Investigations

Our employment laws - the weakest in Europe - aren't weak enough for some

2012-05-24T08:57:24Z

Tory fatcat Adrian Beecroft's businesses stand to make even more money if his plans to slash employment red tape become law.

Britain already has the weakest workplace protections in Europe but that's not enough for the private equity multi-millionaire.

A paper he has produced for Prime Minister David Cameron's office suggests it should become law that bosses should be able to sack staff at will.

The Beecroft Report also proposes that it should be made easier to sack large groups of workers and cap payouts from employment tribunals.

A Mirror investigation today reveals current laws could not stop a consortium led by Beecroft's private equity firm Apax partners from axing 8,000 jobs and slashing wages after buying the Somerfield chain in 2005.

The supermarket was sold three years later, netting a £465million profit for investors. Somerfield faced scores of employment tribunals after the takeover.

Last night, the general secretary of shopworkers union Usdaw, John Hannett, claimed the company had launched a "wholesale attack on workers" under Beecroft's consortium and slammed his new plans.

He added: "Usdaw very much welcomed the Co-op Group's takeover of the chain from Apax in 2008."

Beecroft, 65, is worth about £100million and lives in a £6.5million house in Hampstead, North London.

He was educated at Oxford and has donated £573,000 to the Conservative Party, enough to be allowed to have dinner with the Prime Minister. He loves to race his vintage Aston Martin DBR1, worth around £4million, at events like the Goodwood Revival.

Beecroft retired from Apax in 2008 but remains listed at Companies House as a partner of the firm.

He went on to launch venture capital firm Dawn Capital, which has investments including payday loan firm Wonga.

The company, which gives short-term loans to struggling families at eye-watering interest rates of up to 4,200% APR, has grown to a value of £384million in just five years.

Mr Cameron's policy guru Steve Hilton asked Beecroft to write a report on the UK's employment law last year.

The result was so controversial that it was shelved for six months and eight pages of the most radical plans were removed - including ditching parental flexible working and even a proposal to allow small firms to hire children.

Business secretary Vince Cable said parts of the report were "bonkers" and deputy Prime Minister Nick Clegg said they would create "industrial scale insecurity amongst millions of workers".

But Beecroft has defended the plan and claimed Government insiders told him "David Cameron wanted to do the whole thing".

He said dumping his report would cost the UK economy 5% in growth.

Undoubtedly, his proposals would make life easier for private equity firms like Apax.

They have been compared to vultures, buying up companies then cutting costs, sacking staff, slashing wages - all in order to sell for a fast buck.

Beecroft joined Apax in 1984 and according to his CV he assumed responsibility for the London office and approval of all investments.

Apax teamed up with Barclays Capital and R20, controversial property tycoon Robert Tchenguiz's investment firm, to buy Somerfield for £1.1billion after spotting "the kernel of a good business".

Apax focused on local convenience stores and within weeks the bulk of Somerfield's loss-making Kwik Save subsidiary was sold.

Somerfield then announced plans to cut pay for new starters to the minimum wage of £5.35 and to slash premium pay for working Sundays and bank holidays.

Under new contracts, which were rejected in a ballot by staff, sick pay entitlement was also cut.

But union sources say management forced through most of the changes, including more redundancies.

One worker said: "In our store about 15 jobs would be condensed into eight.

"All affected would face redundancy but could reapply for the new positions.

"But the workers affected are disinclined to reapply, as in most cases it looks like the same job for less money."

Of 109 employment tribunal cases against Somerfield between 2006 and 2009, 47 were settled through mediation service ACAS.

Another 11 were settled privately, 18 were withdrawn, 12 were struck out and seven were lodged too late and dismissed.

Of the 14 cases where the tribunal came to a judgement - eight were won by staff and six were won by Somerfield.

Linda Inhester was sacked from her job at a Somerfield store in Peckham, South London, for "gross misconduct" after she was accused of stealing £10 from a customer.

She took her case to an employment tribunal which found she had been unfairly dismissed.

Another worker at the supermarket had to go to an employment tribunal in 2007 to prove the firm had not paid her £688 in holiday pay and a third won £9,955 in compensation after she was unfairly dismissed following maternity leave.

By 2008, the number of "full time equivalent" employees at Somerfield had fallen from 31,665 to 23,741 and the average wage had slumped by £214 a year to £16,065.

