Breeze & Wyles Solicitors LLP Employment Law Update

BREEZE & WYLES SOLICITORS Employment Law Update July 2012

Dear Employer

The holiday time is upon us, and just to dampen your enthusiasm (as if the recent rain hadn't already done so), the European Court of Justice has ruled that workers who are ill during paid annual leave are able to interrupt the annual leave and take it at a later date, irrespective of whether the sickness started before or during their holiday. (See below.)

Despite that, we hope that you manage to enjoy a well-earned break this summer, preferably somewhere hot and sunny - assuming you can drag yourself away from the Olympics. As usual, if you have any particular employment issues, please do not hesitate to contact us: details are at the end of this letter. If you have any comments or suggestions on this newsletter, please email newsletter@breezeandwyles.co.uk

Kind regards

The Employment Law Team

Some Recent Cases in Employment Law

Annual Leave and Sickness

The ECJ has recently made a decision which will affect all EU members. In a Spanish case the ECJ held that the EU Working Time Directive requires that a worker who is sick during paid annual leave is able to interrupt the annual leave and take it at a later date, irrespective of whether sickness commenced before or during the annual leave. The ECJ (on appeal) reiterated that the right to paid annual leave is an important principle of EU social law. The purpose of it is to enable workers to rest and enjoy a period of relaxation and leisure; on the other hand, the purpose of sick leave is to enable a worker to recover from an illness that has caused him to be unfit for work. The Court had already held in a previous Spanish case that a worker who was on sick leave prior to, and during, a period of previously scheduled annual leave had the right, at his request, to take the annual leave when he had recovered.In this case, the ECJ held that the point at which the temporary incapacity for work arose is irrelevant. A worker can take paid annual leave which coincides with sick leave at a later time, irrespective of the point at which he became incapable for work. Essentially, it means that workers who fall sick when they are on holiday will end up being able to take extra holiday. [Asociacion Nacional de Grandes Empresas de Distribucion (ANGED) v Federacion de Asociaciones Sindicales and ors]

Carrying forward accrued holiday entitlement

Continuing the holiday theme, the question often arises as to how long a sick worker can carry forward accrued holiday entitlement. The lead authority from the European Court of Justice approved a carry forward period of 15 months. (Neidel v Stadt Frankfurt am Main 2012). Employers and vicarious liability Recent judgments by the Court of Appeal have potentially expanded the situations in which employers may be found vicariously liable for the acts of their employees. The current test of whether an employer is vicariously liable focuses on the closeness of the connection between the act of the employee and the duties he or she is engaged to perform, as broadly defined. This test required a value judgment by the Court taking account of all the circumstances of the case and looking at the matter in the round. The recent judgment in two combined appeals has made it clear that it is not sufficient that the employment simply provides the opportunity to commit the wrongful act. An irrational act of violence committed promptly in response to lawful instructions is now likely to suffice. In one of the cases in question, an employee had called his boss, the Deputy Manager of a care home, to report in sick. The claimant followed the usual practice of ringing around to find cover. He telephoned another employee, Mr Marsh, who was drunk and refused to cover the shift. Mr Marsh then went to the care home, saw his boss in the garden and immediately attacked him. At first instance, the Judge found there was no vicarious liability as there was insufficient connection to Mr Marsh's employment. The Court of Appeal upheld this, saying that the instruction or request was no more than a pretext for an act of violence unconnected with work. [Weddell v Barchester Healthcare Ltd]

In the other case, the Claimant was attacked by Mr Brown, a junior employee, because he had taken Mr Brown to task over performance and asked him to assist with the work task. Mr Brown threw him onto a table, injuring his back. At first instance, the Judge held that Mr Brown was not acting in the course of his employment. However, the Court of Appeal found that the required connection between the act and the employment was present. [Woolbank v Woolbank Fox Designs Ltd]

Employee Status - does it matter who pays the wages?

Just in case anyone was wondering whether lap dancers were employees of the place where they perform, a recent case has shown that a lap dancer was an employee. In Quashie v Stringfellows Restaurants Ltd, the Employment Appeal Tribunal had to consider the situation. The Tribunal had found that in this case the lap dancer was not an employee but the EAT said that although her earnings came entirely from customers rather than from Stringfellows, she was paid for work done. The case showed that employment status is not decided by reference only to the source or the root of the payment, and the Tribunal was wrong to focus narrowly on the "wage/work" bargain, as that does not encompass all forms of bargains within employment relationships.

