Understand Your Rights. Solve Your Legal Problems
API President and CEO Jack Gerard testified before the Senate Commerce, Science and Transportation Committee last week on the need for smart, science-based oil and natural gas regulations so that American consumers and workers and the environment can continue to benefit from America's energy renaissance.
"America is now leading the world in oil and natural gas development and refining, a reality that was unimaginable just a decade ago," said Gerard. "We've transitioned from an era of energy scarcity and dependence to one of energy abundance and security. The developments of the past decade have brought cost savings for American consumers, good paying jobs, renewed opportunities for US manufacturing, a stronger economy and greater national security.
"Technological innovations and industry leadership have propelled the oil and gas industry forward despite the unprecedented onslaught of 145 new and pending federal regulatory actions targeting our industry. The time has come to review these regulations and to have a frank discussion about the costs and the benefits to the American people.
"The oil and natural gas industry remains committed to regulatory structures that promote safety, environmental protection, and responsible operations and it continues to look for ways to collaborate with regulators. Since 1924, API has been the leader in developing industry standards that promote safety and reliability through the use of proven engineering practices under an ANSI-accredited process. Nearly 400 API standards are cited throughout federal and state regulations.
"Federal regulatory policy can either strengthen or weaken the US energy renaissance, with impacts that extend far beyond our industry. Regulatory actions should be rooted in sound science and data, with a consideration of the costs and benefits. With these goals in mind, we stand ready to work with Congress and the administration to find reasonable solutions to the challenges before us."
(Source: American Petroleum Institute)
The largest UK fines for health and safety incidents have increased substantially in the past year, with some of the biggest brands in business having to pay millions of pounds for failing to control serious risks to employees and the public.
There were 19 fines of £1 million or more in 2016 – the largest being £5 million. This compares with three fines of £1 million or more in 2015 and none in 2014.
The rise in fines is a result of the introduction of new sentencing guidelines for health and safety offences, which came into force on 1 February 2016.
It is hoped that the possibility of larger penalties will make employers take greater care to ensure people are not harmed by their activities, according to the Institution of Occupational Safety and Health (IOSH). This, IOSH says, can in turn help businesses become more successful.
Shelley Frost, Executive Director of Policy at IOSH, said: “Health and safety offences can ruin lives, devastate families and inhibit precious talent.
“Whilst you cannot put a value on human life, the level of fines now being handed out recognises society’s disapproval of serious corporate failures that lead to injury, illness and death. It reflects a desire to deter others from making the same errors and takes significant steps forward in aligning penalties for these offences with other regulatory breaches in the UK.
“Protecting employees and others affected by a business’s operations will not only eliminate the risk of a large financial penalty but can also be key to ensuring and maintaining an organisation’s strong reputation and ultimately contributing to its success.”
For the first anniversary of this change in legal guidance for the courts, IOSH, in association with Osborne Clarke LLP's specialist health and safety legal team, has today revealed the results of a Freedom of Information Act (FOIA) request exploring the impact of the new sentencing guidelines.
This shows that the largest 20 fines imposed for health and safety offences last year cost the businesses involved a total of £38.6 million. In comparison, the largest 20 fines in 2015 and 2014 cost £13.5 million and £4.3 million respectively.
Not every fine in 2016’s largest 20 involved a fatality, with the guidelines deeming that it is enough for a company’s health and safety failings to have caused injury, or put people at substantial risk of injury or death, to warrant a large financial penalty.
For example, the largest fine was the £5 million that Merlin Entertainments was ordered to pay after five people were seriously hurt in a rollercoaster crash at its Alton Towers theme park. Following the sentencing, the organisation said its focus on safety is “sharper and more engrained than ever”.
The broken leg and dislocated ankle suffered by actor Harrison Ford while filming Star Wars: the Force Awakens resulted in a £1.6 million fine for Foodles Production. The HSE said it could have resulted in more serious injury or even death. Foodles stated: “The safety of our cast and crew was always a top priority and we deeply regret this unfortunate on-set accident. The Court acknowledged both the additional safety protocols that were immediately implemented, and that it was a very safe production in all other respects.”
Most fines imposed by courts in 2016 related to health and safety offences which took place before the guidelines were introduced.
Mary Lawrence, a partner at law firm Osborne Clarke LLP specialising in health and safety, and an IOSH Council member, said: “The increase in fines being issued by the courts demonstrates a desire to drive the message home that ensuring health and safety within a working environment is fundamental. So while fines regularly exceeded the million pound mark last year, we can expect to see even larger fines going forward.
“I see many businesses who focus on the safety and health of employees and others experiencing a broad range of benefits, including being better placed to attract and retain talent, scoring points in procurement processes for valuable contracts or even when seeking external investment.”
Before the introduction of the guidelines, there was little assistance for courts sentencing health and safety offences.
