Our second Academy meeting was well attended.

Simon Forshaw of 11 King's Bench Walk provided the "The View from Chambers". Simon referred to:

  • a greater number of applications for interim relief by employees. Particularly in relation to whistleblowing cases, albeit with few applications succeeding. Simon stressed the need for employers to quickly prepare following such an application in order to establish a strong case as to the reason for dismissal.
  • Employment Tribunals making greater use of procedural control mechanisms in complex and lengthy cases, including an increase in making Deposit Orders.
  • A trend whereby, in the High Court, Judges are looking more closely at and/or seem to be less prepared to grant interim relief.

Jane McCafferty of 11 King's Bench Walk then led a very well received session on managing regulatory risk in employment litigation. In particular Jane focused on the recent leading team move case of Tullett Prebon Plc v BGC Brokers LP & Others and subsequent FSA infraction proceedings against one of the senior employees involved in the case, Tony Verrier.

Jane emphasised that the decision in Verrier, together with some tough talking by the FSA may herald "a new era of robust regulatory action" by the FSA, and going forward by the FCA. She referred to the FSA taking into account findings and any criticism in litigation when assessing whether a person meets the "fit and proper person" test and the advisability of FS employers embarking on initiating or defending proceedings, to carry out a regulatory risk management exercise at the outset of litigation. In particular, to consider the extent to which the litigation may involve the potential for subsequent regulatory criticism of the organisation and/or senior employees and, in connection with this, issues regarding the parties to the litigation, how a case should be pleaded, witnesses, conflicts of interest, indemnities and disclosure together with means of "drawing the regulatory sting" through, for example, any self-reporting.

Nick Hurley then led a discussion on the likely impact of employment law reform on the sector, with particular focus on the new concept of owner employee status. Some attendees referred to this as being looked at from the point of view of tax planning. Others indicated that they were considering adopting the proposal to limit unfair dismissal protection as shares would be issued to employees anyway as part of the normal remuneration review each year. The proposal for compulsory equal pay audits was also discussed.

Lastly Bob Mecrate-Butcher led a discussion regarding recent trends in FS remuneration. There was particular discussion regarding:

  • increases in base salary having led to there being less flexibility in cost base leading to quicker/more extensive redundancies. Also recent FSA comment that this is a concern to the FSA in so far as lesser variable compensation reduces the scope for compensation to act as a lever to moderate behaviour;
  • "claw back", it being clear that the FSA is expecting to see implementation of claw back provisions rather than merely "desk draw" non-utilised provision within remuneration policies;
  • the difficulty in making individuals "whole" in relation to compensation forfeited on joining from a previous employer and in ensuring that replacement remuneration is not more generous than that forfeited;
  • the continuing focus/issue regarding transparency and equal pay issues. In particular, following the FSA's clear statements of interest in the issue, the impact of the equal pay case in Birmingham City Council v Abdulla referred to above and the provision for compulsory equal pay audits.

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