What's in the pipeline

Pension Alert

Employers should remember that on 1st October 2012, the first of the stages for the new pension regulations comes into force. An employer's staging date will be based on the number of people in its PAYE scheme from 1st April 2012. 1st October 2012 will be for employers who have 120,000 or more people in their PAYE scheme; at the other end of the scale, the date for those with 250-349 people will be 1st February 2014.

For smaller companies, the important date will be 1st October 2014. The staging timetable is available on the DWP website.

National minimum wage

On 1st October 2012 this will increase from £6.08 to £6.19 an hour (main rate). The youth rate and the rate for workers aged 16-17 stay the same. The apprentice rate will increase from £2.60 to £2.65 per hour. The accommodation offset increases from £4.73 to £4.82 per day.

Proposed fees for Employment Tribunal Claims

It is the Government's intention to introduce fees for bringing and continuing Employment Tribunal claims. These would be introduced in the latter half of 2013. They will be charged in two stages: the first at the issue of the claim and the second prior to the hearing. Those on low incomes will be excused payment (following the Civil Courts system). Also, Tribunals will be given a discretionary power to order the losing party to pay any costs that the successful party incurred by way of fees. There will be two levels of fees: Level 1: Straightforward claims, e.g. unauthorised deductions from wages and redundancy payments. There would be a fee of £160 for issuing the claim and a further £230 at the hearing stage. Level 2 claims would involve more complex issues e.g. unfair dismissals and discrimination. Those fees would be £250 and £950. There would also be a fee structure for multiple claims (those involving more than one claimant). The idea is that the fees can encourage people to consider further whether a formal claim needs to be lodged at a Tribunal or whether it can be settled informally e.g. by mediation, conciliation etc. Even if a claim is started, then the further fee to be paid before the hearing would give the parties a chance to consider their position.

The Employer Traps and Other Tips

Pay in lieu of holiday Remember that when employment is terminated an employee must be paid in lieu for statutory holiday accrued but untaken. That applies even if it was because they were off sick (and receiving sick pay). However, the obligation is merely to pay it up to a maximum of 4 weeks (the minimum period under the EU directive), irrespective of any further entitlement allowed by the nation state (e.g. our 8 Bank Holidays).

Misconduct and payments in lieu of notice

A recent case has highlighted the need to ensure that employment contracts and service agreements provide for the employer being able to avoid paying money in lieu of notice where it is subsequently discovered that the employee is guilty of gross misconduct.

Other news from Breeze and Wyles

Debt Recovery Service

We offer a low cost, fixed fee debt recovery service aimed at assisting businesses to chase unpaid invoices. An initial letter to a debtor costs just £2.00 plus VAT. This means that businesses can cost effectively chase their aged debtors. Many businesses now use this service to chase debts that otherwise would have been written off, because it offers such a cost effective and efficient solution.

For further information please contact Rita Wright at: rita.wright@breezeandwyles.co.uk or telephone 01992 558411.

Breeze and Wyles Solicitors LLP are a leading law firm with offices throughout Hertfordshire and Middlesex, providing quality legal service in all of the mainstream areas of the Law for over 90 years. We are one of very few law firms that offer services online.

Check out our services Solution for volume legal instruction at www.breezeplus.co.uk

We have been awarded Lexcel Accreditation and are regulated by the Solicitors Regulation Authority. For further information on any of the issues referred to in this newsletter, or any other employment matter, please contact Jane Dismore at: 2nd Floor, Stag House, Old London Road, Hertford, SG13 7LA

Ostrich approach won’t work if the worst happens

Companies that do not take health and safety procedures seriously risk large fines if their careless attitude results in a person’s death.

Lionsteel Limited has been fined £480,000 and ordered to pay £84,000 legal costs by Manchester Crown Court. The company had pleaded guilty to a charge of corporate manslaughter following the death of an employee, Stephen Berry, who died in a 40 foot fall at the company’s premises in Hyde.

The guilty plea was agreed by all parties, which averted personal charges of manslaughter by gross negligence against three company directors and Health & Safety at Work Act charges against the company.

This is the third time a company has been convicted under the Corporate Manslaughter and Corporate Homicide Act 2007, and it is the largest fine handed down so far. However the fine falls short of the level suggested by the Sentencing Guidelines Council, which recommends that a fine for corporate manslaughter should rarely be less than £500,000 and may be very much higher.

