Wednesday, April 29th, 2009
The statutory holiday entitlement increased on 1st April from 4.8 weeks to 5.6 weeks.
It means that an employee who works a five-day week is now entitled to 28 days annual leave. The entitlement includes bank holidays so the change will make no difference to employers who already give four weeks annual leave plus bank holidays. Those who do not, however, will need to make adjustments.
Part-time workers have the same holiday entitlement on a pro rata basis – that is, 5.6 times their normal working week.
For advice on all employment matters contact Kevin Smyth.
Monday, April 27th, 2009
People setting up a business together should put down in writing the basis of their relationship to reduce the risk of disputes in the future.
However, even when there is no written agreement, the law can still help to resolve differences as in the recent case of two builders’ merchants, Mr R and Mr D, who ended up disputing whether or not they were business partners.
The two men had bought a company from their former employer. They had no written agreement but they were joint signatories to the business bank account and they took equal shares of the profits.
The business had an overdraft facility which was secured by a legal charge on Mr D’s property. However, both men were liable for the debt and correspondence from the bank was issued to both of them as joint account holders.
The relationship later broke down and Mr R decided he wanted to either dissolve the partnership or sell his 50% stake to Mr D. Mr D refused to accept that there was a partnership. He said they were not business partners but simply working partners and Mr R had merely been a salaried employee.
The court decided in favour of Mr R saying the fact that the overdraft had been supplied by Mr D was not enough to say they were not partners. He had never informed Mr R that he thought of him as just a salaried employee.
The bank account was in both their names and it was unlikely that an employee would be allowed to draw as much money as the owner of the business. It was clear that the operation of the business matched the definition of a partnership as found in the Partnership Act 1890.
Therefore, there had been a partnership which had been dissolved when Mr R wrote to Mr D informing him of his intentions.
Contact Steven Kinch for advice on all business disputes.
Sunday, April 26th, 2009
The statutory dismissal and disciplinary procedures, which have been heavily criticised by employers since they were introduced five years ago, have now been repealed.
They have been replaced by a new framework based on the provisions of the Employment Act 2008. Employers should now follow the guidelines in the new ACAS Code of Practice on discipline and grievance, effective from 6th April.
One of the main aims of the changes is to provide both employers and employees with greater flexibility. The mandatory three step process of letter, meeting and then right of appeal no longer applies. Instead, the ACAS code sets out the principles that employers and employees should apply to achieve a reasonable standard of behaviour.
Many employers will be relieved to hear that the dismissal of an employee will no longer be considered automatically unfair if there is a breach of procedure.
Instead, a tribunal will consider whether a failure to follow the code was unreasonable taking all the circumstances into account, such as the size of the business. A tribunal will still be able to rule that a dismissal was unfair for procedural reasons but it will also be able to adjust the level of compensation if it considers that the procedural failings had no material impact on the outcome.
Tribunals will also have the power to adjust awards by 25% if either side has failed to act reasonably or failed to comply with the code of practice.
Tribunals will also be able to award compensation for financial loss in certain cases, for example, where an employee is making a claim in relation to deductions from wages or redundancy payments.
Whether the changes bring the expected benefits remains to be seen but in the short term there is a danger that they may cause some confusion. Employers may wish to revise their codes of practice and they should certainly seek legal advice before taking any action in relation to their employees.
For advice on all employment matters contact Kevin Smyth.
Saturday, April 25th, 2009
A landlord has won its appeal in a case which centred on whether or not a tenant’s notice to end a lease under a break clause was valid, even though it wasn’t acknowledged until ten months after the break date was reached.
The case involved a company which rented some commercial premises on a 15-year lease. The lease contained a break clause that allowed the tenant to terminate after five or ten years by giving six months’ notice.
The lease required that notices had to be in writing and unless they were acknowledged by the landlord, they had to be sent by registered post or recorded delivery.
The tenant decided to take advantage of the break clause in July 2005 and sent notices by both letter and fax. The letters were posted by a process server and placed in the wrong box and so were ineffective. The faxes were sent and received by the landlord but at a time when its offices were closed.
The landlord did not acknowledge receipt of these faxes until December 2006 – more than 16 months after the last possible day for serving a six months notice period and more than ten months after the fifth anniversary of the break date itself.
By this time, the tenant had vacated the premises despite protests from the landlord who said the notice was ineffective and began proceedings to recover rent.
The judge ruled in favour of the tenant saying that the acknowledgement of the faxes by the landlord, albeit several months after the event, had retrospectively validated the tenant’s notice. However, that ruling has now been overturned by the Court of Appeal.
