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The big pay-off

9th December 1993
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Page 50, 9th December 1993 — The big pay-off
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Which of the following most accurately describes the problem?

Drivers facing redundancy may have more rights than they think—employers could find that some "selfemployed" drivers will be regarded as employees by an industrial tribunal. Whether you're a driver or a boss you should know where you stand...

—. any drivers 'Vlwill never experience redundancy or attend an Industrial Tribunal.

But if your circumstances change, you might find yourself uncertain of your rights, or surprised to learn that you have any at all.

Four drivers were awarded a total of 1_8,000 in redundancy payments last month after an Industrial Tribunal found that although they were classed as self-employed by the company, and paid their own tax, they had the status of employees.

Richard Swaffield was one of six drivers who were the victims of job cuts while working for Southampton-based J&W Tipper Hire, and were released without compensation.

In advance of the full written judgement, Peter Doughty, who runs Peter Doughty Counsel and is the barrister who represented the drivers, describes the yardstick the Tribunal would have used in reaching a judgement. "The central case in a claim of this nature is Ready Mixed Concrete vs Pension Commissioners 1968. It was won by RMC. The drivers leased the vehicles through a finance company, but although they were in RMC colours and run aS RMC vehicles, they were owned by the drivers who could also substitute a service (find their own replacement driver if necessary)," he says.

"We were purely and simply drivers. We were paid on a self-billing invoice but they owned, taxed and maintained the vehicles," says a satisfied Swaffield.

Doughty regards victory in the case as important for local hauliers. "A lot of hauliers in the Southampton area run vehicles in exactly the same way as those run by this company" he says.

Jonathan Lawton, who runs his own Wigan-based solicitor firm and specialises in transport cases, says that if a transport operator sells off its fleet, makes the drivers self-employed and then expects them to report at a particular time, load, deliver and return when told, then they are exerting a degree of control that could contribute to giving the worker employee status.

Establishing vehicle ownership is an important key, and evidence that their drivers earnt significant amounts from elsewhere could be a defence for the company.

Industrial Tribunal

Avoiding redundancy payments can save a company a great deal of money. If a job is lost and a worker dismissed without compensation, it falls upon the former employee to prove it was a redundancy and this may mean going through an Industrial Tribunal.

So if it happens to be your job, what do you do? Richard Swaffield and his colleagues brought their case with the help of the Citizens Advice Bureau. But if you are in a union you have a head start.

"If a driver is made redundant I advise them first to go to the job centre for an IT1 form, a general form which is used for Tribunal issues," says Mike Durant, north west divisional officer for the United Road Transport Union. From then, as with most unions, URTU members can expect guidance and representation from officials until the case is completed.

The company has to respond to the form with reasons for its actions.

"As a general rule if your job disappears after you have been employed two years and have not been given consultation about alternative employment opportunities before you are dismissed, you have been made redundant," says Durant.

Only people aged 20 and over, and before retirement are eligible for redundancy payments. Work before the age of 18 does not count.

Jonathan Lawton, explains how the law protects employees rights: "If a liquidator is involved, and the job is finished, there is a clear redundancy issue. But even if the assets are sold, the dismissed employees rights may be protected under transfer of undertakings legislation."

Former workers

More than 2,000 former workers of the collapsed vehicle manufacturer Leyland Daf were recently awarded compensation after a Manchester Tribunal found that the company did not comply with the consultation provisions and that the redundant employees were entitled to what amounted to a damages award against the company. Some estimates have put the cost of the award against the company, at around £10m—although it is by no means clear who will pay it.

The receivers for Leyland Daf, Arthur Andersen, could have put the entire workforce on two weeks' notice immediately until the situation was clearer and the final number of necessary job cuts were known. This would have reduced lieu of notice pay when they left.

Instead, the receivers used the time and the limited funds that were available to try to save as much of the Leyland business as possible.

The Advisory Conciliation and Arbitration Service may get involved before cases actually come to tribunal, but if it is contested and you do go all the way, expect to face a chairman and two others.

Whether you represent yourself, are represented by a union representative or by a solicitor is your choice.

Keith Hearn, managing partner at Leedsbased solicitors Ford & Warren explains: With a good chairman, a newcomer is typically helped along quite objectively. But at the end of the hearing, you are unlikely to be awarded costs even if you win, unless it has been shown the company acted vexatiously, frivolously or unreasonably. Your course of action should take into account what it is likely to cost".

Individual awards depend on age, number of years worked, and a government fixed weekly wage of £205.

The maximum redundancy award by a Tribunal is £6,150, a sum based on 30 weeks—the maximum that can be claimed—multiplied by £205.

A full written judgement will be issued by the Tribunal within a few weeks of the hearing.

Further grounds

Like Richard SwatheId, once your case has been proven you may have further grounds to claim for unfair dismissal. His case comes up early next year.

Unfair dismissal awards can take into account time lost between sacking, the case coming to tribunal, plus time allowed for finding another job. This has a maximum award of £11,000. Durant says in one case he represented in Glasgow, a transport company had a higher penalty of £12,000 awarded against it.

After the judgement, appeals can be made to the Employment Appeal Tribunal and ultimately as far as the House of Lords.

If having won an award the company does not pay, you can take a certified copy of the order to the County Court which will enforce it through the local bailiff, assuming the company has any assets.

If the company has become insolvent it is a different matter. In a statement following the Leyland Daf Tribunal result, receiver Arthur Andersen explained: "Companies have all kinds of legal obligations, such as paying their creditors, but if they are insolvent, they can't—they don't have the funds. That is what insolvency means."

If the company has gone out of business, but there is no-one against whom the claim can be enforced, application can be made to the Department of Employment.

It has an insolvency fund which will finance such awards, subject to the maximum limits of course.

11 by Steve McQueen

John Allen, Amalgamated Electrical & Engineering Union's chief negotiator for Leyland Daf production workers: "Redundancy payments are insultingly inadequate. Under the government's own statutory redundancy provision, the maximum payment may be as little as £6,150 for 20 years service— the average payment will be less than 23,000. This contrasts with the Netherlands where the maximum state redundancy payment is E20,000."


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