However, all three corporate manslaughter convictions to date have been against small to medium sized businesses, and judges have been concerned to balance the aim of punishing the company against jeopardising the jobs of the guilty company’s workforce. In practice the effect is that the fine will be as high as it can be without putting the company out of business.

In the first case, where a single director and shareholder were involved, Cotswold Geotechnical Holdings Limited was fined almost £400,000; in the second case, pig farming company JMW Farms was fined just under £200,000.

What should company directors do to ensure that they and their company avoid prosecution?

• Health and safety must be taken seriously
• Staff must be properly trained especially in dangerous situations
• Training and working practices must be kept under review so that they are relevant at all times
• The management must ensure that there is a safety-conscious culture at all levels and that actual practice is in line with the company’s statements about safety
• Working practices must be constantly monitored and reviewed
• There must be an open culture so that any employee, no matter what their level, can raise concerns about safety

Said corporate expert Brendan O’Brien from Breeze & Wyles Solicitors LLP : “The sentences handed down may be less than the guidelines, but it sounds a warning bell to small companies who think ‘it won’t happen to us’ and do not take health and safety and risk assessment seriously. If the worst happens, they can expect fines that will leave them with a struggle to survive. Combined with the loss of reputation it could be the death knell for them.”

He added: “Every company should be keeping up to date with Health and Safety legislation and making sure that employees have an up to date signed record of the training they’ve received.”

ENDS

Web site content note:
This is not legal advice; it is intended to provide information of general interest about current legal issues.


Breeze & Wyles completes 'un petit Tour de France'

In keeping with probably Britain's greatest ever sporting success on the Champs Elysees on Sunday 22nd of July 2012 when for the first time the country saw its first winner of the Tour de France, Breeze & Wyles Solicitors LLP attempted to emulate some of the effort required by Bradley Wiggins in his achievement. When I say some I mean a very very small part.

Supported by Barclays Bank plc, two partners of Breeze & Wyles Solicitors LLP, Brendan O'Brien and Murray Fraser (along with four other people completed) a 320 mile trip around Provence and the Cote d'Azur.

Day 1: Nice to Draguignan
Day 2: Draguignan to Cassis
Day 3: Cassis to Le Lavandou
Day 4: Le Lavandou to Frejus
Day 5: Frejus to Nice arriving on Bastille Day

Apart from a crash in Toulon when one of the cyclists decided to follow defunct tram lines rather than the cycle part progress was uneventful. No training could have prepared the participants for the near 40 degree celsius temperatures faced and the 10,000 feet climbed throughout the ride.

It was a pleasure to arrive in Nice at the end of the ride on Bastille Day and join in the celebrations with the locals.

Once again many thanks to our Sponsors Barclays Bank plc who provided support to the team in their efforts.


Hopes pinned on change in law for unmarried couples who break up

Hopes are being pinned on the Government bowing to pressure to change the law to give greater rights to unmarried couples who break up, after the Supreme Court has added its voice to calls for reform.

The call for change came as judges ruled in the case of Gow v Grant where one partner claimed compensation for financial losses when the relationship ended, which ended up in the Supreme Court after a battle through the Scottish courts.
She had agreed to move in with her partner provided they became engaged. He then encouraged her to sell her flat. When they later split up, she claimed for the losses she had suffered and won a ruling of £39,500 in compensation from her former partner, which was mainly made up of the amount by which the flat’s value would have gone up if she had not sold it. The case went through the Scottish Courts on appeal, before being referred to the Supreme Court, who decided in her favour.
The decision of the Supreme Court gives the seal of approval to section 28 of the Family Law (Scotland) Act 2006, which allows the Scottish Courts to order capital payments to be made where one partner has made disproportionate contributions to the household, where this has left them out of pocket, or the other has reaped a bonus. It’s not intended to give the same rights as married couples, but was designed to give the courts power to correct financial imbalances between couples who might have made ‘contributions or sacrifices without counting the cost or bargaining for a return.’
Co-habiting couples in Scotland have had the benefit of section 28 for some years now, and, although the courts have been cautious in interpreting it, this case should lead the way to more widespread claims.
But the rest of the UK lags behind and although the Law Commission has called for reform, the Government has delayed implementation. Now, the reform has the backing of the highest court in the land and hopes are being pinned on the change.
Lord Hope, giving the judgment of the Supreme Court, said: ‘The main lesson from this case, as also from the Law Commission research so far, is that a remedy such as this is both practicable and fair. It does not impose upon unmarried couples the responsibilities of marriage but redresses the gains and losses flowing from their relationship. As the researchers comment, ‘The Act has undoubtedly achieved a lot for Scottish cohabitants and their children’. English and Welsh cohabitants and their children deserve no less.”
Said Olive McCarthy, family lawyer with Breeze & Wyles Solicitors LLP: “As English law now stands, a cohabiting partner has no right to a pay-out on breakdown of the relationship unless they can show that they have some sort of ownership right in property owned by the other partner. For example they would have to show that they contributed towards the purchase price or mortgage payments. This can put the weaker member of a couple at a disadvantage.
“With the full backing of the judiciary from this case, it’s likely we’ll see a speedier change in the law.”

