IGA News

Be Aware - August 2016

Be Aware - August 2016

29 July 2016

Shill Bidding

“If I put a vehicle in for auction, can I bid on it in order to increase my profit?”

Bidding on your own items within an auction in order to increase the price is always a tempting option. Such bidding practices have not been unknown but are they legal?

Bidding on your own goods at auction is illegal. The practice is known as ‘shill bidding’. Such actions, particularly at auctions where consumers are present will breach a number of legal protections.

Whilst there is a natural temptation to increase the profitability of auctions by bidding against yourself to increase the price, authorities have shown they have the tools and are willing to use them where this affects consumers. Whilst we have not seen an increase in enforcement within the motor trade for shill bidding, Trading Standards regularly investigate and prosecute motor traders using the CPUTR.

Carrying over Paid Annual Leave When Sick

“If sickness prevents a worker from taking annual leave, can the leave be carried forward?”

The case of Sobczyszyn v Szkoła Podstawowa w Rzeplinie confirmed that yes it does. Only on termination can payment be made in lieu. Annual leave therefore accrues during a period of sick leave. Also, if scheduled leave coincides with sickness, a worker can designate a different time to take leave.

The purpose of paid leave is rest and relaxation. Sick leave is for recovery from illness, it is not rest; annual leave can be rescheduled on recovery.

In summary, whether leave has been scheduled or booked makes no difference; if sickness prevents annual leave, workers must be able to use annual leave at a later date.

What is a payment in lieu of notice?

A PILON is effectively “instead of” the employee working their notice period. This means therefore that you are cutting all employment ties with them on their last working day and whatever their notice period is (be it through dismissal or resignation); it is paid as a lump sum payment in their final salary.

Put in practice, both parties agree it is not in either of their interests for the employee to work and a PILON is agreed. The employee will stop working on 1st May itself and the employee’s effective date of termination is 1st May 2016 because the PILON acts to remove what would have been the notice period.

Informal Disciplinary Action

“I have been asked to do a written warning to an employee. The manager has had a meeting about the incident with the employee, but it was not a disciplinary meeting. Can we give them this letter without holding a disciplinary meeting?”

Ordinarily it would not be fair to give a written warning to an employee without going through the process of a disciplinary hearing. This is because disciplinaries (and grievances) are governed by the ACAS Code of Practice which provides guidance on the procedure to follow, to ensure a fair disciplinary hearing.

To simply issue a written warning following an informal meeting (if there was no invite to the meeting explain the purpose of the meeting and right to be accompanied) would be in breach of the ACAS Code of Practice.

Employers can deal with matters informally whereby there is a meeting and effectively the employee is advised that their conduct is not acceptable, but a warning would not be issued or placed on their personnel file. It is effectively a ‘slap on the wrist’ but there is no record of the same.

If there is a matter that the Company feel warrants a written warning, it is always advisable to follow a full formal disciplinary hearing.


This advice is general in nature and it will need to be tailored to any one particular situation. As an RMI member you have access to the RMI legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate.