As those of you who have had experience of incorporating companies in India will be aware, this is a laborious and bureaucratic process. In recent months, it has been taking on average between 12-15 weeks to jump through the numerous hoops stipulated by the MCA. This is alarming when you consider that in the UK, a private limited company can be set up within less than a day. Over the years, the complexity of the Indian company incorporation process has been a source for much frustration for foreign investors who have had a commercial imperative to incorporate as soon as possible.

The MCA proposes to make greater use of IT to speed up the company incorporation process. For example, when applying for Director Identification Numbers (DINs) it will no longer be necessary to file hard copies of supporting documents. Scanned copies will suffice.

In our view, this is undoubtedly a step in the right direction taken by the Indian Government. As India  integrates more and more with the global economy and seeks to attract more foreign investment, it will have to tackle head on the levels bureaucracy involved in dealing with public authorities for activities such as incorporating companies. The increased use of online filing systems should be championed as a means to reduce corruption levels by eliminating those so-called  “middlemen” or “Babus” working at Indian public authorities.

A copy of the MCA Circular bringing to notice the proposed changes can be found at http://www.icsi.edu/webmodules/LinksOfWeeks/Circular_6-2011_8mar2011.pdf

BUDGET 2011: OSBORNE’S FUEL IN THE TANK FOR THE BRITISH ECONOMY?

AN MLS CHASE LLP BUSINESS BRIEFING

UK Chancellor George Osborne unveiled his first annual budget today. Since the formation of the coalition Government a little over a year ago, much has been made of their intention to cut spending as far as possible.

The debate in Parliament and the media appears to be crystallising into the question of whether the cuts (or “savings”, depending on your political sympathies) encourage economic growth through the freeing up of the private sector, or jeopardise growth through mass unemployment on a scale the private sector cannot absorb.

Today’s budget is therefore the Chancellor’s attempt to provide some detail on how he intends to navigate the tricky route ahead.  As is now the norm, we were given a taste of what to expect in the form of a series of headlines leaked and briefed by the Treasury in the past few days.  These included combining National Insurance and Income Tax, which was not in the budget.

This was actually Mr Osborne’s second budget following the initial ”emergency” budget unveiled in June shortly after the coalition took power.

What follows is a summary of the Chancellor’s budget statement. Traditionally, understanding the true detail of the budget and the accompanying red book takes some days, a PhD in Advanced Whitehall Studies and a series of off the record briefings with Treasury advisors. In the meantime, the following is a summary of headline measures.  To see the budget document, click here.

There are some areas not addressed in the Chancellor’s statement which I am expecting to be addressed in the small print of the budget document, or in the course of the next week or so.  Please let me know if you would like an update on these issues as and when the position becomes clearer.  In the mean time, you can follow the developing reaction to the budget here:

Financial Times

BBC
Guardian
Daily Telegraph
Twitter (#budget)
Google News Aggregator

For more information, please contact me at peter.daly@mlschase.com.

HELP FOR BUSINESS

Corporation tax to be cut by 2% in April, not 1% as previously planned

Bank levy to be adjusted so banks do not pay less tax as a result

43 tax reliefs to be scrapped as part of simplification of tax code

£350m of business regulation to be scrapped

No new regulation on firms with fewer than 10 staff for three years

Business rate relief holiday for small firms extended for another year

New rules to require planners to prioritise growth and jobs

£100m funding for science facilities

21 “enterprise zones” to be launched, backed by tax incentives

UK ECONOMY

2011 growth forecast downgraded from 2.1% to 1.7%

2012 forecast also down from 2.6% to 2.5%

Inflation set to remain between 4% and 5% in 2011

BORROWING

Forecast borrowing of £146bn this year, £2.5bn lower than anticipated

Borrowing to fall to £122bn next year, dropping to £29bn by 2015-16

National debt forecast to be 60% of national income this year, up to 71% in 2012

JOBS AND SKILLS

Funding for 12 further university technical colleges

40,000 new apprenticeships for young people out of work

Funding for 100,000 work experience placements

PENSIONS

Accepts Hutton review of reform of public sector pension contributions

Long-term aim for £140 a week flat-rate state pension – not to apply to current pensioners