The 2016 guidelines, a 40-plus page document, provide a step-by-step guide for sentencing both companies and individuals for health and safety, and food, offences. This includes taking into account the turnover of the organisation, the level of culpability and the likelihood that the failing could lead to harm and how bad the harm could be.
(Source: Osborne Clarke LLP)
A collection of well over 100 businesses and trade associations that represent millions of American jobs recently announced a new coalition to stop the Border Adjustment Tax or BAT. Americans for Affordable Products (AAP) will run a national campaign to engage consumers and show lawmakers that pursuing tax policy that will result in higher costs for their customers on everyday items including food, gas and clothing is the wrong approach.
The BAT is a component of the US House Republican tax reform proposal, and will significantly hurt American consumers and the nation's largest employers by increasing the cost of everyday products by up to 20%.
"As a business owner who works every day to add value to my customers and serve the needs of families, I am deeply concerned about the Border Adjustment Tax. Without question, it will increase prices paid by consumers and threaten the existence of companies like ours. We need Members of Congress to listen to the urgent objections of small business job creators and stop this giveaway to big corporations at the expense of middle income and working class families," said Learning Resources, Inc. Chairman Rick Woldenberg.
Consumer Technology Association (CTA) President and CEO Gary Shapiro commented, "While well intended, a proposed Border Adjustment Tax could increase prices on a wide range of basic consumer goods, hitting the pocketbooks of middle class Americans. We urge policymakers to incentivize US manufacturing in ways that don't hurt the hundreds of thousands of American businesses who employ millions of American workers."
"The retail industry pays among the highest effective tax rates of all industries. We, therefore, enthusiastically support reforming the current tax code and welcome the fact that both the President and Congress do so as well. However, the Border Adjustment Tax is harmful, untested, and would put American retail jobs at risk and force consumers to pay as much as 20% more for family essentials. We are committed to working with Congress to ensure they understand the impact of this proposal, and to pursue tax reform that reduces rates and benefits American consumers," stated Retail Industry Leaders Association (RILA) President Sandy Kennedy.
National Retail Federation (NRF) President and CEO Matthew Shay concluded, "Whether it's the automobile you drive, the gasoline you use, the groceries you put on the table, or the shoes and the clothes you put on your feet and back, the prices of all of those things will get driven up by the Border Adjustment Tax. Consumers ultimately are the losers from any effort to tax imports because the economy in the United States is driven by consumers. There are plenty of taxes already on hard working Americans and the retailers that serve them, and higher prices just add to that burden. We support creating a less complicated, more straightforward and equitable tax code, and will work with both the Administration and Congress to achieve that goal, but the Border Adjustment Tax is not the answer. Some may consider this a better way forward, but it is definitely not the best way."
American consumers oppose a policy that exempts exports from being taxed while taxing imports because of the real-life impact it will have on their everyday lives and household budgets. For example, according to the NRF, upon passage, the BAT will cost American families as much as $1,700.
While members of AAP oppose the BAT, they recognize the hard work by Members of Congress to reform the tax code and support provisions such as lowering the overall corporate tax rate and the territorial tax approach, which limits taxes on US companies to income earned only in the United States.
(Source: Americans for Affordable Products)
Bloomberg Law and the American Intellectual Property Law Association (AIPLA) recently announced the findings of a nationwide survey of patent attorneys and agents that gauged their feedback regarding proceedings before the Patent Trial and Appeal Board (PTAB). The survey suggests that initial complaints about the rate of invalidity decisions issued by the PTAB have largely subsided as the findings indicate that attorneys representing patent owners are growing accustomed to and finding value in trials at the tribunal, which were initially criticized for the rate of invalidity decisions issued.
"We're pleased to partner with AIPLA to obtain and share insights of leading patent attorneys into this important matter," said Alex Butler, Vice President and General Manager, Bloomberg Law.
"Timely perspectives on the implications of patent law from patent-holders, challengers and law firm practitioners is one example why Bloomberg Law customers rely on us. Our intellectual property news and editorial teams' unique and deep coverage of domestic and international news, legal decisions, regulatory developments, and supporting practice tools and data simply cannot be found on traditional platforms."
"One of AIPLA's core missions is to reach out to our members to understand their insight on important issues," said AIPLA President Mark Whitaker. "We've pursued this outreach with this member survey, through a partnership with Bloomberg BNA, which tells us that the initial concerns over PTAB proceedings may no longer be applicable. This is vital information that all PTAB practitioners should care about. We're excited to share these survey results, and we're equally excited to have partnered with Bloomberg Law on this research."
The survey was conducted online in late 2016 and was completed by over 160 patent attorneys and agents.
(Source: Bloomberg Law; AIPLA)
With the advent of technologies, speedy progress in law making and an increased thirst for innovation in all aspects of life, the 21st century is thriving with change, but businesses, consumers, lawyers, and all sorts of individuals, must be equally speedy at catching up. This week Lawyer Monthly reached out to Mark O’Halloran, Partner at Coffin Mew, who gives an exclusive overview of how contracts, agreements and the arrangements we make in our day to day life and work are adapting to the intricacy and flexibility of today.
