An important decision for auditors was issued by the House of Lords in the last week of July 2009: Moore Stephens (a firm) v Stone Rolls Limited (in liquidation).

In summary, the Judgment ruled that an auditor should not be held negligently liable for failing to detect and report on a fraud perpetrated by the sole owner and controller of a company.

This maintains the narrow view of the extent of an auditor’s duties as set out in the seminal Caparo Judgment when the Court held that an auditor’s duties were generally owed only to the shareholders and not the creditors.

(more…)

UK unemployment rose by a record 281,000 to 2.38 million in the three months to May, the Office for National Statistics has said.

The jobless rate increased to 7.6%, the highest in more than 10 years with the number of people claiming unemployment benefit increased by 23,800 in June to 1.56 million, which was less than analysts had forecast.

Unemployment among young people has been especially acute, as firms cut jobs to reduce costs in the downturn.

Young people have been particularly hard hit with unemployment leaping to a 16-year high of 726,000.

The number of those out of work for more than a year rose by 46,000 to 528,000, the highest for 11 years.

TUC general secretary Brendan Barber said: “It’s particularly worrying that over half a million unemployed people have been out of work for at least a year, including 133,000 young unemployed people.”

“With a new generation of school and college leavers soon starting to look for work, our unemployment crisis will get even bigger.”

Separately on Wednesday a BBC survey suggested two-thirds of people across the UK know someone who has lost a job in the recession.

A further four in 10 fear losing their job in the current climate, the survey of 1,048 people by ComRes indicates.

Even though economic conditions may be stabilising, economists expect unemployment to continue rising this year, as financial uncertainty persists.

Vicky Redwood of Capital Economics said the latest figures contained “conflicting signals about whether conditions in the labour market are getting better or worse”.

The increase in the unemployment total of 281,000 in the three months to May was the biggest quarterly rise since records of the ILO measure began in 1971.

However, the rise in the claimant count in June was less than expected, and May’s increase in the claimant count was revised down to 30,800 from the original estimate of 39,000.

“The claimant count measure of unemployment in June posted its smallest rise in a year. However, the wider ILO measure posted its biggest rise on record,” said Ms Redwood.

But, she said, unemployment was unlikely to fall until economic growth returned to its trend rate, and this would take a long time.

Of the different figures released, it is the internationally recognised ILO figure of 2.38 million that is the government’s preferred measure for unemployment, because it is a more comprehensive indicator of the job market.

The Chartered Institute of Personnel and Development has called for an enquiry into this “conundrum” of the differing figures.

Average UK earnings including bonuses increased at their highest rate since December, up 2.3% in the three months to May from a year ago.

However, excluding bonuses average earnings rose at 2.6% - the lowest rate since records started in 2001.

David Kern, chief economist at the British Chambers of Commerce described the figures as “grim reading”.

“On the basis of these numbers, we reaffirm our forecast that unemployment will peak at around 3.2 million next year.”

Not only is unemployment rising, figures show that the number of jobs available has also fallen.

The number of vacancies dropped to a record low of 429,000 in the three months to June, down by 35,000 from the previous quarter.

The number of unemployed men increased by almost 200,000 to 1.46 million, and 84,000 more women were out of work, putting female unemployment at 923,000.

Urgent action is needed to address unemployment, explained Rachel Reeves, parliamentary candidate for West Leeds and a co-author of a report published on Wednesday by the Institute for Public Policy Research.

“If we are to get Britain back to work, there will have to be large increases in the jobs available in hi-tech manufacturing and private service sectors such as the creative industries”.

BBC Website

A prison officer claims she was hounded out of her job by repeated criticism for being ‘too sexy’ and ‘glammed up’.

Amitjo Kajla, 22, is demanding compensation from Justice Secretary Jack Straw.

The 5ft officer told an employment tribunal how colleagues complained that she wore too much make-up and that her clothing was more revealing than the standard-issue uniform, which had to be adapted to her tiny size-four frame.

One young inmate told her: ‘Miss, you look sexy’, prompting colleagues to warn the officer that her glamorous appearance left her at risk of being dragged into a cell.

Another inmate was overheard telling Miss Kajla: ‘I wouldn’t mind taking you back to a cell’, the tribunal heard.

Miss Kajla claimed she was called a ’stupid little girl’ by a senior colleague for putting her security at risk by sitting with prisoners during their ‘free association’ period.

She added that she was mocked by staff at Brinsford Young Offenders’ Institution, in Featherstone, Staffordshire, for carrying a handbag and reprimanded for waving and saying ‘hello’ to inmates.

The remarks, often made in front of inmates and other staff, made her feel harassed and humiliated, she told the tribunal. ‘I couldn’t sleep at night because of the bullying and harassment. I lost weight and decided I couldn’t take it any longer and resigned.’

Miss Kajla, from Wolverhampton, is claiming compensation for constructive unfair dismissal.

The respondents are listed as the ‘Secretary of State for Justice and others’, understood to include prison officer Lee Hastings.