TRANSPORT

£100m for repairing potholes in England

£200m support for regional railways in England

GREEN MEASURES

£2bn extra funding for Green Investment Bank – to launch in 2012

INCOME TAX

No personal tax increases

Personal tax allowance to rise a further £630 to £8,015 in April 2012

Consultation on long-term plan to merge income tax and National Insurance

50% top rate of tax to remain but review of how much it raises

OTHER TAXES AND ALLOWANCES

Council tax to be frozen or reduced this year in every English council

10% discount on inheritance tax for people leaving 10% of estate to charity

Rise in air passenger duty to be frozen this year

Private jet users to pay passenger duty for first time

Levy on so-called “non-doms” up to £50,000 for those resident in the UK for 12 years

Tax avoidance clampdown to raise £1bn this year

Support for families in the south-west of England with water bills

HOUSING

Government-backed shared equity scheme to help 10,000 first-time buyers

FUEL, CIGARETTE AND ALCOHOL DUTIES

Fuel duty to be cut by 1p per litre from 1800 GMT

Planned 4p per litre rise due in April to be delayed to 2012

Annual fuel duty escalator to be scrapped until 2015

VAT on fuel will not be reduced

No additional changes to alcohol duty rates

Tobacco duty rates up by 2% above inflation, duty regime to be reformed

MLS Chase LLP  are frequently asked to advise on choice of law clauses in employment contracts.  These are common where an employee works in a cross-border employment, signing his contract in one country and then working in different jurisdictions, often across continents.

The European Court of Justice has again turned its thoughts to this issue and has underlined the fundamental differences between employment law and general commercial law.  In short, the employment contract should be read to give maximum advantage to the employee.

The case – Koelzsch (Area of Freedom, Security and Justice) - concerned a determined German truck driver.

He worked under a contract of employment signed in Luxembourg, which expressly chose Luxembouregois law as governing the employment relationship.  When a dispute arose, the truck driver first lodged his claim in Germany where the prevailing law was more favourable to him.  The German courts refused jurisdiction on the basis that the employment contract specified Luxembourgeois law.  The truck driver then brought his claim in the Luxemboug courts, but asked them to apply German law in reaching their decision.  They refused to do so.  He then sued the Luxembourg state for judicial maladministration.  He lost, but appealed.  The appeal courts referred the matter to the European Court of Justice (ECJ) for a ruling.

The ECJ applied Article 6 of the Rome Convention, which states that the country in which an employee works is the one in which an employee “performs the greater part of the his obligations towards his employer”.  But the ECJ went further, stating that the aim of Article 6 was to protect the employee.  Therefore, even where there was a choice of law in the employment contract, the employee could rely on mandatory provisions from other relevant jurisdictions.  In this case, it meant that the truck driver was in effect entitled to the protections of Luxembourg law, as the various courts he had applied to had ruled.  However, this could be “topped up” with certain elements of German law, where it was advantageous to the employee to do so.

While this approach has been applied before, the relevance of its application to the Rome I Regulation, which superceded the Rome Convention in December 2009, makes this ruling particularly relevant for all employers with a cross-border workforce.

The lesson from an employer’s perspective is that a valid choice of law clause will restrict an employer, but will not necessarily define the law under which an employee can bring a claim.

1. Product placement and other commercial references in TV programming; and
2. paid-for references to brands and products in radio programming.

The new rules for paid-for references to brands and products in radio programming took immediate effect on 20 December 2010 and were incorporated into the new Broadcasting Code.

The new rules for product placement and revised rules for other commercial references in TV programming were issued but do not come into force until Monday 28 February 2011. These rules will lift the prohibition on product placement but the Broadcasting Code will still contain a number of restrictions including the types of programmes where placement will not be allowed, and what products can be placed.

Until 28 February 2011, broadcasters must continue to comply with the existing rules set out in the Broadcasting Code. Therefore, product placement in UK-programmes will not take place until the new rules come into force.

Default retirement age

The government proposes to abolish the default retirement age (DRA) of 65 on 1 October 2011, with transitional arrangements beginning on 6 April 2011. Employers giving notice of retirement after 5 April 2011 will no longer be able to rely on the DRA. The government consultation on this proposal closed on 21 October 2010 and, although BIS had advised that the government’s response to the consultation would be published “before Christmas”, it is now advising that it will be published “later on this month” (January 2011).

Bribery Act 2010

The Bribery Act 2010 received Royal Assent on 8 April 2010 and is due to come into force in April 2011.

