Supplementary memorandum submitted by
Thank you for taking the time to meet with me
last week. I found our discussions very constructive, open and
frank, and I was reassured by your insightful observations on
a number of the parties involved in this industry debate.
You asked me quite specifically about the status
of Codes of Practice, particularly in relation to their enforceability
and therefore the degree of protection that is afforded to signatories.
Enterprise's position on this is that we regard the commitments
and obligations contained within our Code of Practice as being
binding on both parties, and we expect the specific detail of
those obligations to be taken into account by a court, an independent
expert, an arbitrator, or indeed any other mediator or review
body were we to find ourselves in dispute with an Enterprise tenant
We make our commitments clear and expect at
all times to be able to demonstrate that we have upheld them.
In a large organisation such as ours, gthere is a risk taht we
may fall short of the standards I expect. When we are made aware
of such occurrences, our first task is to correct any shortfall
and our second is to review our internal controls to ensure that
we understand how such a shortfall occurred and how we may prevent
a reoccurrence in future.
I thought it may be helpful to provide some
of the wording which is contained in our new Code of Practice
which is in the final stages of drafting. This revised Code takes
account of all of the elements of the industry framework Code
of Practice agreed between the BBPA, BII and FLVA and we expect
to submit it for appraisal and accreditation by the BIIBAS scheme
in the new few weeks.
The following two sections of our draft code
deal specifically with your point about the binding nature of
the Enterprise Code.
This Code of Practice aims to clearly describe
the basis of our initial and on going relationship. Our overriding
aim is for both parties to enjoy a mutually profitable, respectful
and honest working relationship based on a shared commitment to
abide by the responsibilities and ways of working that feature
throughout this Code.
The requirement of each party to sign this Code
at the outset of our business relationship is an indication of
the importance we place on strict adherence to both it spirit
and content. It is not designed to replace the conditions set
out in your lease or tenancy agreement, which is binding throughout
the term and will always take precedence over this Code, but it
is intended to play a pivotal role in the conduct of our future
We regard this Code of Practice as a binding
agreement between us and in the event of any dispute or disagreement
between us, we expect the content of this Code to be taken into
account by any mediator, review body, independent expert or arbitrator,
including in the unlikely event that court action may be required
to resolve matters between us.
In addition to this binding status, the Enterprise
Code of Practice is accredited by the BII. Failure by Enterprise
to adhere to its responsibilities and obligations may lead to
the imposition of sanctions by the BII, including the possibility
of removal of accreditation if we persistently fail to deliver
any of our commitments.
If you have any concerns or cause for complain
or feel the provisions outlined in this Code of Practice or the
Industry Code have not been followed, you should first contact
your Regional Manager, who will seek to resolve the problem as
quickly as possible. If you are still unhappy or can't reach agreement
with your Regional Manager, you should escalate the matter to
your Divisional Director, Managing Director (Operations) or ultimately
the Chief Operating Officer. In the event that you continue to
believe that the company has failed to adhere to its responsibilities
or obligations under this Code, you may submit a complaint in
writing, providing full details of the circumstances of your grievance,
to the BII who will investigate matters on your behalf.
We also spent some time discussing the role
that the GMB now appear to be seeking in the pub industry and
the deeply disturbing and seriously irresponsible advice that
GMB is prepared to publish. We now have several examples of GMB's
attempted intervention in matters between us and individual lessees.
The most sinister of these activities relates
to the existence of a "secure" website, access to which
is restricted to individuals who have been "security screened".
We have been shown copies of some of the information which GMB
is publishing, from lessees who were at first inquisitive but
now feel that they are at risk of being misled and are concerned
as to the validity of the "advice" being given.
There are three specific issues to which I would
draw your attention, all of which incite tenances and lessees
to breach their lease agreement.
1. GMB have issued a template letter to
some of our lessees which claims that, by refusing to supply beer
for which we have no prospect of being paid, we are in breach
of the terms of their lease and this gives lessees the right to
buy outside of the tie without fear of recourse or subsequent
forfeiture. This advice is in direct contradiction of the clearly
specified terms of every lease.
2. GMB have issued an advisory note directing
licensees to refuse access to appointed agents such as the staff
of flow-metering companies. I realise that the use of flow-metering
equipment is a matter which your Committee has sought to clarify,
but I am again horrified that the GMB advice is in direct contravention
of the specified terms contained in each lease.
3. In an extraordinary sequence of events,
GMB appear to have advised one lessee to claim back several months
of rent under a Direct Debit Indemnity which the lessee's bank
had not alternative but to honour. After several weeks of procrastination
and correspondence with the lessee under the advice, we are informed,
of the GMB, we had no alternative but to instigate forfeiture
proceedings upon which all monies were immediately repaid. The
lessee concerned has told us that he believes that he was unwittingly
used as a "pawn" by the GMB to further their own agenda.
All of this GMB activity is being widely promoted
under an impression which I believe is being falsely given. I
have attached a GMB recruitment flyer which states that"Parliament
has given tied tenants legal immunity in trades disputes when
we are members of an independent and registered trades union.
There is no doubt in our minds that pub tenants need to use this
immunity to free themselves of the yoke of the pubcos and GMB
agrees with this."
I have also attached a copy of a memo issued
by the Unite union (not printed here) which makes it clear
that the GMB advice is flawed and false.
A number of other parties, in particular the
BII and FLVA, have made public their view that tenants following
this advice may be putting their livelihoods at risk. I am also
aware that the highly regarded trade advisor Phil Dixon (a former
union fire-brand himself) is publishing his view that the GMB
stance on these matters is both suspicious and dangerous. Anything
your Committee can do to highlight your concerns as to the advice
being provided by GMB would, I believe, be extremely valudable
to tenants and lessees.
I hope that my observations on the binding status
of our Code of Practice are helpful, and I hope that you will
be able to use the benefit of your Committee's status to provide
timely guidance and advice to licensees who are potentially at
risk of following GMB advice.
Finally, I enclose a recently completed report
from Investors in People (not printed here). It may surprise
many members of the Committee that Enterprise Inns has recently
beeen awarded Gold Status, the highest possible award from the
Investors in People organisation.
16 February 2010