The basic premise of a legal agreement was unchanged for generations before the 20th Century. The parties would discuss in more or less detail what each was going to do or pay and when, and then proceed. If anything went wrong, they had the option of applying to court for a remedy. Freedom of contract was primarily the order of the day, except where the court thought the agreed contract went against broad concepts of morality and public policy.
As the economy evolved, and the difference in bargaining positions became wider and more entrenched, legislation was passed to regulate the scope of what companies could agree with each other to encourage fair competition, and what they could agree with consumers to ensure citizens weren’t given a raw deal. International and industry associations also began publishing recommended forms of contract in areas such as construction, logistics and travel which have helped simplify and standardise the way agreements are made in those sectors.
Those changes were primarily about the content of the contracts. But technology and the gig economy have now started to have profound effects not just on how contracts operate, but on what the parties think they actually mean.
The New Feudalism
Most small businesses which win work from a major enterprise customer will eventually come up against the dreaded Framework Agreement, also known as a Basic Purchase Agreement or Master Services Agreement or suchlike. On their face, they are meant to establish the basic rules of engagement and allow the parties to sign off individual Work Orders for specific projects. But one telling aspect to these Framework Agreements is their tendency to back up every single one of the supplier’s obligations with wide-ranging indemnities plus obligations to make reimbursements of monies received. That comes in addition to the usual warranties which can themselves give rise to liability for damages.
A small supplier will find the agreement a nightmare to negotiate and that their customer refuses to make any but the most cursory amendments. It would seem enough to put a small supplier off even thinking about taking on the work; until they appreciate the underlying reason why the enterprise customer wants such a comprehensive set of protections even where the supplier could not realistically ever fund a full claim against them under the agreement.
The largest customers understand the advantage of using agile and disruptive suppliers to address new challenges, but they are also mindful of their own reputational management. In the event that problems arise, they want to ensure the supplier is well-motivated to do all it can to work with them to resolve the problem, and to do so on the customer’s terms. What they don’t want to see is the supplier seeking to avoid providing that support based on any technical contract arguments.
In a roundabout kind of way, the intention is to take the relationship outside of contract law and give the customer the power to reward the supplier for doing its best without being obliged to do so. The relationship effectively becomes one of feudal lord and vassal. A backward step in some ways but one which fairly reflects the reality of most suppliers providing services to multinationals.
The New Anarchism
Many new services and products, particularly in the digital sector, are being developed by SMEs and start-ups partnering with each other in a mix of long term and ad hoc arrangements. The watch words are expertise, collaboration, mutuality and good faith and, behind these, an emphatic belief that the parties should resolve all issues between them. Agile philosophy has been a key driver by breaking down each project into manageable sprints, thereby avoiding any underlying problems accruing without being addressed.
What is evident is a general distrust of reducing the understanding and obligations of the parties into words, particularly ‘legalistic’ contracts. Instead, people have started to prefer rather general statements of principles and avoid tying anything down with what they perceive as misleading “precision”. This lack of old-school contractual detail, whilst the diametric opposite of the New Feudalism, has the same objective: to side step the need for formal legal proceedings to regulate the relationship. The difference is that, rather than giving the final say to one party, the onus is on all parties to agree the resolution and it is only the parties’ determination to take that approach that ever allows it to succeed.
Code is Contract
An alternative approach to the New Anarchism, which distrusts the excessive granularity of traditional legal drafting, is the belief that any form of contract can in fact be encoded into a computer program. Many lawyers baulk at the idea that their contracts are essentially algorithms that need only have data inputted to output a clear answer, citing the presence of qualitative criteria (such as an obligation to use “reasonable endeavours” to do something) in many agreements. Judgment calls, a lawyer might say, cannot be digitised.
Code is Contract proponents consider such arguments a poor excuse for sloppy thinking and have developed so-called ‘smart contracts’ which make use of the distributed ledger technology behind Bitcoin to automatically determine not only when there’s an obligation to pay, but also effect the payment, in an increasing number of financial transactions. Work is also being done on using the same technology to turn traditional conveyancing on its head.
Whilst smart contracts currently have limited relevance to how most agreements are formulated, there are two revolutions taking place which may really see contracts taken out of the hands of lawyers and placed firmly onto the hard drives of computers.
The Internet of Things, or Big Cooker is Watching You
The idea behind the Internet of Things (IoT) is that every single appliance, machine, vehicle and even building can have its own in-built micro-processor and sensors to be able to do two things: monitor its own usage and environment, and communicate that data through the cloud.