She claims she was effectively sacked by the prison service in April last year, ten months after moving to Brinsford after a trouble-free spell at Shrewsbury Prison.

The Birmingham tribunal has already heard that shortly after she started at Brinsford, one of the governors reprimanded her for wearing heavy make-up, bangles and a nose stud.

Despite writing in her diary: ‘Make-up is me, I don’t want to change me’, she bought lighter shades of lipstick and other make-up to comply with the rules.

Adam Farrer, for the prison service, suggested that going to work ‘glammed up’ was not appropriate and that she was seen by inmates as a ’soft touch’.

But Miss Kajla replied that she had been taught to take pride in her appearance.

Responding to criticism of her informality with inmates, she said: ‘I was always friendly but never a friend.’

The tribunal heard how Miss Kajla would often sit with groups of prisoners on her own.

Giving evidence, Mr Hastings told the tribunal panel this showed a ‘lack of personal safety’.

He denied a claim by Stephen Roberts, representing Miss Kajla, that he had ‘bullied and intimidated’ Miss Kajla because she was ‘pretty and small’.

The prison officer said he had simply been concerned that ‘repeated actions were breaching security issues within the prison service’.

He added: ‘the young offenders are without doubt the most spontaneous, volatile and violent ones.’

Mr Straw is not expected to be called to give evidence at the tribunal, which continues.

Andy Dolan, Daily Mail

Two women who lost their jobs at East Lothian law firm Garden Stirling Burnet as a result of the credit crunch have been awarded a total of more than £20,000 compensation by an Edinburgh employment tribunal.

The tribunal ruled they had been unfairly dismissed, but rejected the age discrimination claims by Linda Bruce, 56, and Anne Crawford, 52, against the Haddington solicitors’ practice.

The firm suffered a downturn in business between April and May last year, when housing sales fell from 42 to 15 in a month.

August was also a disaster and the firm decided to reduce staff costs by £14,000 a month.

Mrs Crawford, a mortgage adviser, and Mrs Bruce, a paralegal assistant, were among those selected for redundancy.

Both women claimed there was an ageist culture in the firm.

However, the tribunal heard the average age of employees pre-redundancies was 42.83, while after redundancies it was 43.40 years.

The tribunal rejected the age discrimination claims, but ruled they had been unfairly dismissed.

In Mrs Crawford’s case, there was no consultation regarding alternative employment opportunities.

But her compensation was reduced by 90 per cent to reflect the chance the outcome would have been the same had there been proper consultation.

The tribunal ruled the firm had not acted fairly in Mrs Bruce’s selection for redundancy.

The process lacked any objectivity or transparency in its application, it added.

Mrs Bruce, of Tranent, East Lothian, who earned £324 a week, was awarded £19,688 and Mrs Crawford of Haddington, who earned £328 a week, was given £1782.

www.scottishlegalnews.co.uk 16th July, 2009

A law student with a prosthetic arm has taken her former employer, clothing retailer Abercrombie & Fitch, to an employment tribunal after she was allegedly forced to work in the stockroom.

Riam Dean, 22, who was born with her left forearm missing, said she was given permission to wear a cardigan to cover the join in her arm.

But she claims she was later removed from the shop floor and made to work in the stockroom because the cardigan did not adhere to the strict dress code.

Miss Dean told the tribunal she felt “taunted” when her manager told her she could return to the shop floor of the firm’s flagship store on London’s Savile Row if she removed the cardigan.

She said: “I felt personally diminished, humiliated and could not argue a point I could never win.”

Miss Dean, who has just finished her final exams at Queen Mary, University of London, is seeking damages for disability discrimination at an employment tribunal in central London.

She told the hearing she would have stayed with the company until her law qualification was complete, had she not been “bullied” out of her job.

A spokeswoman for Abercrombie & Fitch said Miss Dean’s portrayal of what occurred was “inaccurate”.

She added: “Abercrombie & Fitch has a strong anti-discrimination and anti-harassment policy and is committed to providing a supportive and dignified environment for all its employees”.

At the moment, people may only bring separate discrimination claims relating to one protected characteristic; such as their age, disability, gender reassignment, race, religion or belief, sex or sexual orientation.

However, the Government is now proposing to introduce a new law to protect people who experience discrimination because of a combination of two characteristics, such as black, and minority ethnic women, or religious men.

This is because it feels that some employers have particular stereotyped attitudes towards black women, for example, as opposed to black men or white women.

The new “dual discrimination” clause which the Government wants to insert in the Equality Bill would allow people to make a claim if they were directly discriminated against because of a combination of two relevant protected characteristics.

Vera Baird, Solicitor General and Equality Bill Lead Minister, said: “People’s identities are multi-faceted and complex, and we are delighted to bring forward an amendment to the Equality Bill which would reflect this. This clause would provide protection for people who at present would have to guess on what basis they have been discriminated against, wholly outside their dignity.”

Business will benefit if all the issues in one case can be dealt with together, she explained, and there will be better access to justice for all.

Croner News, 22 July, 2009