The Act will introduce a new strict liability corporate offence of failing to prevent bribery by individuals acting on behalf of an organisation. The only defence open to employers will be to show that they have “adequate procedures” in place to prevent bribery and corruption. What should amount to “adequate measures” was subject to a government consultation on its proposed draft guidance that closed on 8 November 2010. The response to the consultation is expected to be published early in 2011, together with the final version of the guidance.

Equality Act 2010: provisions coming into force in April 2011

The majority of the provisions of the Equality Act 2010 (EqA 2010) came into force on 1 October 2010. However, the following provisions are ones that the government needed to consider further:

• The socio-economic duty on public authorities;
• Combined discrimination;
• Gender pay gap information;
• Provisions relating to positive action in recruitment and promotion;
• The public sector equality duties.

On 17 November 2010 the government confirmed that it was not now going to bring into force the section introducing a socio-economic duty for certain public bodies.

On 2 December 2010, the government published The Equality Strategy – Building a Fairer Britain which confirmed:

• Positive action in recruitment and promotion. These provisions will be brought into force in April 2011. Employers will be allowed “to apply voluntary positive action in recruitment and promotion processes when faced with two or more candidates of equal merit, to address under-representation in the workforce”.
• Gender pay reporting. The government does not at this time intend to commence, amend or repeal section 78 which could introduce mandatory gender pay reporting for some employers. Instead, the government intends to work with businesses and others to develop a voluntary scheme for gender pay reporting in the private and voluntary sectors. This will be available to all private and voluntary sector businesses, but aimed in particular at those with 150 or more employees.
• Combined discrimination. It is of note that the government’s equality strategy document does not mention the provisions relating to combined discrimination. This has led to speculation that the government does not now intend to bring those provisions into force.

Extension of flexible working

The government has announced that the right to request flexible working will be extended to parents with children under 18 from April 2011. The new right will benefit an estimated 300,000 people, and help create a fairer, family-friendly society, according to Employment Relations Minister Edward Davey. A consultation on how to extend this right to all employees and create a new system of flexible parental leave will be launched later this year.

Limits on tribunal awards to increase from 1 February 2011

The Employment Rights (Increase of Limits) Order 2010 (SI 2926/2010), was laid before Parliament on 10 December 2010. The Order sets out the increases to the limits on tribunal awards from 1 February 2011. Notably, the maximum compensatory award for unfair dismissal will rise from £65,300 to £68,400 and the maximum amount of a week’s pay, used to calculate statutory redundancy pay (among other things), will rise from £380 to £400.

New statutory payment rates from 11 April 2011

On 9 December 2010 the government announced the proposed rates of statutory benefits which are expected to apply from 11 April 2011, including:

Statutory Maternity Pay, Statutory Paternity Pay and Statutory Adoption Pay. The standard rates will increase from £124.88 to £128.73. The weekly earnings threshold for these payments will rise from £97 to £102.

Statutory Sick Pay. SSP will increase from £79.15 to £81.60, with the weekly earnings threshold also rising from £97 to £102.

Maternity allowance. This will increase from £124.88 to £128.73, with the earnings threshold remaining at £30.

Updated disability guidance

The outcome of the Office for Disability Issues’ consultation on its proposed changes to the Guidance on matters to be taken into account in determining questions relating to the definition of disability is awaited. The consultation closed on 31 October 2010. The revised Guidance takes into account the changes introduced by the Equality Act 2010 on 1 October 2010, including the removal of the list of “capacities” and the introduction of the concept of “protected characteristics”. It has also been updated to reflect recent case law developments concerning the statutory meaning of “likely” and the cumulative effect of more than one impairment. The revised Guidance is not expected to come into force until April 2011.

Legislation currently under on hold or under review

Unfair dismissal qualifying period

On 1 November 2010 the government advised that it is currently considering whether to increase the period of qualifying service required for “ordinary” unfair dismissal claims from one to two years as part of its effort to support small businesses.

Additional paternity leave and pay regulations

In September 2010 the government confirmed that these regulations would remain in force “as an interim measure” in order to facilitate its plans to extend flexible working rights and encourage “shared parenting from the earliest stages of pregnancy”.

Vetting and barring scheme

Following the government’s announcement in June 2010 that the vetting and barring scheme would be “remodelled”, the government launched a major review of the scheme in October 2010. The outcome of the review is not expected until early 2011.