ENDS

Web site content note:
This is not legal advice; it is intended to provide information of general interest about current legal issues.
References

Gow v Grant [2012] UKSC 29

Family Law (Scotland) Act 2006

Cohabitation: The Financial Consequences of Relationship Breakdown (Law Com no.307) ( Law Commission report)


Breeze & Wyles hosts Green Business Networking: Controlling your Environment'

Green Business Networking: ‘Controlling your Environment’

Join Environmental Population for a green business networking event taking place at Breeze and Wyles Solicitors LLP in Hertford. The event will feature short presentations from John Thain, Environmental Manager of BAA Stansted, and Alex Lancashire of Interior Control within the theme 'Controlling Your Environment'.

Using Environmental Population’s unique 'Cluster' networking format there will be opportunity to promote your business to others, so don't forget your business cards.

Environmental Population is a membership based organisation which offers some great options for their members to promote what they do, develop new business contacts and sales and ultimately help the business community become fully sustainable.

Date and venue: Tuesday 17 July 2012 at 4.00-6.00pm2nd Floor Stag House, Old London Road, Hertford SG13 7LA

Speakers:

• John Thain, Environmental Manager of BBA Stansted, will be discussing the approach the airport is taking.

• Alex Lancashire of Interior Control will be explaining how we can get a firmer grasp on our building management systems.

Planning Made Easy?

Further moves to simplify the planning system and make it more accessible to people in communities were set out today by Planning Minister Greg Clark.

The package of measures includes proposals to make it easier to re-use some existing buildings without needing planning permission including the so-called 'meanwhile' use of vacant commercial buildings; streamlining the amount of paperwork needed for a planning application; speeding up planning appeal decisions; reducing the volume of planning guidance; and ensuring planning departments are properly resourced to assess applications promptly and efficiently, reducing the burden on council taxpayers.

The Government has already taken steps to improve the planning system through the National Planning Policy Framework and the Localism Act, which are already delivering results.

For example, the rate at which councils are putting in place a local plan is increasing in comparison to the average over the previous seven years and over 100 local authorities are now working with front-runner communities on neighbourhood planning.

Today's proposals will help to maintain the rapid pace of reform by removing unnecessary barriers, streamlining paperwork, and supporting swifter decision making.

Greg Clark said:

"Our reforms to the planning system are making it simpler, clearer and more accessible to people in communities.

"Following the simplification of the national planning policy in the National Planning Policy Framework, these proposed changes streamline the process of applying for planning permission.
"Our aim is to have a system that applicants and members of communities can be confident will give a reliable, swift and fair outcome."

The measures include:

Making it easier to re-use existing agricultural, retail and commercial buildings, such as offices and warehouses, without the need to submit a planning application, supporting small business growth. A consultation is being published on changes to the Use Classes Order, which determines the flexibility with which such buildings can be re-used. The consultation also proposes allowing so called 'meanwhile' or temporary uses of certain buildings to open up premises to new businesses and to bring redundant buildings back into use, in line with recommendations in the Portas Review.

Cutting out unnecessary information in the application process to make the system clearer, and easier to use, without undermining the ability for councils to make well-informed decisions. A consultation setting out proposals is being published today.

Following the approach of the National Planning Policy Framework in distilling 1,000 pages of policy into around 50, the next challenge is to review around 6,000 pages of supporting planning guidance. Details of the approach to be taken will be announced shortly.

Speeding up the process for determining planning appeals - proposals on shortening and streamlining the process will be published for consultation later this year.

Uprating local councils' planning fees in line with inflation thereby reducing the burden on ordinary council taxpayers, who otherwise end up subsidising developers. Planning fees are set by Government and have not been increased since 2008.

Ensuring councils whose planning decisions are consistent with an up to date local plan are not ordinarily liable for costs if their decision is appealed.