It was sold to rival chain the Co-operative Group in 2008 for £1.6billion - a 42% return for Apax and its investors.

Somerfield's Apax-appointed chief executive Paul Mason and chairman John Lovering stood down in 2009, sharing £5.2million "compensation for loss of office". In all, the board was paid £13million that year.

Tchenguiz was arrested last year as part of a Serious Fraud Office investigation into the collapse of the Icelandic bank Kaupthing, which his firms owed £1.8billion.

He was later released without charge but he has been targeted for millions by Kaupthing's administrators.

According to the Organisation for Economic Co-operation and Development, the UK ranks second bottom out of 34 industrialised countries in their league table of employment protection, alongside Canada and above the US.

Mr Hannett added: "The report is a recipe for rampant job insecurity that would reduce consumer demand and worsen economic growth prospects.

"We need laws to protect us at work for the same reasons we have them elsewhere in life - to stop the bad, unscrupulous and ruthless who are willing to hurt, cheat and exploit others for their own personal or financial gain."

Beecroft was last night unavailable for comment but an Apax spokesman said: "Apax is proud of the fact that it successfully helped to revive Somerfield.

"The grocery market is cut-throat and Somerfield was struggling to compete with the big four.

"We helped improve its long term position by re-positioning it as a convenience store operator and in the process believe that we helped to protect many jobs."

Sam Cam charity attacks David Cameron welfare reforms

2012-05-23T22:03:10Z

It was a moving personal moment with the wife of the PM.

David Cameron's wife Samantha visited the charity Contact a Family and chatted to parents of disabled children, touching on her experience with her late son Ivan, who suffered from cerebral palsy and epilepsy and died in 2009, aged six.

In February this year, Mrs Cameron held a reception for Contact a Family at Downing Street.

Now, in a remarkable move for an organisation with such close ties to Number 10, the charity has launched a scathing attack on David Cameron's benefits reforms.

In a campaign backed by Britain's Got Talent judge Alesha Dixon, Contact a Family warns some parents of disabled children are finding it so hard to cope they are skipping meals and going without essentials, including heating.

And that's before the latest round of spending cuts in the Government's Welfare Reform Bill, which mean families with disabled children face being £27 a week worse off.

The chief executive of Contact a Family, Srabani Sen, said yesterday that the Government must do more do ease the "financial misery these families are dealing with every day".

She said: "Families with disabled children contribute a huge amount to the economy by working and caring, saving the NHS and social services billions each year. Our research shows that it's vital more is done to help those caring for a disabled child."

Alesha Dixon, whose younger brother has cerebral palsy, added: "It's shocking that so many families with a disabled child are going without food and heating - things all of us take for granted."

Single mother Moira Hookings of Rogerstone, Gwent, looks after her autistic son Leon, eight, and said budgeting is a struggle - even before further cuts.

The support worker (below) said: "I've axed my weekly shop and regularly go without meals to make sure Leon has enough.

"He gets upset when I don't eat but I just tell him not to worry as I'm not hungry. I've borrowed money from family to pay for food, gas and electric and I took out a credit card for Leon's school uniform and footwear, which I am paying off at £20 a month.

"I'm still paying for the presents from last Christmas. If the benefits are reduced, I don't see how I'll cope."

A survey by Contact a Family has found that 29% of families with disabled children have taken out loans - sometimes from payday lenders or loan sharks - for essentials such as groceries and 41% have fallen behind with rent, mortgages, council tax or utility bills.

In January, the House of Lords defeated Government plans to cut payments for families with disabled children.

But the Conservative-led Coalition ignored the vote in the Lords and reintroduced the cuts.

It has a chance to repair the damage when the details of the new universal credit are announced but, judging by past performance, we wouldn't hold out too much hope.

The bent advert company that survived for just 14 days

2012-05-23T22:02:00Z

This has to be a record - a dodgy firm has been shut by the courts just 14 days after it was formed.

First Star Recruitment was incorporated on January 11. It was in provisional liquidation within a fortnight and formally shut down in the public interest last week.

The Leamington Spa firm run by Sharon Watkins, 34, was one of a web of companies that ran a jobs advert scam, sending invoices to employers who had placed recruitment ads.

Three associated firms were also closed after an Insolvency Service investigation: Online Recruiter, Financial Times Accounts and Working Solutions Websites Direct.

Jamie Epplestone, 29, of Stockton, Warwickshire, was director of all three.

