sign that wage growth has begun to pick up, suggesting that years of workers enduring sluggish pay rises may be ending.

Average weekly wages rose by 2.3 per cent in the three months to October, up from 2.2 per cent in September, while wages including bonuses rose by 2.5 per cent, the fastest increase this year.

The rise suggests that workers may be starting to push for higher pay or are asking for a better salary when taking a new job.

Economists and policymakers at the Bank of England have been left baffled over the past year that wages have failed to gather pace as the unemployment rate is now lower than the level at which workers can usually take the upper hand in pay talks.

Wage growth is running at about half the pace that was typical before the financial crisis. Wages, however, are continuing to rise more slowly than the prices of goods and services, meaning that households are feeling a squeeze on their incomes.

Inflation was at a five-year high of 3 per cent in October, meaning that wages, once they were adjusted, fell by 0.4 per cent.

Analysis
The number of people in work may have fallen by the largest amount in nearly three years but Britain’s unemployment rate continues to be one of the strongest elements of the economy (Tom Knowles writes).

Unemployment dropped by 26,000 between August to October. It is hovering at a rate of 4.3 per cent, the joint lowest since 1975, although not quite as good as 3.4 per cent in 1973.

“We’re ending the year on a strong note,” Damian Hinds, the minister for employment, said. With Brexit uncertainty continuing, economists are asking whether this could be as low as unemployment can go.

Ian Stewart, the chief economist at Deloitte, said: “The cloud on the horizon is that slowing growth next year is likely to put a brake on hiring. Our hunch is that the fall in the unemployment rate has probably bottomed out for this cycle.”

A breakdown of the figures suggests that he may be right. Unemployment rose by 4,000 in October, the first increase in a year. Yet technically, there is nothing to prevent unemployment falling further.

The issues are skills and geography, George Buckley, of the investment bank Nomura, said. “There is no guarantee that the people available are skilled in the jobs needed,” he said. “You also have to be in the right location for the opening.”

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Many bank staff will be replaced by robots, says Deutsche Bank boss

The British boss of Germany’s largest bank has warned that a large number of his staff could be replaced by robots as the financial services industry adapts to technology that will allow many jobs done by humans to be automated.

John Cryan, chief executive of Deutsche Bank, told a conference in Frankfurt yesterday that the lender would have to encourage a revolutionary spirit that could end with a significant proportion of its 100,000 staff losing their jobs or being redeployed to new roles.

“The truthful answer is we don’t need as many people . . . In our bank, we have people behaving like robots doing mechanical things; tomorrow we’re going to have robots behaving like people,” Mr Cryan said, in comments reported by theFinancial Times. “We need to admit that what we had is nice but it’s not necessarily for the future. We need more revolutionary spirit.”

Mr Cryan’s remarks are likely to cause concern in London, where the bank employs more than 7,000 staff in its investment banking business.

Deutsche Bank is based in Frankfurt and Mr Cryan told his audience in the German city that it was the obvious winner from Brexit, with financial institutions relocating staff to the EU.

“There is only one European city which can fulfil these requirements and that city is Frankfurt . . . It’s not about a choice between Dublin, Paris or Frankfurt, it’s about a choice between New York, Singapore or Frankfurt. Brexit could become a large stimulus package for Frankfurt’s economy,” he said.

 

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Employment tribunal fees are unlawful, court rules

Employers are bracing for a surge in tribunal claims after the government agreed to scrap fees for them and pay back £27 million.

Ministers said that they would take immediate steps to refund payments after the Supreme Court upheld a challenge by Unison that the charges were discriminatory.

The court ruled that the government was acting unlawfully and unconstitutionally when it introduced the fees in 2013 for claims such as unfair dismissal, equal pay and redundancy. The charges of up to £1,200 led to a 70 per cent drop in the number of tribunals in England and Wales and were condemned as impeding access to justice.

Dominic Raab, the justice minister, said: “The Supreme Court recognised the important role fees can play, but ruled that we have not struck the right balance in this case.”

Unison welcomed the ruling, which it said would mean more than £27 million would be paid back to nearly 250,000 people charged since July 2013, when the fees were introduced by Chris Grayling, the lord chancellor at the time.

Dave Prentis, general secretary of the union, said: “When ministers introduced fees they were disregarding laws many centuries old, and showing little concern for employees seeking justice following illegal treatment at work.

“The government has been acting unlawfully, and has been proved wrong — not just on simple economics but on constitutional law and basic fairness too. It’s a major victory for employees everywhere.”

David Isaac, chairman of the Equality and Human Rights Commission, said: “The right to justice must be based on the merit of your case, not your ability to pay. Thousands may have been denied of this right and priced out of getting justice. The judgment of the Supreme Court is a damning verdict on the current regime.

“The law only works if people know that it is a fair and just system and the biggest and strongest will not always win. Women face a double penalty with high fees and short timescales to bring maternity discrimination cases.”

Charlie Mullins, the millionaire founder of Pimlico Plumbers and a Conservative Party donor, described the court ruling as disgraceful. He told World at One on BBC Radio 4 that the benefit of leaving the European Union would be to get rid of “this stupid law”.

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Employee imprisoned following Court Order after sending confidential e-mails to home address!!

A recent ruling in the High Court serves as a reminder to all business owners, especially recruiters, of how important it is to ensure that contracts of engagement with employees and other personnel include strong provisions protecting your confidential information. For those in the recruitment sector this means your databases of candidates and clients – such information being the lifeblood of your business.

The facts – OCS provided aircraft cleaning services to British Airways at Heathrow, that contract was lost to a competing company, Omni Serv which took over supply of the services and transferred OCS’ staff under TUPE regulations.

Just before the transfer OCS became aware that several of their employees had transmitted OCS confidential documents and information to their home email addresses and passed them to third parties, in breach of restrictions in their employment contracts and the duty of confidence. OCS immediately applied to the High Court for an interim injunction prohibiting the employees from disclosing the information, which the Court ordered. The order also imposed an obligation not to destroy any evidence or to disclose the existence of the order.

Shortly afterwards, one of the defendants disclosed to his manager, a trusted colleague, the fact that an order had been made and then, over several days, proceeded to delete some 8000 emails. On discovering this OCS applied back to the Court which decided to send the employee to prison for 6 weeks for breaching the order.

Even though the employee breached the court order OCS was able to protect its confidential information, and this case demonstrates the serious consequences that can flow from the breach of restrictions in an employment contract. No doubt the employee is regretting his actions! Key to this however is having the right protective terms properly set out in the employment contract, a message that all businesses should heed if they are worried about loss of confidential information.

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