It held that the informal notice sent by fax could only become valid once it was acknowledged, but that acknowledgment would have to be before the five-year break point had been reached. The notice could not be retrospectively validated by a later acknowledgment.
Lord Justice Rix said: “…it was too late for an acknowledgment once the break point had passed. However, I also think, but it is unnecessary to decide, that the requirement of a six months’ notice means that certainty must be achieved before the six months deadline and that a notice which is invalid or not yet valid at that time cannot become effective merely because its receipt is acknowledged thereafter.”
It followed, therefore, that the lease had not come to an end and could not do so under the break clause for another five years. In the meantime, the landlord retained the right to charge rent.
For advice on all commercial property matters contact Paul Slot.
Friday, April 24th, 2009
The European Court of Justice (ECJ) has ruled that obliging UK workers to retire when they reach 65 is not unlawful as long as it can be “justified by legitimate aims”.
Those aims would have to be part of legitimate social and employment policies rather than just the convenience of employers.
The ECJ ruling is the latest stage in the case brought by Age Concern challenging the UK’s default retirement age of 65.
The European Directive on Equal Treatment bans discrimination on the grounds of age. Age Concern believes the Employment Equality (Age) Regulations 2006 fail to fully implement the Directive because they allow a default retirement age of 65.
The ECJ was only asked to rule on whether the default retirement age was permissible under the directive. It was not asked to go further and rule on whether or not it was justifiable. The case will be referred back to the High Court in England to decide whether or not the default retirement age can be justified.
However, the ECJ said the UK government would have to “overcome a high hurdle” if it wished to show that forced retirement could be “objectively and reasonably justified by legitimate aims, such as those related to employment policy, the labour market or vocational training”.
The statement continued: “By their public interest nature, those legitimate aims are distinguishable from purely individual reasons particular to the employer’s situation, such as cost reduction or improving competitiveness.
“It is for the national court to ascertain, first, whether the United Kingdom legislation reflects such a legitimate aim and, second, whether the means chosen were appropriate and necessary to achieve it.”
There are currently about 260 related cases on hold pending the outcome of the case which now reverts to the High Court in London.
We shall keep clients informed of developments.
Thursday, April 23rd, 2009
The Court of Appeal has upheld a ruling that a father should be granted residency of his two children during school term time despite opposition from the mother.
At one stage during the couple’s relationship, the father had been the primary carer of the two children and had been responsible for sending them to the local school. When the relationship broke up, the mother took the children with her to live with her family.
The father then applied for a residence order so the children could return to him. The judge said he preferred the father’s evidence but noted that it was a finely balanced case and the children would thrive with either parent.
He then decided that the children should be returned to the father during term time so they could continue their education at the school they used to attend before their mother took them away. They should then spend alternate weekends and the school holidays with their mother.
The mother appealed saying the status quo was with her – that is, the children were already living with her and they should not be disturbed from their settled environment – especially as the judge had already said they would thrive with either parent.
However, the Court of Appeal upheld the judge’s ruling. It said that having decided the issue was finely balanced, the judge had been mindful of the need to consider the child welfare checklist as directed in the Children Act 1989. On that basis he had decided it was in the children’s best interests that they lived with their father during term time.
The Appeal Court judges said there was no reason to interfere with that decision.
For help with all your family matters contact Marie Stock.
Wednesday, April 22nd, 2009
The fact that a supplier makes some mistakes on its invoices is not a good enough reason for a customer who doesn’t settle the account on time to avoid late payment interest.
That was the ruling handed down by the Court of Appeal in a case that will give encouragement to all businesses facing cash flow problems because of late payments.
The case involved a company called Ruttle Plant Hire Ltd and the Department for Environment, Food and Rural Affairs (DEFRA). Ruttle had carried out some work for DEFRA but the contract had been arranged in a hurry and the terms of business had not been clearly defined.
When the invoices were not paid on time, Ruttle claimed it was entitled to charge interest under the Late Payment of Commercial Debt (Interest) Act 1998. However, the judge ruled against Ruttle because there were mistakes on some invoices which were calculated using the wrong rates for plant hire.
Ruttle then took the case to the Court of Appeal. Lord Justice Jacob said the issue was whether or not the “notice of the amount of the debt” required that the invoice should be correct before the provisions of the Act would apply.