Two other firms run by Epplestone were put into compulsory liquidation last September.

Registrar Derrett in the High Court ruled that the latest firms to be shut down had carried on the "objectionable trading practices" of their predecessors.

The kgbdeals that didn't stack up

2012-05-23T22:01:00Z

Another record of some sort - one firm has had three separate complaints upheld against it by the Advertising Standards Authority in the same week.

When challenged, online discount site kgbdeals could not prove that a digital camera really was discounted by 65% or that a ladies' Rotary watch was discounted by 53%.

The third misleading promotion was for a £209 short break in Sardinia that didn't make plain the figure was per person and at least two people had to go.

All three plugs by the firm, which is the trading name of KGB (UK) Limited of Cardiff, were banned. The watchdog said: "We told kgbdeals to ensure it held robust evidence to support savings claims when advertising its offers."

Sorted: we bring Halfords "lifetime guarantee" back to life

2012-05-23T22:00:00Z

We can only admire David Bellis's organisational skills.

Buying a £53.99 replacement battery for his Ford Capri in 1993, he noticed it came with a "lifetime guarantee", so long as he kept the same car.

"Six years later, the battery started to fail and Halfords did replace it," said David, from the Wirral.

"That lasted several more years and when I contacted Halfords again they told me they had sold Halfords Garage Services to the AA and were no longer responsible for the guarantee.

"I contacted the AA and they told me they had sold on to Nationwide Autocentres."

Halfords bought Nationwide Autocentres in 2010 for £73m, bringing David's guarantee full circle.

But Halfords told him: "They are currently still operating independently from us and are responsible for their own customers services. We must advise that we consider this matter closed."

Derek said: "I feel I have been cheated out of a guarantee that they sold me."

But when we asked Halfords about the guarantee, a spokeswoman said: "Yes, with receipt we'll honour. Customer services are writing to the customer direct to clarify."

Beware the bogus Amazon "cancelled order" email

2012-05-23T22:00:00Z

Amazon customers are being targeted by a new phishing scam.

Fake emails claim to tell people about a cancelled order, but redirect them to clone sites where victims are asked to input personal financial details.

If you are in doubt, do not click on any links in the email. Instead, go to www.amazon.com and sign into your account as usual.

Bridford finance firm faces licence ban

2012-05-23T22:00:00Z

There's a comment under our story from July 2009 about a shady investment scheme that put customers at risk of losing savings worth £10million.

The scheme resulted in the Financial Services Authority banning and fining father and son team Neil and Timothy Marlow of the Bridford Group of Ilkley, West Yorks, for "their misleading promotions and mismanagement".

"Scammed a load of pensioners and now selling car finance," runs the comment, "I thought you needed a licence for that".

You do. And now the Office of Fair Trading has ruled that it is "minded to revoke" the consumer credit licence held by Timothy Marlow, his company DSG Prestige, and the licence held by Sarah Marlow trading as Bridford Financial Solutions.

The application by Bridford Limited Liability Partnership for a licence is listed as "minded to refuse". It seems the net's closing in.

Click here for advice on Olympic scams

2012-05-22T15:13:48Z

The UK European Consumer Centre has issued advice on consumer rights for anyone coming to see the Oympics. If you've been ripped-off by anything from a rogue ticket seller to an over-charging (or even non-existent) hotel, it's worth checking where you stand here. Better still, check before you part with any cash.

Jed Mayatt, manager of the Centre, said: "Many people have been looking forward to the London 2012 Olympic and Paralympic Games as one of the sporting highlights of their lives. If rogue traders start to flourish, we want to ensure that consumers - both in the UK and those visiting the UK from elsewhere in the European Union and beyond - understand their rights."

PPI - the worst-ever financial product

2012-05-22T08:52:52Z

It's official: Payment Protection Insurance has become the most hated financial product ever.

According to figures released today 157,716 formal disputes raised with the Financial Ombudsman Service were about the sale of PPI. That's 60% of the total number and the highest number of complaints ever received about a single financial product.

In total, the Ombudsman received more than 1.2 million enquiries and complaints from consumers in the past year, that's more than 5,000 each working day. One in five of these initial enquiries went on to become formal disputes - a record 264,375 new cases, up 28% on the previous year.

The ombudsman's involvement resulted in compensation for consumers in 64% of cases compared to 51% in the previous year.