We’ve seen the early stages: home heating systems controlled from your phone; cars which monitor your driving and report back to your insurers; bracelets which upload your physical activities and prompt you to do more. Many people also work in buildings where their ID card tracks their presence throughout the day. Now imagine that every worker, in every location (whether outside, in the office or in the factory) could be monitored, and every machine (whether computer keyboard, vehicle or item of manufacturing equipment) was able to report on how effectively it was being used. If you could process that data, you could automatically determine if a contract was being performed as required.
It would be too much for a human overseer, of course, but real-time meaningful assessments of that much data are increasingly possible using Artificial Intelligence. Google’s Deep Mind is now the world’s best player of Go, IBM’s Watson is the Jeopardy champion of champions, both relying on their ability to quickly assess vast amounts of data and each deploying a level of qualitative assessment once thought the preserve of the human mind. Developments in neural networks and quantum computing are also reaching the stage where their human inventors cannot even now say how their computers are coming to the right decisions.
Computer as Lawyer (and Judge and Jury)
The staggering possibility is that we may not be so far away from a time when parties will tell a computer what they are planning to do, and the computer will not only spell out the ground rules they need to follow, but track them and ensure they do follow those ground rules, arbitrate any disputes between them and automatically settle payments and penalties depending on performance.
In other words, in an Internet of Things where Code is Contract combines with Artificial Intelligence, the idea of using human lawyers to wrangle for weeks over an excessively complicated agreement will seem as dated as paying a clerk by the word to fill out a parchment with beautiful but unreadable calligraphy to record a simple sale of sheep from one farmer to another.
The New Feudalism will be satisfied by early notice that things aren’t panning out as expected. The New Anarchists will take comfort from the reduced capacity for anyone to cheat. And the legal profession? Well, as Shakespeare (nearly) said, “First thing we’ll do, let’s compile all the lawyers.”
According to IDC, most decision makers will have digital transformation at the center of their corporate strategy by the end of 2017. Yet, two thirds of digital transformation projects fail. One of the reasons behind this failure is due to the existing organisational culture and structure. Here Lawyer monthly benefits from an exclusive anaylsis by Matt Jenkins, Head of Consulting at Footdown, who give us the rundown on how and why a plan for digital transformation can mean the difference between living the journey and reaching a destination, for any business.
In recent years, digital transformation has been one of the main discussion topics within corporate circles.
New technologies have enabled business leaders to transform business models, engage clients and employees in a meaningful way and make operations more efficient.
According to studies, organisations that invest in their digital capabilities report revenues six times higher than less digitally mature companies. Furthermore, employees at digitally advanced companies showed a 50% higher index of well-being at work.
However, despite the business benefits and commercial potential, organisations are still struggling with digital transformation.
Over 80% of digital projects fail and that failure comes at a steep price. Research shows that large organisations invest over £258 billion a year in unsuccessful digital transformation projects.
The legal industry for example, has been primed to take advantage of digitisation for some time but many firms have struggled to deliver long-term benefits.
Why?
One of the main reasons behind this staggering failure rate is the assumption that digital transformation means making staff more tech-savvy and implementing new tools.
In reality, digital transformation means embedding digital tools at the heart of every aspect of an organisation so all parties benefit – clients, stakeholders and employees. Therefore, digital transformation spans many disciplines within an organisation. It remodels daily practices, improves workplace structures, strengthens reporting relationships, enhances information sharing, drives client engagement and increases market competitiveness.
Working Together to Improve
At its core, being a leading digital organisation means embracing a new culture and mindset.
Understandably, changing so many business processes and technologies means people must be willing to change and given the support they need. Employees should be shown the value of the process and why they should champion the transformation.
This places additional responsibility on managers. Senior leaders need to anticipate changes in skills, adapt organisational processes and create a strong sense of purpose so all employees keep pace. A successful digital transformation plan has a coherent vision, articulated in a way that rallies employees around the envisioned change.
However, organisational culture doesn’t change by decree. Managers need to keep a close eye on how changes are transpiring. This lets them identify potential blockages. It ensures that new values, behaviours and norms are adjusted in such a way that both technology and people shift in unison towards planned goals and emergent opportunities.
How?
A firm’s strategic vision is only as good as the people behind it. If you don’t focus on behaviour, culture and decision-making, the digital transformation process cannot deliver the desired business outcomes.
Defining and implementing a cross-departmental collaboration framework is key to ensuring digitisation is effective, both in terms of bottom line and client value. This can be challenging for international corporations that have branches spread all over the world, but success is possible with a measured approach.
Rather than jumping headfirst into digital transformation, take time to understand the drivers of digital transformation and where you should focus your time and attention. This means proactivity. Truly understand what the current context of your organisation is and listen to your employees’ voices.
Thanks to technology, business leaders can now use a variety of digital tools to connect with employees at an unprecedented scale and to quickly assess capabilities, resources and dysfunctions in a matter of minutes.