Immigration

In September 2010, Immigration Minister, Damian Green, confirmed an official government review into the UK’s immigration system will take place, with a view to introducing new, more effective, rules. According to Mr Green, recent plans to limit the number of non-EU economic migrants entering the UK will not go far enough in lowering net migration levels.

On 24 November 2010 the government announced the cap that will apply to certain categories of non-EU migrants from April 2011.

48-hour week for doctors

In August 2010 it was reported that the government is to review the 48-hour working week limit for doctors, set by the Working Time Directive (2003/88/EC).  A survey by the Royal College of Surgeons found that 80% of respondents felt hospitals were much less safe since the application of the 48-hour working limit to junior doctors in August 2009, and that the rules were placing patients’ lives at risk. A spokesman for the Department of Health has recognised the “clearly unsatisfactory” system currently in place, and has promised to take a robust approach to future negotiations on the maintenance of, and opt-out from, the Directive.  

Right to request time off for training

On 11 August 2010, the government launched a 12-week consultation on the future of the right to request time to. On 11 November 2010, Business Minister Mark Prisk, made a statement to the House of Commons that the right would not be extended to employees of businesses with less than 50 employees. However, on 17 November, Mr Prisk said that his earlier statement was “premature” and that the policy was “still under active consideration until final decisions can be made”.

All employers should therefore assume that the “right to request” procedure will apply to them from 6 April 2011, pending any further announcements. It already applies to those with 250 employees or more.

Employment of children

In March 2010, the Department for Children, Schools and Families published a review of child performance regulation, which recommended a number of legislative changes. In September 2010, Children’s minister, Tim Loughton, confirmed a full review of the law in this area would take place this autumn, as well as the “antiquated” legislation relating to child employment.

Agency worker regulations 2010

The future of the regulations in their current form seemed uncertain when BIS announced in July 2010 that they were under review. However, on 19 October 2010 the government announced that it will not be amending the regulations before they come into force in October 2011.

Issues due before the courts

Summarised below are some of the important employment cases due before the courts and tribunals in forthcoming months.

Can the buyer of a pre-pack business in administration avoid the automatic transfer of employees?

Uncertainty surrounding this area has continued for more than a year. In October 2009, the Court of Appeal in Oakland v Wellswood (Yorkshire) Ltd [2009] EWCA Civ 1094 held that continuity of employment was preserved by section 218 ERA when an employee of a company in administration was employed by the buyer following a pre-pack. However, the question of whether, and in what circumstances, the buyer in a pre-pack administration can avoid the automatic transfer of employees by virtue of regulation 8(7) TUPE remains uncertain.

The issue was considered by the President of the EAT in Olds v Late Editions Ltd UKEAT/0321/09 (together with three other similar cases) in October 2010 but the judgment is still awaited. For a detailed consideration of the current practical implications for transfers of insolvent businesses.

Are volunteers protected from discrimination?

A voluntary worker’s appeal in the case of X v Mid Sussex Citizens Advice Bureau and another UKEAT/0220/08  was heard by the Court of Appeal on 19 October 2010. The worker was appealing the EAT’s decision that as his volunteer arrangement with the CAB was non-contractual, he could not pursue employment claims against the CAB under the Disability Discrimination Act 1995.

Team moves

On 13 or 14 December 2010 the Court of Appeal was due to hear the appeal against the High Court decision in Tullett Prebon Plc and others v BGC Brokers LP and others [2010] EWHC 484 (QB); [2010] IRLR 648 that a group of brokers who resigned from Tullett Prebon with a view to joining a rival firm, BGC, had not been constructively dismissed. It will be interesting to see whether the Court of Appeal comments on the view expressed by the High Court that employees can rely on an employer’s fundamental breach of contract to justify their leaving employment, whether or not they resigned in response to that breach.

Right to representation at disciplinary hearings

In April 2011 the Supreme Court is due to consider the Court of Appeal’s ruling in R (on the application of G) v X School and others [2010] IRLR 222 that a teaching assistant was entitled to legal representation during disciplinary proceedings for sexual misconduct with a child, as Article 6 of the European Convention on Human Rights (right to a fair trial) was engaged which, given the seriousness of the charge and its likely effect in ending his career, included the right to legal representation.

