IF Forum: Stadden Forbes
Our thanks to Ben Nightingale and Stadden Forbes Wealth Management, for hosting the meeting on 9 January 2020 at their offices in Grosvenor Gardens. The flamboyant French Renaissance architecture, standing at the gateway to Belgravia, once again provided a perfect forum for engaging presentations and a lively discussion.
Andrew Chamberlain, is the Deputy Director of Policy and External Affairs at the Association of Independent Professionals and the Self-Employed (IPSE). The self-employed represent 15% of those in work and the association’s dedicated Policy, Press and Research teams lobby government departments to ensure that its members have a voice in government policy.
Andrew chose to highlight a significant issue for the currently self-employed in the gig economy.
In 2016, two cab drivers, members of the Independent Workers Union of Great Britain (IWGB) Union, brought a case to an Employment Tribunal claiming “worker’s” rights against Uber. The Tribunal found in favour of the drivers and Uber appealed and lost again ultimately taking the case to the Court of Appeal which in December 2018 upheld the 2016 Tribunal decision ruling that Uber drivers were not self-employed but workers.
As a consequence Uber drivers should qualify for basic rights such as minimum wage, paid rest breaks, holiday and sick pay. Implementation of the ruling would significantly impact on Uber’s cost base and fundamentally undermine its business model, and it continues to argue that it is simply a technology company which provides a ride hailing app and acts as an intermediary to provide booking and payment services. Any employment contract, it says, is between the driver and the passenger, not with Uber.
The Court of Appeal’s decision, it says does not reflect that “...... almost all taxi and private hire drivers have been self-employed for decades - long before the Uber app existed…….". It is true that many black cab drivers do use the ride hailing apps like Gett, Taxi app and others. The Appeal Court ruling was not unanimous however, and Uber has been granted leave to further appeal to the Supreme Court. In the meantime it continues to operate.
So what are its chances of having the decision overruled? What distinguishes employees from workers, and workers from the self-employed?
Some rudimentary web surfing suggests that an employee is an individual employed under a contract of employment. A worker who is not an employee works under a contract whereby the individual "undertakes to do or perform personally any work or services for another party to the contract whose status is not … that of a client or customer". In general, an employee, must meet three principle tests:
· personal service: the individual must be required to provide their services personally, rather than being able to send a substitute to carry out the work in their place;
· mutuality of obligation: the employer must be obliged to provide the individual with work and the individual must be obliged to do that work in return for an agreed salary or wage, and on terms and conditions laid down by the employer; and
· control: the employer must exercise a sufficient degree of control over the manner in which the individual carries out the work, consistent with an employer/employee relationship.
Workers may meet some of the tests but where none of the three tests is met, the individual is likely to be a self-employed independent contractor.
The ruling of the Supreme Court will have significant implications not only for Uber but for many currently self-employed in the gig economy.
Louise Coward is Head of Insight at Transport Focus, (TF), a watchdog for transport passengers and road users with offices in London and Manchester. It is an executive non-departmental public body, sponsored by the Department for Transport at an annual net cost of around £6m.
Tf’s heritage dates back to the 1947 Transport Act which set up the Central Transport Consultative Committee (CTCC) plus a network of regional Transport Users’ Consultative Committees. These were abolished by The Railways Act 1993 and replaced with the Rail Users’ Consultative Committee (RUCC), later renamed Rail Passenger's Council in 2000, Passenger Focus in 2006 as it gained responsibility for bus, coach and tram passengers, and Transport Focus in 2015 when it became responsible for road users as well.
Its mission is to use evidence-based research to influence decisions that make a difference to passengers and road users, and to this end it has, for the past 20 years, carried out a biannual rail passenger survey. Headline figures available on its website, show that overall satisfaction with rail journeys has, surprisingly, increased over the period - but from a paltry 76% to an underwhelming 83%. Louise highlighted that passenger’s main issues are:
Timetabling
Delays
Overcrowding
Value for money
No surprise there then, but this revelation raised several questions. Aren’t these (along with safety, naturally) priorities for every rail transport service? How do other countries succeed where the UK doesn’t? Why should rail fares increase year on year when delays rise also?
Tf has tried to address the issue of punctuality through its Delay Repay campaign, which encourages passengers to exercise their rights to refunds for delays. It has also worked with the Government and Rail Delivery Group (RDG) to set up the Rail Ombudsman which now provides a free, independent route to resolving disputes between passengers and train operators.