A Clear Pathway
Bear in mind though, ambiguity is the enemy of execution, so if you want successful digital transformation you need access to razor sharp intelligence, both in respect to a team’s capacity and their readiness to digitally transform, and the critical pathways to reach your goals.
Once you are in tune with your organisation’s day-to-day needs, you need to know how to leverage the right digital strategy for your company.
Here are a few steps you should take into consideration when planning to take your organisation to the next level and lead it through a successful digital transformation process:
Science Meets Art
Now that you have a clear strategy laid out, you need to win the hearts and minds of your employees. Get them invested and engaged in a shared vision regarding the company’s digital future.
Demonstrate clearly how they can increase the quality of their work with digital tools. Show how client relationships are improved with modern communications solutions. Build a better team spirit with applications that bring teams together.
Ultimately, to make the new digital ways of working stick and increase your team’s productivity and performance, you’ll need to navigate the change process together with the employees. Develop a new set of leadership skills that encourages staff to experiment with digital solutions and allows them to adapt the new tools to their work practices.
Food for Thought
Digital transformation is a journey, not a destination - a dynamic, constantly evolving process that needs regular evaluation and updating to ensure it keeps pace with market trends and the wider economic context.
Today’s business landscape is changing constantly, therefore building a culture that can cope with constant change and evolution is crucial for successful digital transformation.
Many business leaders believe that great technology leads to great organisations and great services. However, the high rate of failed projects and mediocre results have proved that organisational culture is critical to the success of digital transformation and is not just a feel-good factor or afterthought.
There is no proven recipe for successful digital transformation, but remember that employees are the main drivers and champions of this process. They are vital in helping you to refine your strategy and leverage the full potential of your staff.
As US/Mexico relations deteriorated during US President Donald Trump's first weeks in office, a powerful Texas attorney is taking a Mexican cause célèbre to the highest court in the United States.
Bob Hilliard stands with Mexico
"Innocent Mexican citizens have been killed and their families have had no recourse through the court system to seek justice," said Bob Hilliard, Founding Partner at Hilliard Muñoz Gonzales, LLP in Corpus Christi, Texas. Hilliard has taken up the cause of Sergio Adrian Hernandez Guereca, a 15-year-old Mexican citizen killed by US Border Patrol Agent, Jesus Mesa, who shot the teen at point-blank range as the unarmed boy stood yards away in Mexico.
"The agent shot him twice," an eyewitness said. "He thought about it for about five seconds, because he shot at him once, left him astonished, then shot him again."
A boy's tragic death
"One round struck subject under left eye, subject expired on scene." This is how a US Border Patrol report described the June 2010 shooting. Hilliard filed suit on behalf of Sergio's family to ensure that the boy's tragic death would bring about significant reforms in the conduct of border agents. On February 21st, Mr. Hilliard takes the case to the Supreme Court of the United States to present oral argument that the protections of the Constitution's Fourth Amendment apply.
Hilliard speaks for the voiceless
Mr. Hilliard goes before the highest court in the land to speak for the voiceless Mexican citizens victimized by excessive force at the hands of US government agents. Border agents have shot across the border and killed at least eight Mexicans since 2006, according to government records. So far, all attempts to hold these agents accountable for their actions have failed, because the victims were Mexican citizens standing on Mexican soil.
The killing zone
Mr. Hilliard said, "The border is a symbol. It is more than the physical end of one country and the beginning of another. It is a reminder of an indisputable and permanent connection of cultures and peoples, of shared lives and daily interactions."
He continued, "Our border line was never meant to be a bright line, marking the end of the rule of law and civil protections, giving those who should know better permission to shuck their training and responsibility and open fire on neighbors."
Seeking protection for Mexican citizens
A previous decision by the US Fifth Circuit Court of Appeals dismissed efforts to bring those responsible for Sergio's death to justice, suggesting that the teenager was not protected by the US Constitution, because he "was on Mexican soil at the time he was shot."
"Our Constitution is strong enough to protect the most vulnerable and innocent of our southern neighbors," said Mr. Hilliard. "The Fourth Amendment prohibits unjustified use of deadly force."
The High Court will decide if Sergio's family can sue the US Border Patrol and whether the US Constitution protects noncitizens like Sergio, who are the victims of a US agency's excessive force.
Hilliard: "this case is about right and wrong..."
Mr. Hilliard said, "To watch this increasing epidemic of unjustified shootings and not acknowledge our own responsibility to ensure justice for the victims lowers us to the basest level of inhumanity."
Mr. Hilliard continued, "The court should be the conscience of the people. It must acknowledge that human worth is not determined by place of birth and justice is not determined by where that life ends -- especially a young life cut short when a US law enforcement agent, standing inside the US and governed by this country's constitutional constraints, pulls the trigger."
Mr. Hilliard asked, "Was Sergio less worthy of protection simply because he was a poor Mexican national? Regardless of where each of us stands on the immigration debate or the building of a border wall, this case is about right and wrong, life and death. About a young life taken too soon by the actions of a US Border Patrol agent."