Key recent developments

Employment status

On 5 October 2010 the Court of Appeal heard the individual’s appeal in Tilson v Alstom Transport [2010] EWCA Civ 1308 against an EAT finding that he was self-employed rather than an employee. The Court of Appeal upheld the EAT’s decision that Mr Tilson was not an employee, following the established legal principle that a contract of employment should only be implied where this is necessary to give business reality to the relationship and this is not necessary on the facts of the case.

Age discrimination: cost justification

In Woodcock v Cumbria Primary Care Trust UKEAT/0489/09 the EAT considered whether an employer could justify dismissing an employee early to avoid the cost of paying him an enhanced pension. Since Cross and others v British Airways plc UKEAT/0572/04/TM  it has generally been accepted that cost alone cannot be a legitimate aim to justify discrimination, but can be put into the balance with other factors.

In Woodcock the EAT decided that the Trust’s discrimination on the grounds of age was justifiable, because preventing Mr Woodcock from receiving the “windfall” of an enhanced pension was more than merely a costs-based legitimate aim. Interestingly, the EAT further commented, on an obiter basis, that it doubted the rule in Cross v British Airways that cost alone can never amount to objective justification in a discrimination case. It made obiter comments that it should be possible to justify a discriminatory state of affairs if the cost of rectifying it is disproportionate in comparison to the discriminatory effect.

This case contrasts with the EAT decision last year in London Borough of Tower Hamlets v Wooster [2009] IRLR 980 that a council had directly discriminated against an employee on grounds of his age when he was dismissed to avoid him remaining in employment until he reached 50, when he would have become entitled to enhanced early retirement terms.

Equality Act 2010

The majority of the Act’s provisions came into force on 1 October 2010. On 17 November 2010 the government confirmed that it would not now bring into force section 1 which would have introduced a socio-economic duty for certain public bodies.

The final draft versions of the EHRC employment and equal pay codes were laid before Parliament on 12 October 2010 and should shortly be brought into effect by Order. The EHRC has also published a suite of guidance documents for employers, workers, service providers, service users and education providers.

Disability discrimination aspects

The Equality Act (Disability) Regulations 2010 (SI 2010/2128), which replicate and consolidate the numerous regulations that previously supported the Disability Discrimination Act 1995, came into force on 1 October 2010. The only changes of note to employment practitioners are the new categories of persons with a visual impairment deemed to have a disability under the draft regulations.

National minimum wage: 1 October increases

From 1 October 2010 the new hourly rates are:

• Standard (adult) rate (workers aged over 21): £5.93 (rising from £5.80).
• Development rate (workers aged between 18 and 20): £4.92 (rising from £4.83).
• Young workers rate (workers aged under 18 but above the compulsory school age who are not apprentices): £3.64 (rising from £3.57).
• The Government has extended the adult standard rate to 21-year-olds from October 2010 (the qualifying date up until that date is 22). There will be a new minimum wage for apprentices of £2.50 per hour for apprentices under 19 years of age or those aged 19 and over but in the first year of their apprenticeship. All other apprentices already receive the national minimum wage (NMW) depending on their age.

Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2010

These regulations amend the Conduct of Employment Agencies and Employment Businesses Regulations 2003 and came into force on 1 October 2010. Points to note are that the regulations:

• Re-structure the existing regulations on obtaining work-seekers’ consent to terms before providing services.
• Modify the suitability checks that employment businesses and employment agencies must carry out on work-seekers.
• Provide that advertisements for jobs no longer have to state whether the advertiser is an employment agency or an employment business, but will now need to state whether the position advertised is permanent or temporary.
• Introduce a 30-day cooling-off period applicable to performers (such as actors, dancers, singers and models) during which the work-seeker will have a right to cancel or withdraw from the contract with immediate effect.

New procedure to enforce COT3 settlements

From 1 October 2010 a new streamlined process to allow enforcement of un-honoured settlements contained in Acas COT3 forms has been introduced. Employees are now able to instruct a High Court Enforcement Officer to issue proceedings for a Writ of Fieri Facias on their behalf, and to undertake enforcement of the writ in a similar way to the current procedure for enforcing a tribunal judgment. A new court form, N471A, has been introduced for this purpose

Imelda Reddington

Further to our earlier post, we provide our thoughts  on the Home Secretary’s announcement.