Natalie Ceeney, chief ombudsman, said: "This year's been a struggle for many consumers, who've found themselves burdened by debt, besieged by claims companies and bewildered by the complexity of financial services. This has made our work at the ombudsman service more challenging - but more crucial - than ever before.

"I believe there's something we can all learn from what we've seen this year - to help prevent future problems and complaints. What's gone wrong in the past doesn't need to happen again - as long as we remember that "complaints" are about real people, not numbers, and that "complaints handling" is about customer service, not box ticking."

Child Survival Fund touts for donations after being struck-off

2012-05-16T22:05:00Z

A firm of solicitors called Russell-Cooke doesn't want us to run this story.

If concerns the Child Survival Fund, which says it's "an international charity whose mission is focused on saving the lives of children who are victims of the world's seven deadliest diseases".

Latest filed accounts show that it raised £357,000, with £145,000 - about 40% - spent on costs. The accounts that it should have filed last December are five months overdue.

The Fund became a registered charity in 2006 but it is now listed on the Charity Commission website as "removed - ceased to exist".

That happened in August last year, yet earlier this year we were alerted by a reader who got junk mail from the Fund which still stated "Registered Charity No. 1116070".

Yesterday, nine months after being removed from the register, its website still listed the charity number on the same page on which it asks "Will you help?".

The contacts page gives no phone number, email or postal address, but elsewhere on the website there was an address at Unit 10b Sovereign Park, Hemel Hempstead, Herts, HP2 7DA which is described as the "registered address".

There's no sign on the outside of this unit on an industrial estate that there's any connection with the Child Survival Fund - the fascia board carries the name Morris Cerullo World Evangelism.

The unit is the European headquarters of American preacher Morris Cerullo, who at a London rally in 2006 insisted that God wanted to make the faithful rich and: "God says that you must show your faith by sowing a £25 seed into this ministry tonight."

In the same building as Cerullo's European headquarters there's its subsidiary Total Contact Management Ltd, which is a "Call Centre and Fulfilment House for over 30 Christian Charities", including the Child Survival Fund.

Cerullo wasn't in the office when we visited Total Contact but co-director Julian Richards and company secretary Stephen Ashton were there. They pointed out, and we are happy to make it plain, that Total Contact does not run the Child Survival Fund, that's done by independent trustees - who are not listed on the Child Survival Fund website and have not been listed with the Charity Commission since it was struck-off (for the record, the trustees are Bruce L'Engle Barnes and Tzong Ting Wu, both residnet in the United States). Richards and Ashton explained that their role was to help "embryonic charities" and this includes the Child Survival Fund.

Ashton (left) and Richards

So, why was it struck off the register of charities?

Richards replied, to our amazement: "It still is a registered charity."

He went on: "There was an issue between our accountant and them and the Charity Commission has admitted a mistake and it's all been restored as though it was never taken off."

Ashton, however, did admit that the Child Survival Fund was no longer a registered charity.

"We submitted accounts to Companies House which were not in the correct format and to be honest it was my fault," he said.

"We are in the process of having it restored to the Charity Commission."

Their lawyers at Russell-Cooke said that the fund was struck off by the Commission after being dissolved by Companies House. It has since been restored as a limited company.

But until it's restored as a charity, why is it using a registered charity number?

Ashton said: "The trustees have not issued any new mailings since they were advised by the Charity Commission that they had been taken off."

The mailings of earlier this year would have occurred because "there was a lot in the system".

The Charity Commission told us this week that it has warned the Child Survival Fund to "suspend all communications and activities which refer to the charity and its number until this issue is resolved".

The lawyers at Russell-Cooke demanded that we don't run the story for two reasons - the first being that Penman apparently followed Richards from his
office to his home, which is complete tosh.

The second reason is it claimed there were inaccuracies in an article we ran in April last year about Cerullo. But if they're so annoyed about it, why have they taken more than a year to complain?

Beware: the £50 criminal records check job scam

2012-05-16T22:00:00Z

Hundreds of desperate job seekers have paid £50 for a criminal records check to clinch a job that doesn't exist.

Many turned up for their first day of work as a security guard at the London offices of the Trades Union Congress only to be told they'd been scammed.

Guards Force Security Ltd, the firm offering the supposed jobs, is not registered at Companies House. Victims paid £50 using online vouchers and were told the money would be refunded if they had no criminal record.

