Employment NewsLetter February 2013

February 2013
Dear Employer
Our last newsletter referred to the increasing problems with social media in the workplace. We are pleased to offer a free seminar on this subject at our Hertford Office on Thursday, 11th April 2013 from 9am – 11am. The speaker will be Michael Duggan, Barrister. If you are interested, please email jane.dismore@breezeandwyles.co.uk and an invitation, with more detail about the event, will be sent to you.
Meanwhile, 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
LAP DANCER POLES APART FROM BEING AN EMPLOYEE
In an earlier Ezine, we reported the case relating to employee status, being Quashie v Stringfellow Restaurants. The Employment Appeal Tribunal (EAT) had held that the lap dancer was an employee. The Court of Appeal has overturned the decision and ruled that despite there being some contractual obligations, there was no contract of employment. The Court found that on the facts Stringfellows did not employ the dancers to dance but paid them to be provided with an opportunity to earn money by dancing for its clients. It was under no obligation to pay the dancer anything at all, and she negotiated her own fees with clients, taking the risk that on any particular night she would be out of pocket and receive from the club only monies from clients after deductions. The reality was the economic risk which was consistent with self-employed status.
Whilst we realise that not many of our clients or readers of this Ezine are in the business of employing lap dancers, it is a significant case on status of workers (and in any event, we aim to keep you up-to-date with the latest decisions).
NO CONSULTATION FOR REDUNDANCY
As employers will be aware, in order to avoid a claim of unfair dismissal it is necessary (in most cases) to carry out consultation before dismissing an employee; in any event, redundancy should be seen as the last resort (the alternatives to employment having been considered). However, a recent case confirms the principle that in appropriate cases, where consultation would have been “utterly futile”, the lack of consultation will not make redundancy dismissal unfair. This is seen in the recent case involving the restructuring of a sports company. The Board was reconstituted and a new HR Director appointed with the existing Head of HR made redundant. The company regarded the new employee as “head and shoulders” above the existing employee and argued that it would have been utterly futile to have a competitive interview of the two candidates. In this particular situation, given the urgency of the situation, the lack of consultation was not unfair and the reorganisation made this a redundancy situation. However, this should not be taken as a carte blanche to skip consultation in a typical case. This case was far from the ordinary case of redundancy selection as it concerned a Manager in a very senior post which was being lost due to a substantial reorganisation. In the vast majority of cases consultation should take place. [Ashby v JJB Sports PLC [2012]]
RELYING ON PREVIOUS WARNING
The Employment Appeal Tribunal (EAT) has given guidance on how far earlier warnings can be relied on in disciplinary hearings. In this case, an employee had been given a first warning (because of a dispute over a new system of working) and he later got a second warning (because of dangerous driving). He argued that the lack of the similarity between the causes of the two warnings meant that the earlier warning should not be taken into account. However, the EAT rejected that and their guidance includes the following:
· Tribunals must not go behind the facts of an earlier warning (unless satisfied that it was given for an obscure reasons or was clearly inappropriate)
· If the warning is valid, the Employment Tribunal cannot substitute its own view for that of the employer (i.e. it cannot say it would have imposed a lesser sanction)
· If a disciplinary warning has been validly issued and is still current, it can be taken into account even if it is for a dissimilar act
· When deciding what sanction to impose, an employer should take into account the factual circumstances of any earlier warning
· Employers should always take into account how other employees have been treated for similar offences (i.e. maintaining consistency)
[Wincanton Group PLC v Stone and Anor [2012]]
What’s in the pipeline?
Children & Families Bill
The Government has published the Children & Families Bill which aims to fulfill a number of commitments it has made on children and families, including proposals on shared parental leave and pay and extending the right to request flexible working to all employees.
New rights to shared parental leave and pay
The Bill will amend the Employment Rights Act 1996 to create new rights to shared parental leave and statutory shared parental pay. Precise detail will be contained in Regulations (as yet unpublished). What is clear is that women will continue to be eligible for maternity leave and statutory maternity pay or allowance but will be able to choose to end their leave and pay or allowance early and share the remaining leave and pay with their partner.
Time Off Work : Ante-natal care etc
There will be a new right for employees and agency workers in qualifying relationships to take unpaid time off work to attend up to two ante-natal appointments with a pregnant woman, for a maximum period of 6½ hours for each appointment. Those in a “qualifying relationship” are the pregnant woman’s husband, civil partner or partner, the father or parent of the pregnant woman’s child and intended parents in surrogacy situations who meet specified conditions.
Right to request flexible working
Amendments to the Employment Rights Act will extend the right to request flexible working from employees who are parents or carers to all employees. It is also proposed to remove the current statutory procedure for considering flexible working requests and allow employers to consider requests using HR processes. However, employers will be under a duty to deal with applications for flexible working “in a reasonable manner” and to notify the employee of its decision within three months of the employee’s application unless a longer period is agreed between the parties.
Please note the above is very much a brief summary of the prospective amendments.
The Employer Traps and Other Tips
Sick employees who receive payments under a personal health insurance policy
After a major case in 1996, it was very difficult for an employer to dismiss a long-term sick employee who was in receipt of payments from a personal health insurance policy. This was even if there was a contract containing an express provision allowing for dismissal in the case of prolonged incapacity. A recent case shows the position may now be different. The result is that employers now have greater freedom to dismiss employees who are on long-term sick leave even if they are receiving PHI benefit. However, it will all depend on the contract: there must be an express right to terminate for incapacity (even if PHI benefit is being received). You would be wise, however, to take advice before dismissing, as cases of this sort may raise disability arguments. [Lloyd v BCQ Ltd [2012]]