(Source: Hilliard Munoz Gonzales LLP)
The Teamsters Union strongly denounces an anti-worker bill recently passed by the Missouri legislature and signed by Gov. Eric Greitens making Missouri a right-to-work-for-less state.
The destructive right-to-work law is designed to drive down wages and weaken workers' bargaining rights. States that have already mandated right to work have lower wages, higher unemployment and poverty levels, and fewer protections for workers than free bargaining states.
Teamsters and their allies representing workers throughout Missouri fought for several years against right to work as it was repeatedly introduced in the legislature. Their vocal opposition to the passage of right to work resulted in former Gov. Jay Nixon vetoing the legislation in 2015. The recent Republican legislative majority and governorship ensured its final passage.
"Teamsters and the people of Missouri rallied by the thousands to fight against this legislation because they know how dangerous it is. 'Right to work' is a fictitious play on words aimed to confuse the public. It will hurt rather than help working people," said Jim Hoffa, Teamsters General President.
"Rather than working to strengthen the middle class and create jobs, Missouri lawmakers are choosing to wage an attack on the working people of this state," said Jim Kabell, President of the Missouri-Kansas-Nebraska Conference of Teamsters and Joint Council 56 in Kansas City, Mo.
Kabell called the law 'government hijacked by corporate interests' and a measure that will enrich elites, not the working people of the state.
"The people of Missouri will not be defeated. This law will only serve to further mobilize workers in the fight for what is just and right," Hoffa said.
(Source: International Brotherhood of Teamsters)
Last week media outlets were ripe with the news that the UK government wants to implement an increase in the number of apprenticeships offered in England to three million by 2020. The aim is to boost employment and training opportunities available to younger generations.
The Apprenticeship Levy, effective from April 6th 2017, requires businesses with a paybill of over £3 million pa to fork out 0.5% on apprenticeships for young people. Research by XpertHR already reveals that 39.2% of employers plan to either increase apprentice recruitment or begin taking on apprentices for the first time.
Below Lawyer Monthly has heard from several experts and specialists in this arena, and put together a round-up of their thoughts on the levy, the impact the believe it will have, and the downsides involved for the businesses it prompts.
Suzanne Horne, Partner and Employment lawyer, Paul Hastings:
There is little doubt that the Levy is unpopular with some employers, particularly when you consider that group companies each with a pay bill of £3m and above will be required to pay it, with only one of them entitled to the £15,000 allowance. Many businesses will still have a lot of work to do before 6 April to ensure that they are ready to fulfil the requirements of the Levy and to better understand how they can make the Levy work for their organisation.
However, this is only one aspect of the apprenticeship reforms. Around 1,200 employers have stepped up to be ‘trailblazers’, working to create new apprenticeship standards across 29 sectors, thereby challenging pre-conceived ideas of the current limited use of apprenticeships in the workplace. This is not about ‘devaluing a brand’, more a brand-refresh for the 20th century workplace.
Catharine Geddes, Employment Partner and Head of HR, Lester Aldridge:
Employers who pay into the levy scheme should be given access to the Digital Apprentice Service in February 2017 and they can then better plan how the new apprenticeship scheme will work for them. Employers who don’t need to pay the levy should also consider where apprenticeships can best fit within their businesses as the government has confirmed it will contribute at least 90% towards the cost of apprenticeship training, with other grants and funding arrangements being available for small employers.
Adam Harper, Director of Strategy and Professional Standards, AAT:
The apprenticeship levy is seen as a key means of delivering the government commitment to reach three million apprenticeship starts by 2020. It will also help to address decades of chronic underinvestment in skills.
However, we do believe that if the levy’s main goal is to increase the number of apprenticeship starts, then it doesn’t go far enough. AAT has long since backed the commitment shown by the Government towards apprenticeship starts, but we emphasise the need for this to be supported by a focus on timely completions and overall quality. There is little point having a target for the number of people starting an apprenticeship if many fail to finish (overall almost 30% do fail to complete their apprenticeship). Likewise, what is the point in undertaking an apprenticeship if the apprenticeship completed either holds little real value in the eyes of employers or provides too little by way of transferable skills and knowledge for the individual? Unfortunately, in a small but still significant, number of instances, this remains the case.
It is our belief that the Apprenticeship Levy should be renamed as the Skills Levy, and that it should be possible for levy monies to be spent on high quality traineeships and other forms of training that will benefit individuals, employers and the economy as a whole. Last month we surveyed MPs across all parties on this issue, and found that 65% support our suggestion that the levy should be developed to allow funding for skills other than apprenticeships.
Increasing the flexibility of the levy would foster improved productivity across the whole workforce, deliver greater value for money and yet have no significant revenue implications for the taxpayer. It might also help encourage more small and medium-sized businesses (SMEs) to take on apprentices. Given that 99% of businesses in the UK are classed as SMEs, this provides a significant pool from which to drive up apprenticeship numbers.
