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December, 2007 A Merry Christmas and Happy New Year to all our clients and readers. We hope 2008 turns out to be everything you wish for.
How to Lose an Age-discrimination Case
Felix Dennis is a successful businessman who wrote a book entitled "How to get Rich". He didn't expect it to be used against him as evidence of age-discrimination.
Picasso HR in partnership with OrangeHRM
An on-line solution for management of employee information.
Is the contractor actually an employee?
The elephant test.
Felix Dennis is a fascinating guy. A best-selling poet who once recorded a single with John Lennon. A multi millionaire head of a publishing firm whose first success was Kung Foo Monthly. And whose portfolio includes Viz, Computer Shopper, Auto Express and certain “Lad Mags”. As you might expect, Felix isn’t your usual City-type. Instead of a mission statement he wrote a Company Poem as a “guardian of the Company’s spirit”. It’s called “The Bearded Dwarf” (that’s him) and it ends with the lines: “Line up along Canary wharf,
Sign up to sail the Bearded Dwarf!” Lots of people have. Dennis Publishing is in the Times top 100 companies to work for. In 2006 Felix Dennis published a book with the title “How to get Rich”. Nothing unusual about that, he’s published lots of books. But this book was used in evidence against him by an ex-employee claiming age discrimination. Now that is unusual. Mr Court, aged 55 was Promotions Director for the Motoring Division of Dennis Publishing. One day the Director of Advertising called him to a meeting to discuss new clients but as soon as Mr Court sat down he was told he was to be made redundant and given a letter to confirm it. Now while Felix Dennis’s managers may have read his book on “How to get Rich”, they clearly hadn’t read any books on “How to Handle Redundancies”. If you are a regular newsletter reader you may have already picked up the tell-tale signs of (expensive) unfair dismissal. The tribunal certainly didn’t have any problem pointing out their errors: - The Company didn’t follow the statutory dismissal procedure
- Mr Court wasn’t told he was at risk of redundancy
- Nobody else was considered for redundancy, so there was no “selection”
- No consideration was given to finding him alternative work
But the most interesting part of the case was still to come.
Mr Court made some money in a way that Felix Dennis could never have imagined when he wrote it.
Mr Court won his case and Dennis Publishing had to pay compensation for unfair dismissal and age discrimination.
Mr Court’s team were all at least 20 years younger than him.
At Mr Court’s redundancy the tribunal heard that all the managers had read his book and they decided that his philosophy had infected the company.
Mr Court quoted some passages from Felix Dennis’ book including one that read “by the time talent is in its late forties or early fifties, it will have become very, very expensive” and another that said it was unwise to “leave senior employees in any job too long”.
Mr Court claimed that he had been unlawfully discriminated against, on the basis of his age.
With discrimination claims the problem for tribunals is that people don’t usually admit it. So the tribunal has to look at the evidence and draw inferences. In this case even though Felix Dennis had played no part in it, it didn’t help the company’s cause that the other employees in
So
And the “How to get Rich” book helped
Picasso HR has partnered with OrangeHRM , a leading provider of HR Management solutions for small and medium sized enterprises worldwide. Sujee Saparamadu, the CEO of OrangeHRM Inc commented “Partnering with Picasso HR helps us to localize the application to the UK market. Also,having a reputed partner in the UK gives us the chance to meet the end users face to face and be on site if the users do have any issues .We at OrangeHRM have given great attention for prioritizing, selection and implementation of the new features, as we are trying to keep the balance between satisfaction of individual needs and application of broad perspective. Partnering with Picasso HR delivers us the best way to reach the people with respect to their HR issues. Picasso HR will help us to understand what today’s organizations expect from a Human Resource Management software. This will help us to increase the flexibility and the user friendliness of our system”. Picasso HR is offering a hosted HR Information System (HRIS) powered by OrangeHRM to enable organisations to be up and working in days. It offers a variety of features, such as Personal Information Management (PIM), Employee Self Service (ESS), Leave Management, and Time & Attendance. There is more information on our website http://www.picassohr.com/hris/hris-overview.php For an on-site demonstration call Martin on 01473 890037. Alternatively, you can try the application on-line at https://www.picassohr-online.com/hris/ To login, the user, company, and password are all 'demo'. Please be aware that all information entered is cleared each night.
Do you use self-employed workers?
The tax-man is clamping down on “Disguised Employment”
Do you dream of being your own boss? Yes sometimes. Worrying about where the next job’s going to come from, creditors going bankrupt, struggling to get the bills paid, feeling ill but can’t afford to go sick. More like a nightmare I’d say. But think of all the advantages. If you’re self-employed everyone knows you save a fortune on tax and NI. Sounds great doesn’t it? You can understand why thousands of people choose to be self-employed. Most of them are genuine. Like my plumber. They work for different clients, use their own tools, do the work when they can fit it in, and get paid by the job. But there are some self-employed people who work for the same employer all the time. They have regular hours and regular pay. And they should worry because the tax-man is on their trail! But whoever pays them can also be at risk. The rule is that it’s the employer’s responsibility to operate PAYE for employees. And just because you sign a contract to say that someone is self-employed, doesn’t make it true. It’s a bit like going to the zoo. You go into the animal house and look in the enclosure marked “giraffe”. You see an animal. It looks like an elephant, it walks like an elephant and it smells like an elephant. It’s an elephant. The tax-man treats self-employed contracts in the same way. If it looks like an employee, acts like an employee and smells like an employee, it must be an employee whatever it says on the contract. Actually, the tax-man asks a number of questions like: - Does the worker have to do the work himself or can he arrange for someone else to do it?
- Does he work for other clients as well as you?
- Is the worker under anyone’s control at work?
- Does he work regular hours?
- Is he paid to do a job or by the hour?
So what happens if the tax-man discovers an “employee” disguised as self-employed? Well the tax-man uses his amazing powers of deductive reasoning. He says that if there is an employee there must be an employer. And that employer is going to get a bill for unpaid tax and NI. And not just for this year but possibly six years.
Self-employed people often set up personal service companies to avoid liability for PAYE. The tax-man countered this move with IR35 which said that any such arrangement would be ignored for tax purposes if it was just a way of disguising employment as self-employment. IR35 has not been the success the tax-man hoped because it has been difficult to enforce. A big problem was that the tax-man could only recover lost revenue from the Service Company, which usually had no assets. From April 2007 Service Companies are forced to operate PAYE unless they are for genuinely self-employed contractors (who look like, act like and smell like self-employed contractors). And this time, the tax-man will have powers to recover unpaid tax from third parties who benefited from the arrangement. We all know who that could be, don’t we?
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