Employer Seminar: Social Media in the Workplace doesn't affect me?

Details:
The irresistible rise of social media is causing problems in the workplace. An increase in cases brought in Employment Tribunals and Courts reveals the issues that employers face, including:
•Staff spending time engaging on networks whilst at work;
•Use outside work which impacts on work, e.g. derogatory remarks about the employer or its customers;
•Cyber-bullying of other employees;
•Confidential information about the employer’s business being posted;
•The ownership of data created during the course of work, e.g. on LinkedIn.
As an employer you have to protect your business as well as your staff. But how can you do this? And how far can you go without facing a claim for unfair dismissal? Or breaching someone’s right to a private and family life?
Our essential FREE seminar on Thursday 11th April 2013 aims to address some of these issues in a practical way. Light breakfast refreshments will be provided.
Following the presentation there will be an opportunity to network with other attendees.
Speaker Michael Duggan, Barrister, Littleton Chambers
Date & Venue Thursday 11th April 2013 at 9:00-11:00am
2nd Floor Stag House, Old London Road, Hertford, SG13 7LA
Cost FREE
How to Book To book your free place, please respond by email to rachel.harper@breezeandwyles.co.uk or by telephone on 01992 558411 before 28th March 2013.


Homeowners warned over new care home fees rules

Experts warn householders to take care over asset protection schemes against future care home contributions.
Following the long awaited announcement on the changes to residential care fee contributions, homeowners with higher value property are being drawn to routes to protect their assets, but experts are warning them to watch out for expensive schemes that will not work.
From 2017, the total amount that the elderly will have to pay in care home fees will be capped at £75,000 for personal care, but not accommodation and food, after which the Government will step in and pick up the bill. The amount is equivalent to a stay of about two and a half years in residential care, which is longer than most people need.
Anyone with a home or assets worth less than £123,000 will get some help towards the costs – up from the current £23,250 means-testing threshold. Under the current system, anyone who requires care must pay all the fees out of their own money, unless and until they qualify under means testing.
With rising house prices, means testing is likely to force many people to sell their home to fund fees, unless they have planned in advance, which can help protect at least part of the value of the family home to keep it out of the means testing equation.
Said Hardeep Nijher, private client expert with Breeze & Wyles Solicitors LLP: “Anyone with property should start with a well-drafted will, which puts shares in the family home into trust. By changing ownership from “joint tenants”, which passes one share automatically to the other on death, to “tenants in common”, each partner can leave their share to who they like, which opens the way to ensuring that half the house will pass to their children.
“This is a simple, safe and proven method of limiting one’s liability for residential home fees by ring-fencing half the value of the family home and it’s particularly useful where remaining assets will be less than the limit.”
But he warned: “People are being targeted by companies who offer lifetime trust schemes which they claim will help avoid care home fees altogether, although many of these could prove useless as well as costly. Charges are as much as £4,000, but by trying to place all of their assets into trust, people run a big risk that their actions will be deemed to be deliberate “deprivation” of assets, and they could end up still having to pay fees.”
ENDS
Web site content note:
This is not legal advice; it is intended to provide information of general interest about current legal issues.