Making technical changes to the operation of the Community Infrastructure Levy including ensuring that developers are not charged the levy twice, on the same development, if they amend existing planning consent.

Extending the funding to April 2013 to the four organisations providing advice and support to communities leading the way on neighbourhood planning.

Sensible debt control can be an alternative to redundancies

by Maria Koureas-Jones, Assistant Solicitor at Breeze & Wyles Solicitors LLPIn these uncertain times, how do businesses with a profitable core operation ensure that they are able to grow when new opportunities arise?

Business decision makers should focus on maintaining a strong cashflow position.
In a recession, cost-cutting exercises are the norm to improve cashflow, usually achieved through redundancies and a tighter debt control system. However, redundancy is often primary, particularly true where a business’ goal is survival and salary costs are high. Whilst redundancies will help reduce staff costs long-term, in the short-term it may not materially improve cashflow because redundancy payments and notice periods have to be funded.

Entering the redundancy process will often result in key staff being taken “out of the business” while they oversee and manage the redundancy process and this limits the time the business is able to dedicate to customer acquisition and service. This will inevitably have an effect on turnover.

Change of emphasis to recovering aged debts
Any business will focus on customer and contract acquisition and then delivery to those customers. Whilst banks were lending in support of growth, book debt recovery was down the list of priorities as it supported the borrowing. However, as lending has been severely curtailed, focusing on recovering aged debts is imperative to position for growth. Without this focus, cashflow will not be as strong as possible and “scaling up” may not be a real economic option.
Solicitors, like Breeze & Wyles LLP, have noticed an increase in the age of debt upon which they are asked to advise, notwithstanding the fact that banks are placing greater emphasis on a business’ ability to review and analyse the profile of its debtor book.
Cost effective debt recovery may offer a real opportunity to improve cashflow in the short-term, without incurring the costs associated with the redundancy process and the detrimental effect that redundancies have on growth potential. A review of your aged debtor list will show a considerable amount of ‘survival’ or ‘growth’ money tied up in debt, much of which is long-term. Do not be a Bank for your clients with cheap funding because no interest will be paid and the risk of damage to your business increases with the debt.
So what can a company do?
· An analysis of the debtor book will ensure that your staff are not deployed on work for which payment will never be received.
· Ensure credit check monitoring is an essential part of the customer acquisition and retention process.
· The contradiction between aggressive debt recovery and customer retention is accepted but often a solicitor’s letter adds the necessary pressure to encourage payment by your debtor without over jeopardising the customer relationship.
· The cost of sending an initial solicitor’s letter to each of these debtors and follow up should be favourable compared to the cost of time/ redundancy pay and lost opportunity that will be involved in staff redundancies.
How does it work?
Solicitor’s letters before action are sent to chosen debtors. Added to the debt amount is compensation and interest to which you are entitled in order to maximise your claim. As already stated, many of your debts will likely be paid following these initial letters thereby providing immediate cashflow.
Where payment does not follow the letter before action, a business must decide whether to pursue the unpaid debts through the Courts. This assessment will take in to consideration whether a business can identify if a debtor is a “will not pay” or a “cannot pay” debtor and the solicitor investigates whether the debtor has sufficient assets to make Court action cost effective.

Solicitor letters and Court action all sound expensive. However, a company choosing this path can make the process affordable and viable by selecting solicitors that have low, fixed cost fees for sending letters before action and who offer debt recovery services with lower Court fees and fixed cost legal fees when issuing proceedings against those “will not pay” debtors.

Good debt recovery services ensure that aged debtors can be pursued quickly and cost effectively. It can offer an alternative solution for improving cashflow so that you can strategically place yourself to achieve the business’ goal. Whilst the business may need to still undertake other cost cutting exercises, depending on the level of aged debt, cost-cutting exercises like redundancies may not need to be at the top of the list.
Maria Koureas-Jones is an Assistant Solicitor in the Litigation Team of Breeze & Wyles Solicitors LLP. Breeze & Wyles LLP have offices in Bishop’s Stortford, Enfield and Hertford. They aim to provide innovative legal services that focus on clients’ needs and exceed their expectations.
They offer a low cost, fixed-fee debt recovery service for those businesses who wish to apply pressure to debtors releasing some of the considerable sums that are often tied up.
Their cost of a letter before Court action is £2.00 plus VAT.
For more information regarding debt recovery services, please contact beststart HR or Maria directly, at maria.koureas-jones@breezeandwyles.co.uk.