The Home Secretary’s announcement has impacted the flexibility of the immigration system particularly for employers who are not registered sponsors.  International businesses who transfer employees will be pleased that the Intra Company Transfer route has been excluded from the cap but will introduce tougher requirements.

Without full guidance from the UKBA, it is too early to assess to the impact these changes will have on UK businesses. 

We anticipate the permanent cap to work in a similar way to the interim cap.  However the permanent cap may not carry over applications to the following month.  We saw an increase in volumes in applications during the interim cap which meant that each month’s limit was consumed by the previous month’s applications.  For example, the November limit was reached on the 10^th of the month. 

From April 2011, applicants will only be awarded a Certificate of Sponsorship if they achieve the top percentage of points scored, measured against other applicants applying during that month.  This may cause the points required for a visa to fluctuate in any month depending upon the number of applicants and the average points scored.  This will lead to uncertainty for sponsors who have already conducted recruitment processes or provided job offers to potential employees.

Some further comment on the measures to come into force:

Tier 1

The Tier 1 general category has effectively being removed and will be replaced by an ‘exceptional talent’ route.  The remaining tier 1 categories of investor and entrepreneur will not be restricted.  In fact it is likely to be made more attractive to encourage the brightest and best to come to the UK.  It has been reported  that one third of the migrants who hold Tier 1 visas are in unskilled jobs or even unemployed. 

Despite these reports, we have found Tier 1 as a valuable alternative when companies want to employ highly skilled migrant workers without the need to obtain a sponsor licence.  We do expect a transition of those migrants currently on the HMSP or Tier 1 route and will publish the details once available.

Tier 2

An annual limit of 20,700 has been set under Tier 2 (General).  The Intra Company Transfer (“ICT”) category is not included in the limit.  This is good news for international companies and for the 22,000 migrants currently in the UK under the ICT route.

Whilst the ICT route may not be affected by the limit, the standards will rise for longer term employees.  Raising the minimum salary to £40,000 for those coming under the ICT route for more than 12 months is hoped to reduce the numbers applying in this category.

In addition, all roles offered to migrant workers under the Tier 2 general category will have to be at graduate level.  The UKBA provide a graduate occupations list for Tier 2 ICT applicants which will probably be extended to the Tier 2 general category.

Sponsorship

A more sophisticated model for operating the Tier 2 limit will be introduced in the sponsorship management system. This will require sponsors to request their allocation of certificates on a monthly basis.  We anticipate a more stringent approach to new requests from sponsors. 

In the MAC report, there were recommendations that the cap would not apply to Tier 2 extensions as sponsors were worried about saving enough certificates to renew existing employees.  The announcement from the Home Secretary did not cover this point, but we anticipate that the extensions will be excluded from the cap in line with the guidance published on 1 November 2010 for exceptional allocation of certificates.

Students

Tier 4 migrants make up almost two thirds of the migrants currently in the UK.  The government will have to drastically reduce these numbers if they are to achieve their net migration target.  The Home Secretary announced that a consultation paper will be published next month setting proposals for the operation of a new international student programme.  Her recommendation is to allow only degree students access to the student visa.  This would impact 40% of the students currently studying in the UK.

The Guardian reported that academics and students warned that closing down student visas for those on “below-degree” courses which is about 40% of the annual total, would devastate the finances of higher education and ultimately mean that British students would “have to pay even more for a university degree”.

We will report further changes as they are announced.

Theresa May has just delivered her speech to MPs on the immigration cap.

The number of non EU migrants allowed to come to work in the UK under the Tier 1 and Tier 2 routes will go down from 28,000 to 21,700.  A drop of around a quarter.

• Tier 2 limit is set at 20,700.
• Tier 1 limit is set at 1,000 dropping from 13,000, however the investor and entrepreneur categories are not affected.
• Tier 2 Intra Company Transfers are exempt from this limit.  However, workers staying for more than 12 months must earn over £40,000 for the exemption.

 More news will follow..

The Government’s proposed immigration cap has come in for further criticism, this time from the Home Affairs Select Committee.  For background to the proposal, see our previous posts here, here and here.