Chancel Repair Liability: A useful guide

With the impending deadline looming for registration of Chancel Repair Liability in October 2013 homeowners and Parochial Church Councils alike should be alive to the impact of registration or failure to register the liability.

A failure to register the liability will not be fatal to the right to claim the liability. However a failure to register before the date and also before an onward sale by the owner of the property will mean that the liability cannot be claimed against the subsequent owner. As a result in order to guarantee the right to claim PCCs should register the liability against properties before October 2013.

What does this mean for PCCs?

PCC members and in particular the officers are trustees of a charity and as a result have a duty to protect the property of the charity and promote its objects. PCCs members may have personal responsibility if they fail to do so without proper cause. Failing to register the liability and liability arising that is irrecoverable could create that personal responsibility.

How did Chancel Repair Liability arise?

A church building in broken into a number of parts, the relevant part being where the Altar is normally situated. This is known as the Chancel. In medieval times, with the coming of Christianity major landowners were the first to be converted to Christianity. This meant that Christianity could spread more quickly. Landowners were also able to provide the money necessary to build church buildings. A common effect of this was that the body of the church was repaired and maintained by the people but the Chancel was repaired by Rector at his expense, this being his part of the building. To allow income for this the Rector was usually given land from which to draw and income and to provide money for repairs as and when they fell due.

Over time this land was sold to other purchasers for value and the repair liability passed with the land to the owners now known as 'Lay Rectors'. So this is where we are today.

Why has Chancel Repair Liability become and issue?

In 2003 the House of Lords held that despite the arcane nature of the liability and the law under which it was granted Aston Cantlow PCC was able to recover the liability from Mr and Mrs Wallbank, who owned a property that it was proved was liable for the charge. They could not rely on the Human Rights Act as the PCC was not a governmental or quasi-governmental body.

At the time of the judgment the then government decided that it could not cancel the liability in its entirety without paying significant compensation to the church. Therefore they create a register it or lose it provision to ensure that the issue would go away. As a result we have our October 2013 deadline.

What should PCCs do next?

It is essential that you make

1. Investigations of your old minute to ensure that you know the name of your parish in 1840

2. Obtain a copy of your Record of Ascertainment, Tithe Maps and any other relevant documents from the National Archive or County Records Office

3. Investigate whether the liability has been extinguished and if not what land has the liability and at what percentage.

4. Ensure that this Land is now identifiable

5. Obtain the appropriate forms for registration with the Land Registry

6. Seek detailed legal advice on the nature of the liability in relation to the land within the parish

You should also consider what impact this will have on the other roles that you have as a PCC.

