Decision to scrap the trainee minimum salary was ill-considered and nonsensical
Last week the SRA abolished the trainee minimum salary, currently £18,590 in Central London and £16,650 elsewhere. This will be replaced in August 2014 by the national minimum wage of £6.08 an hour, which equates to £11,065 per annum and a monthly take-home of £838.
There are many reasons why the JLD is appalled by both this decision and the way it was taken. First, the timing; the Legal Education and Training Review (LETR) is ongoing and it is nonsensical for the minimum salary consultation to have taken place while the review’s outcomes are unknown. The regulator has yet to disclose why the minimum salary decision was not deferred until the LETR was complete.
The consultation opened on 11 January. There were initially six questions, which then increased to eight when the SRA realised that trainee solicitors could fall under the category of apprentices and earn £2.60 an hour. The four-month consultation was rushed at best and perfunctory at worst. Within days of the consultation opening, SRA executive director Samantha Barrass said: ‘Our consultation paper explains that there is no clear evidence that setting a minimum salary for trainees fulfils any of the regulatory objectives within the Legal Services Act.’ The JLD remains to be convinced that the consultation was well planned, demonstrated integrity and was, above all, fair.
There was no direct communication between the JLD and the board, despite the JLD being described as a ‘key stakeholder’. Indeed, we remain unsure about why the minimum was abolished. Reasons provided are that it is not a regulatory issue; it is not in the public interest; and it is not the best way to assist diversity. We agree it is not the best way to assist diversity; but it helps rather than hinders it. And usually, if something is abolished because it is not the best way to accomplish an aim, it is replaced by something else more suitable. In this case, the SRA has provided no insight as to how it intends to make the profession more diverse. All it has done is ‘hope’ that the number of training contracts will increase.
The SRA did not invite us to attend its public meeting, which was surprising given that we were a ‘key stakeholder’. However, three JLD representatives were present. Key issues seemed to have been predetermined and, despite the SRA’s subsequent press release advising that the decision was finely balanced, the board was unanimous. Indeed, one board member asked whether it would be possible for the SRA to grant a waiver if a firm was unable to pay £6.08 an hour; before she was quickly advised that no waivers for the statutory minimum wage could be granted by the regulator.
It is difficult to believe a board member could make such a comment given the ‘long time’ the board spent considering the proposal. The consultation, the reports following the equality impact assessment and even the agenda papers for the meeting all leaned heavily toward abolition. Any shred of support for abolition was seized upon, no matter how weak, while the JLD’s 90-page response barely merited a mention. So, where does this leave us? A firm paying minimum salary for a trainee in 2013 may think twice. Why take on a trainee in September 2013, pay them £33,300 (2 x £16,650) over two years, when you could take on a paralegal on the minimum wage in September 2013, give them a training contract the following year and thereafter pay them £33,195 (3 x £11,065) over a three-year period? Any sudden ‘increase’ in training contacts in 2014 may be down to firms adopting this approach, for which the SRA will doubtless take credit.
The JLD’s campaign continues. We are looking into monitoring a couple of cohorts starting their third undergraduate year or GDL/LPC this year. We will be seeking the support of those who think the SRA has made the wrong decision and we will be talking to the Law Society about a possible recommended trainee salary.
Hekim Hannan is chair of the Junior Lawyers Division