"We've had around 200 people come here this year," said a TUC spokeswoman.

These crooks, using the same 0845 166 1649 number, have pulled the same trick using fake company names such as All Site Services Ltd in Edinburgh, Eagle Security Ltd in Cardiff, Fusion Security Lld in Glasgow and even Lidl Warehouse Ltd in Birmingham.

Other names used include Eurowine Warehouse, Omega Recruitment, Samsung Warehouse and Active Security Ltd.

There is no link to genuine companies with similar names, who don't charge job applicants.

No legs .. and no sickness benefit either

2012-05-16T22:00:00Z

Work and Pensions Secretary Iain Duncan Smith wants to strip disability benefits from half a million people, including those who have "lost a limb".

What about those who have lost two?

Sharon, from Nottinghamshire, had both her legs amputated at the age of one but worked for 20 years as a support worker.

"I worked for one person for four years before I told them I had artificial legs," she said. "They thought I was joking. I didn't let being disabled stop me from doing anything."

Arthritis finally made Sharon give up work in 2009 and two operations have in constant pain, unable to wear her prosthetic legs due to the swelling and she is currently housebound.

"I have to get around the house on my bottom," she said. "I struggle to get upstairs and I sleep on the sofa."

She applied for an Employment and Support Allowance and has been put in the "work-related activity group", with a lower rate of benefit, and told to find a job.

Her benefit was taken away on May 1 as she had passed the new one-year cut-off for those in the work-related activity group, leaving her £240 worse off a month.

Sharon's appealing the decision with support from her GP who says she is "housebound and really is not fit to work".

The bent past of landbankers Curved Ball

2012-05-16T22:00:00Z

More proof that the only people who make money out of so-called landbanking deals are the rogues flogging the land.

Take CLS & Partners and Sterling Mortimar Ltd, two companies that have just been shut down in the High Court in the public interest.

They sold plots near Wakefield, West Yorkshire, to investors, saying they'd get planning permission for housing and then the value of the land would "increase tenfold". In fact, the council in Wakefield said planning permission was never even applied for and, had it been, it was "extremely unlikely" that it would have been granted.

The companies raked in £925,000 on the back of its lies.

More than £210,000 was spent on cars and £484,000 went to a third company, Curved Ball Ltd, since defunct.

And who ran Curved Ball? Step forward notorious landbanker Jack Chandler, of St Helens, Merseyside, a con man we exposed last year who drives a Jaguar XK with the personal plate PLO7 BUY.

The latest trucker training firm disaster - Alternative HGV

2012-05-16T22:00:00Z

Yet another HGV training firm has crashed, leaving hopeful truckers high and dry.

This time it's Alternative HGV, a trading name of Alternative Acquisitions Ltd.

When we visited its rented office in the City of London we were told by a manager: "We've suspended them for unpaid invoices."

The firm's phones are no longer answered and there's no point trying to find director Patrick Boyce, 32, at the "home address" that he has given to Companies House - this is just a virtual office.

"My son paid them more than £1,500 for the theory and practical tests and was promised a job driving for Tesco," said Heather Rose, of Camborne, Cornwall. "But Tesco know nothing about them and now they can't be contacted."

Despite the picture of a load of trucks on its website, Alternative HGV was just a brokerage that was supposed to pass clients onto other firms that actually carried out the training.

It's not the first and won't be the last training brokerage firm to leave customers in despair until this free-for-all industry is regulated.

Regency Coins shut down

2012-05-16T22:00:00Z

Regency Coins UK claimed it gave coin collectors "an old-fashioned personal service".

In the sense that highway robbery is an old-fashioned personal service.

It sold coins "far in excess of their true market value", says the Companies Investigations section of the Insolvency Service, and even flogged coins that it did not own and sometimes sold the same coin to multiple buyers.

The company, based in Southend, Essex, also "abused client bank and credit card details, taking monies in excess of the agreed purchase price".

There were two directors - Mark Colin Hall and Alan James Worby, who both resigned in September 2010.

Around £970,000 was paid to a third man, Steven Lawson, a 35-year-old from Canvey Island, Essex, who previously ran coin collecting firm Investors in Time, which was forced into compulsory liquidation in 2007. Regency Coins has now gone the same way.

Now, credit where it's due. This sham was exposed in exquisite detail on the Tax Free Gold website run by Lawrence Chard, which courageously stood firm despite legal threats.