14 Oct 2009 13:38
Date: Wednesday, 14 October 2009
AUTOCLENZ
UPDATE ON LEGAL CASE -AUTOCLENZ v. BELCHER
In our recent half year results we reported as follows on a legal case involving 20 of our sub-contract valeters:
"In common with the majority of our competitors in the automotive valeting business, we provide many of our services through sub-contracting to individuals who are self-employed Operators. Autoclenz has been defending a court case (Autoclenz v. Belcher) for the last 18 months relating to the employment status of 20 operators, out of the total 2078 Operators used in 2008. We will continue vigorously to defend our position utilising specialists in this field. However we have made a financial provision in our 2008 accounts and our 2009 half year figures; whilst we believe this is no reflection on the likelihood of the outcome it is a prudent decision given the uncertainty of any legal action."
The Court of Appeal on 13th October issued a judgement that the 20 sub-contractors should be treated as employees. We are considering an appeal to the Supreme Court within the permitted period of 28 days from the date of the Court of Appeal's judgment. The issues of employment law involved in this case are complex, and in addition the findings of the Court of Appeal are to some extent specific to the working requirements of this particular auction customer.Autoclenz has a total of 250 customer accounts within our core valeting business with the majority of these accounts operating with different working practices to those in this legal case. The complete judgment may be found at http://bit.ly/1S2SmA.
We will continue to defend vigorously our position through every avenue open to us, including consulting with others in our industry where this type of sub-contract valeting service is common practice.
The financial costs of this legal case are open to a range of estimates. Having regard to professional advice and our remedies against the parties involved we believe that the provisions made as at 30th June 2009 are appropriate and reasonable to cover such costs. There will be further costs incurred during the current half year including an order to pay £25,000 on account of the legal costs of the other party in the Court of Appeal hearing.
We will update shareholders on developments whenever it is appropriate to do so.
Trading has continued to be satisfactory in the three months to September 2009, with operating profits continuing to show good improvement over the same period last year.
Enquiries:
Keith Gabriel / Fiona Tooley - Citigate Dewe Rogerson 0121 362 4035
Nick Cowles - Zeus Capital Ltd 0161 831 1512
Grahame Rummery - Chief Executive 07860 680428
James Leek - Non Executive Chairman 07966 528295