Grace Mehanna, Campaign Director for Youth Employment, Business in the Community:
While the levy will allow businesses across all sectors an unprecedented opportunity to take a more active role in shaping the skills of the next generation, its success will come down to how it is implemented by businesses. Responsible business practices need to shape this process which means companies creating apprenticeships that are high quality, inclusive, accessible and offer progression within an industry. Achieving this takes thought from employers, but could pay dividends in helping them to avoid the short term unintended and damaging consequences that could arise from such a rapid expansion.
Ultimately, the Apprenticeship Levy creates a fantastic opportunity for the legal sector to create new entry level routes into the profession, beyond just graduate schemes. Degree apprenticeships offer a vocational pathway for young people to train as a solicitor, while other lower level apprenticeships can be used to train young people for paralegal positions and roles in finance, office management, IT, administrative support and facilities. Apprenticeships offer new ways into the sector for young people from different backgrounds and could be key to helping the sector to recruit a more diverse future workforce.
But developing these pathways is just half the battle. It’s also key for businesses to make sure that these routes are accessible and visible to young people from all backgrounds. This means thinking about how you recruit. From unnecessary work experience requirements to unclear application processes and job descriptions, young people currently face significant barriers in recruitment. Research we conducted with the City & Guilds Group, surveying 4,000 young people, shows that a third had a negative experience of recruitment, with 1 in 5 being put off a company as a result.
Apprenticeships open up opportunities but poor recruitment practices can close them down. From exploring new selection methods such as behaviour based recruitment to simplifying application processes and job descriptions, there’s are lots of practical small changes firms can make to increase accessibility. To build a strong and diverse talent pipeline, we would urge companies across the legal sector to make this a central part of their recruitment strategy for apprenticeships.
Marianne Hatcher, Learning and Development Manager, BPS World:
At BPS World we have to find and attract the brightest talent for ourselves and for our clients. The competition has never been greater and, with Brexit threatening to cut off our supply of skilled people from Europe, the skills crisis will only get worse. Apprenticeships are an intelligent way to solve the issue. In my view, apprentices should now form a vital part of every organisation’s workforce. The introduction of the Apprenticeship Levy in April 2017, which ends taxpayer funding for apprenticeships and instead levies a charge of 0.5% of an employer’s wage bill, means that employers who don’t embrace apprenticeships will find themselves paying for them anyway. Ignoring apprenticeships has never made sense, now it is a costly mistake.
At BPS World we see apprenticeships as an investment tool and an economic imperative. We believe that they boost social mobility and increase productivity within businesses.
The qualifications gained during an apprenticeship can now go right up to degree and even masters level. Apprentices don’t expect the salaries of inexperienced graduates and the government will pay you £1,000 for each 16-18-year-old you employ. There are a few key things to remember:
Employer branding is very important when promoting your apprenticeship programme and companies need to have effective mentoring programmes in place to support apprentices. Apprentice attraction campaigns are resource heavy so you need to be resilient and focus on what your business objectives are and how apprenticeship programmes can help you achieve them. Apprentices also need to have a clearly defined career path offering development opportunities continuously – they will keep asking ‘what’s next?’
The recruitment industry was one of the last to offer apprenticeship programmes and BPS was the first in the sector to take part. We’re very proud of our apprentice, Bradley Carton who joined us in 2015 and in 2016 was awarded REC Recruitment Apprentice Winner of the Year. It is great to see our investment in him and the other BPS Apprentices being recognised at a national level. I hope that the levy will force even the most reluctant employers to at last see the immense value apprentices add to a business.
Kirsti Laird, Senior Associate in the Employment team, Charles Russell Speechlys:
Some concern has been raised as to whether employers’ desire to make use of the apprenticeship funds available from the government will lead to a down-grading of quality for apprenticeships. In the short term this concern is likely to be justified. Apprenticeships will be offered by employers unfamiliar with apprenticeship schemes and in sectors and job skills which traditionally have not been open to apprentices. Similarly, those institutions responsible for monitoring the quality of apprenticeships are likely to be overwhelmed by the needs of these newbies.
However, it seems logical to assume that these issues will resolve themselves reasonably quickly. Even if employers have capitalised on the “free money” offering, and even if they have limited interest in the quality of training being provided, these employers will still have to deal on a daily basis with the apprentices in their premises.
Employers will not want apprentices with no skills and no ability to meaningfully add to the value of the business. Employers will not want to pay apprentices to be doing nothing. Furthermore, employers know that having poor performing and poorly trained employees causes significant harm to the business. It takes considerable management time to fix mistakes and monitor performance. It therefore seems likely that employers will go to the effort of formalising an apprenticeship programme, and finesse it over time, if only to save themselves time and effort in the longer term.