The basis for the Select Committee’s criticism is that the cap will only impact around 20% of migrants to the UK.  This clearly leaves the Government some way short of their stated aim of “reducing annual immigration from the hundreds of thousands to the tens of thousands”.   The Committee points out that in order to reduce immigration to the extent the Government needs in order to meet its aim, there would need to be significant reduction in EU immigration, family and dependency visas, and students.  The former of these is currently prohibited by the UK’s membership of the EU, while the latter two would have significant negative effects for the UK economy (and in the case of student visas, the finances of the already under-pressure University sector).  As the Committee concludes, the cap “will have little significant impact on overall immigration levels.”

The Home Affairs Select Committee report can be read in full here.

There was speculation over the weekend and this morning that the Government is considering relaxing employment law.  This piece from City AM summarises the main points.  The weekend speculation appeared to emanate from unnamed sources from within Downing Street.

This morning, the Government announced the appointment of Lord Young to report on possible measures that could help small businesses.  Interviewed this morning on Radio 4′s Today programme, Lord Young stated that one of the areas he would be looking at was the law of unfair dismissal, and increasing the qualifying period  to 2 years’ service.  The qualifying period – currently at 1 year – is the period that an employee has to have worked for the employer before being entitled to bring a claim.

Employment Tribunal claims are increasing year on year and represent a significant risk to even the best run businesses. Were it to be introduced, an extension of the qualifying period may reduce the number of Claims, and it is not therefore surprising that the Government is looking at this measure.

Two words of warning however:

Firstly, the highest value claims are often relating to discrimination.  There is no qualifying period for discrimination, and therefore these are unlikely to be affected by tinkering with the unfair dismissal qualifications.

Secondly, the basic award of damages for unfair dismissal is calculated based on length of service (weekly wage X years of service, subject to a multiplier based on age).  The claims which the mooted restriction are likely to prevent – i.e. those brought by employees of between one year and two years’ service – are therefore relatively low value claims.  Given their low value, such claims are agruably less likely to be brought, and more likely to be settled quickly and cleanly by the parties.  As such, the restriction of such claims is unlikely to have a significant effect on the number of claims being brought, and by extension, unlikely to have a significant effect on small businesses.

Judging by the headlines over the past few days, however, such a move is still likely to be reported favourably, and therefore there is probably a good chance it will happen.  In politics there can be a long gap between briefings by unnamed Number 10 sources and the passing of legislation, so it may be some time before the issue is finally determined.  We will keep an eye out for developments.  Watch this space.

As the internet continues to evolve, the issue of privacy and personal information is becoming increasingly important.  The vast number of websites and applications which require users’ to provide personal information, and the legislation and regulations which cover this, have meant the law in this area has developed quickly in recent years, arguably at the expense of complete clarity.  

Privacy is an issue for both the leviathans of the internet and also for those organisations for whom their website is a means to an end, rather than the product itself.  On the larger end of the scale, witness Facebook’s Terms of Service criticisms, and Apple’s new offering Ping.  These might be seen as the two alternative extremes of the approaches to privacy. 

Facebook users tell Facebook Inc who is in their email address book and even their physical location, as well as licensing to the company all intellectual property rights in the material uploaded to the site.  All of this makes for an easier user experience, albeit one which attracts criticism from privacy campaigners.  In response to this criticism, Facebook made a number of amendments to their policies during 2008-9 of the site.  Broadly, these involved moving towards more of an “opt-in” than “opt-out” default, meaning that users need to make an active choice to share their data rather than being assumed to have consented to sharing merely by choosing to sign up to Facebook.

Apple’s Ping, on the other hand, currently has no function for automatically “reading” a user’s contacts book and therefore suggesting friends who may already using the service.  New subscribers therefore need to manually enter the email addresses of friends who may be users of the service.  This time-consuming process arguably detracts from the user experience – and may even present an obstacle to take-up of the service – but is likely to meet with more approval from campaigners. 

But with both offerings, there is extensive – to put it mildly – contractual protection for the companies against its users.  Facebook’s terms and conditions (defined as “Rights and Responsibilities”) is a fairly detailed and thorough document, but is nothing compared to the 17 A4 pages (55 if viewed on an iPhone) of terms in the standard iTunes Terms of Service (my personal favourite is the clause preventing use of the service for the manufacture of nuclear weapons).

While businesses don’t need to take the belt-and-braces Apple approach to Terms of Service, they do need to have something in place, whatever the purpose of their website. Even if a website does not obviously collect personal data, most websites collect statistics on its visitors using cookies and identifying IP addresses.  What should go into a website terms of use and privacy policy is the subject of this post.