Rail passengers are not the only focus for TF and it has recently tried to understand whey younger people are reluctant, even frightened, to use busses. Outside London, passengers have to engage with the bus driver to buy a ticket, exact change is a requirement to avoid overpayment and proof of age is demanded. For young people used to purchasing items on line, this is a turn off.
Tf also surveys motorists about their driving experiences on the roads and feeds back the data to Highways England and the DfT. It's Motorway Services Users Survey, now in its second year, has been valuable in driving change. Some services significantly improved their satisfaction score - Stafford South, for example, increased satisfaction from 70 per cent in the first year to 99 per cent in the second (perhaps they offered free petrol to those surveyed ?!).
Jamie Bentley is the CEO of the Stephenson Group and the fifth generation of the family to lead the business.
He wove a story of transformation of Thos. Bentley & Son, formed in Bradford in 1856, and for three generations a manufacturer of soap based agents for the processing of wool and textiles, into today’s Stephenson Group, which manufactures soaps and bases for personal care products at its state of the art facility in Horsforth, Leeds.
And the thread running through its success? Innovate and change to survive.
In the mid-1960s his father, Richard, joined the family business and realising that it was going backwards sold to the Stephenson Brothers, a bigger family business in Bradford. He retained ownership of the factory in Leeds and a seat on the board. There were 40 family shareholders but only two who worked in the business and most were in their seventies and interested only in dividends. Over the next decade, the Bentley family bought out the majority of those shareholdings but the company still needed new markets to survive. The core process remained unchanged. Saponification, the reaction of a fat and an alkali to form soap! The challenge was simply what to do with it and how to sell it. Richard set about looking for growth opportunities, which were similar to washing wool, and used the same chemistry.
The solution - a process that would mash newspaper, float the ink to the surface then recycle the paper, and by the mid-1970's, Stephenson Brothers had become the dominant provider of flotation technology to the paper recycling industry.
A further business, which used soap as a lubricant in the tyre manufacturing process, was soon launched. The company flourished as its markets expanded to textiles, paper and rubber.
Jamie worked shifts in the factory, while at school and after leaving (and working as a ski guide, running an hotel etc.) he took a role at Ellis & Everard (which was subsequently acquired by global chemical distribution company Univar). Here he flourished and was eventually offered a position as Sales Director.
But by this time the family business was struggling again. Consolidation of private paper mills under large organisations had resulted in concentrated purchasing power for its customers. What his father had done before had to be done again: Innovate and change to survive. Jamie recognised that now was the time to take up the challenge, declined the Univar role and joined the family business.
He became Sales Director for a product line that didn’t yet exist: Personal care products. The company had all the skills to wash fibres, rubber and everything else, why couldn’t it manufacture the products that wash people and hair?
He worked tirelessly to develop products, win customers and gain confidence and within two years the personal care business was generating £4m of revenues; in three years it was the biggest part of the business. It was selling to Avon, customers in New York, Hong Kong, and LA, and had an office in Paris selling to all the big fashion houses there. As growth in personal care continued, Jamie decided to dispose of the paper and rubber businesses and with 90% of its sales overseas, Stephenson Group twice became the winner of the Queens Award for Export.
Jamie shared anecdotes showing that products alone are not the basis for success; talented, committed and innovative people are the bedrock. For example
...... the employees who loaded product into their own cars and caravans and "took holidays" in Germany to ensure continuity of supply to customers there, when the docks at Hull were on strike.
...... the innovator who realised that the answer to pouring liquid soap into moulds without creating a foam, that needed to be manually pared off, was not one of chemistry. It was to put the spout at the bottom of the pourer - not the top!
.... the MBA undergraduates who, as part of a consultancy project at Manchester Business School, advised him on how to develop a product which extends the fizziness of carbonated soft drinks, while protecting the IP. He trusted their advice, hired four of them, and last year they were running one of his business lines with £2m of revenues and a 95% gross margin.
..... the men hired straight from prison, in whom he has invested his faith and support, to assist their transition to life on the outside. One has become a Supervisor and is now enrolled on an apprenticeship.
Stephenson Group now develops and supplies products for personal care brands and manufacturers worldwide. Revenues for y/e Sept 2018 touched c. £25m with an operating profit of c. £1.4m