DEFRA submitted that any error, regardless of how small, would be enough to prevent the Act applying and interest being payable. The Appeal Court judges rejected this argument saying there was no reason to interpret the requirements of the Act as meaning that the amount stated on the invoices should be “the true amount, the whole true amount and nothing but the true amount”.
He said it would make no sense to suggest that the Act required the invoice to be perfect before interest could be charged. If that were the case then a customer might start looking for the smallest detail of error in an invoice so he could avoid being charged interest if he failed to pay on time and so the purpose of the Act would be frustrated.
It would be acceptable for a company to withhold payment for sums which were in doubt but that right could not be extended to paying nothing at all and then expecting to escape the high rates of interest chargeable under the Act.
For advice on all company disputes contact Steven Kinch.
Tuesday, April 21st, 2009
The Local Government Minister, John Healey, has urged local councils to end years of unfairness and right the wrong of unequal pay.
He made the call as he announced that the Government would offer more support to enable local authorities to fund equal pay settlements – usually for women – which often mean compensating employees who have been underpaid for several years.
Since 2006, councils have been allowed to sell some of their assets or borrow against them to raise more than £1bn to meet the costs of settlements. Mr Healey announced that councils will be allowed to continue this programme next year giving them more flexibility to meet their obligations.
Mr Healey said: “Work of equal value deserves equal pay, in councils as in any sector.
“Thousands of council workers, and particularly women, lost out due to unequal pay, which in some cases persisted for decades. It is for councils, working with local unions, to right this wrong.”
Equal pay claims in the public sector have received a lot of publicity over the last few years, largely because of the huge sums involved in settling claims dating back over several years. Employees in the private sector have also shown an increasing willingness to assert their right to equal pay for equivalent work.
Any employee, whether in the public or private sector, who feels they have been underpaid or discriminated against in any way, should seek legal advice as soon as possible.
Please contact Kevin Smyth for more information about this or any aspect of employment law.
Monday, April 20th, 2009
The process of registering Lasting Powers of Attorney (LPA) is being made cheaper and simpler.
The announcement by the Office of the Public Guardian, which administers the registration process, follows a public consultation on the implementation of the Mental Capacity Act 2005.
LPAs were one of the main provisions introduced by the Act in 2007.
The changes, which came into effect on 1st April, mean that the cost of registration is reduced from £150 to £120 and the forms and accompanying documentation will use plainer language.
LPAs have proved very popular since they replaced the old Enduring Powers of Attorney (EPA) because they offer more choice to people who want to prepare for a time when they may lose some of their mental capacity.
The property and finance LPA allows you to appoint someone to look after your financial affairs if you become incapable of doing so yourself. The personal welfare LPA lets you grant an attorney authority over such matters as health care and the kind of treatment you receive.
In the first 12 months after being introduced, the number of people registering LPAs was three times higher than the figure for EPAs in previous years.
The Public Guardian, Martin John, said: “We have listened to people’s concerns about the length and complexity of the forms and we have responded. For example, we have reduced the risk of errors through improved design and have included guidance to make completion simpler.
“Reducing the LPA registration fee demonstrates our commitment to provide a cost-effective service and to encourage take up of such an important safeguard.
‘We aim to deliver a service that is easy to understand and use, and improving the forms is a key step in that direction.”
The Office of the Public Guardian needs to register LPAs before they can be used. Registration is followed by a 42-day statutory waiting period to allow people to raise objections to the registration. This waiting period is one of the safeguards built into the process to ensure that the LPA has been drawn up properly and is not fraudulent.
People who have registered LPAs say it provides peace of mind to know that arrangements are in place to protect their interests should they lose the capacity to do so themselves as they get older.
Please contact Sue Bedwell if you would like more information about Lasting Powers of Attorney.
Sunday, April 19th, 2009
Stricter regulations mean that Home Information Packs (HIPs) now have to be available as soon as a property is put on the market.
Sellers must also include a Property Information Questionnaire (PIQ) covering areas such as the property’s service charges, flood risk information, structural damage, gas and electricity safety and parking arrangements.
The PIQ is in addition to the other required documents such as the Energy Performance Certificate rating the property’s energy efficiency, evidence of title, the results of standard searches and the terms of sale.
Until now, sellers were allowed to request and pay for a HIP and then start marketing their property for up to 28 days before the HIP became available. The new regulations, effective from 6th April, mean that HIPs now have to be available from the outset and they must contain a PIQ.
The PIQ is also required for leasehold properties.
Please contact Sophie Warren if you would like more information about HIPs or any aspect of buying and selling property.
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