Apprentices will want to be learning, working and will want to see a career path and job opportunities ahead of them. It seems very unlikely that any apprentice who feels that they are being “used” and not getting value out of their apprenticeship will be quiet about it, even if they do not have the financial freedom to simply leave. Whether or not the apprenticeships are taken up by young or old, we can expect that issues will be made public, whether through social media or an official complaints process.
Many employers already resent the management and human resources time spent in managing poor performers and other disgruntled workers. Put simply, for a variety of reasons, some workers actually cost a business more than the value their work product adds. No employer wants to keep those workers in their business. Many employers therefore go to considerable efforts to provide training and improve engagement of their workers. It therefore makes sense that they would do the same for their apprentices.
David Way CBE, Visiting Professor, University of Winchester, and former CEO, National Apprenticeship Service:
When plans for an apprenticeship levy were announced, they took most employers by surprise. This new policy had barely been trailed and employers have been scrambling ever since to prepare themselves for April 2017. Attempts to delay the start were resisted by a Government with no realistic alternative funding options and lofty manifesto ambitions for apprenticeship numbers by 2020. The legal profession is relatively well placed for the change because it has embraced apprenticeships progressively over recent years. The more the profession provides opportunities for both entry and progression through apprenticeships, the better it should fare under the levy. Most employers have undertaken a journey that first ensures they understand the levy and are set up to use the systems that underpin it – some of which are still in the final stages of testing.
There are though a surprising number of employers seemingly still to appreciate this imminent change is for real. Employers then typically establish how they can get their money back. Will they need to adapt training practices to make them eligible to reclaim levy payments? Should they write this off as a tax? It will be interesting to see how many take the latter view. If so, the policy will have been a failure except as a tax-raising initiative. The hope and expectation of the new levy is that more employers will be motivated to invest more in training and ensure that the apprenticeship route works well for them and for future recruits. The new levy incentivises businesses to re-examine their recruitment and training practices; and improve the quantity and quality of training that is undertaken. At a recent HR Summit, there was a great deal of interest in new standards for apprenticeship training. This stemmed from the desire to ensure that if employers could only get their levy funds back through apprenticeships, they had better be fit for purpose.
While the Government has been restrictive in only funding apprenticeships rather than other types of training, it has pinned its colours to a programme that gives great returns on investment to both employers and apprentices. So, Government is backing an approach that works well here and in most of our economic competitors. Government has been especially helpful in making apprenticeships at all levels eligible for funding. This has further incentivised Higher Education to introduce more Higher and Degree Apprenticeships with standards linked to professional body requirements. The policy therefore suits professions that have high skill expectations and accessible routes for people to achieve them. Taxation or benefit? Employers will decide but sectors and professions that readily embrace apprenticeships and adopt high quality standards and access routes to the top will benefit most.
David Way is also the editor of ‘A Race to the Top – Achieving Three Million More Apprenticeships by 2020’ which you can buy here.
We would also love to hear Your Thoughts on this, so feel free to comment below and tell us what you think!
Rolls-Royce has paid £671m to settle a five-year-long investigation conducted by the Serious Fraud Office (SFO). Despite this success for the SFO, it has suffered a number of failings; some involving cases where there was insufficient evidence to prosecute.
Despite the recent coup involving agreeing a £671M settlement with Rolls-Royce it is unclear as to whether the SFO’s past blunders will continue to haunt the anti-fraud agency.
With a history of high-profile failures and years of opposition from Prime Minister Theresa May, the SFO has only recently started to pick itself up, reporting modest growth and 12 new criminal investigations taking place (according to the SFO’s annual report for 2016). They now face an uphill battle to restore credibility and erase its somewhat chequered past following this pivotal moment in their history.
In response to the Rolls-Royce decision, serious fraud defence specialists, Rahman Ravelli, has published an in-depth guide on SFO processes, and how defence teams can put their best foot forward. Aziz Rahman, Senior Partner at Rahman Ravelli gives his advice: “Ultimately, if expert legal help is sought the very moment you know an SFO investigation has commenced then you stand every chance of challenging the agency.
“You can also use the law of disclosure to gain access to unused material – this is material gathered by the SFO which does not support its case and, in turn, undermines its validity.
“The Rolls-Royce case is a fine example of the SFO’s tenacity – their unique methods and tireless Intelligence Team worked on the case for five years until a settlement was concluded.”
However, Mr. Rahman said that mounting a real challenge to the SFO is more than possible: “This said, there have been holes in the SFO’s investigative processes, indicating more than a couple of ways in which a shrewd, expert criminal defence team can win a case.”
If you are accused of wrongdoing by the SFO, it pays dividends to ensure that you are fully informed as to the agency’s procedures, how they mount an investigation and the measures you should take.
Rahman Ravelli has published an insightful, in-depth guide explaining how the Serious Fraud Office collects evidence and begins an investigation.
(Source: Rahman Ravelli)