If you have any issues in this regard please contact us on 01992 558411


Director Olive McCarthy qualifies as a Family Law Arbitrator

The Chartered Insitute of Arbitrators has awarded Olive McCarthy, a Director and Head of Private of Client with Breeze & Wyles Solicitors LLP, the certificate in Family Arbitration.
IFLA, a recently formed not for profit organisation, has been founded with involvement from the Chartered Institute of Arbitrators (CIArb), the Family Law Bar Association, and the family lawyers' group Resolution, in association with the Centre for Child and Family Law Reform. IFLA will govern and promote the scheme for family law arbitration in England and Wales, providing a new form of dispute resolution within family law.
A panel of experienced family lawyers have been trained as family arbitrators under the scheme and to date, the bespoke training course, which has been developed together with and delivered by CIArb, has attracted the retired judiciary and highly experienced specialist practitioners from across the country.
Arbitration under the scheme will be conducted under the family arbitration rules which have been developed by IFLA. This means disputing couples can agree to appoint their own arbitrator, or have the IFLA select one for them from its register of approved arbitrators.
The scheme covers: financial disputes arising from divorce; claims on inheritance from a child, spouse, etc; financial claims made in England and Wales after a divorce abroad; claims for child maintenance between unmarried parents; disputes about ownership of a property between cohabiting couples and civil partnership financial claims. Disputes will be resolved exclusively by applying the laws of this country, in the same way as the Family Courts.
IFLA developed the arbitration scheme to enable parties to resolve financial disputes more quickly, cheaply and in a more flexible and less formal setting than a court room. It is also expected to save court resources and reduce pressure on the already stretched family courts.
Parties and their advisers will be able to find further details of the scheme and how to start a family arbitration at www.ifla.org.uk.

Late payers strangling small companies

An interesting Telegraph article on the impact that increasing payment terms is having on SME' cash flow. Ensure that your business is chasing aged debtors immediately upon the expiry of your internal credit control function to a) increase your chances of a successful recovery and b) decrease the impact that locked up debtors have on your cash flow

Are you limiting your exposure to bad debt?

Cash flow remains a key concern for Companies with a number of Companies juggling their creditor’s demands for payment. Our experience is that the average number of days for payment of an invoice continues to increase which in turn is impacting on the health of creditors. If your aged debtor list is increasing or there is an extension in the average number of days for payment of your invoices, there are steps you can take to limit your exposure;
CAN YOUR ACCOUNT OPENING PROCESS BE IMPROVED?
 Ensuring that you have the correct information for a new client is vital to the efficiency of your internal credit control process. The most common errors that we find clients make is not correctly identifying the legal status of their client. e.g the account is opened in a debtors trading name and is it not known whether the client is a Limited Company or Partnership.
 Running a “financial health check” on your new customer is a key way to limit your exposure to bad debt. Without running a financial health check, it is impossible to assess the risks associated with offering credit terms to your customer. If you know that your new customer is high risk, you can take a view on whether you should either a) demand payment on Order or b) lower the credit limit applied to the account.
 We charge £10.00 plus VAT for a report on a Company or partnership’s financial health. This search is extremely cost effective when considering your increase in exposure to bad debt when trading blind with a new customer.
The report, which will be sent to you, will look at;
 The debtor’s “health rating”; whether the debtor is considered to be “high risk” in terms of their financial position or whether the debtor has a good trading history;
 The debtor’s trading address
 The debtor’s legal status
 Whether there are any CCJ’s against the debtor and whether these have been paid;
 The debtor’s last filed accounts including balance sheet (and any assets identified on the same)/ profit and loss accounts / cashflow and turnover (where such information has been filed with Companies House);
 Whether any petitions have been filed for the winding up of the debtor;
 The details of the debtor ‘s directors and shareholders (if a Limited Company)
CAN YOUR CREDIT CONTROL PROCESS BE IMPROVED?
 Being proactive in chasing your debtor is key for reducing the aged debtors list. This entails chasing your debtor as soon as the payment period expires and ensuring that a second and third chaser letter are sent at weekly, or fortnightly, intervals thereafter. Including at least one telephone call in to your internal credit control function will also assist to apply pressure to your debtor.
 Ensuring that your credit control team / management and sales team communicate is vital in limiting your exposure. If your credit control team is aware that a client is becoming slower in making payment, or failing to make payment altogether, a decision should be made immediately regarding whether to offer any further credit to the customer.
 Your exposure to a debtors insolvency increases significantly with the passage of time and therefore, instruct a Solicitor promptly upon the expiry of your credit control process.
Breeze and Wyles offer a low cost debt recovery service with our fees for chasing your debtor starting at £2.00 plus VAT for a Letter Before Action and depending on the amount of the debt, between £65.00 plus VAT and £170.00 plus VAT for issuing proceedings. Our fees are fixed allowing you the comfort of knowing the true cost of pursuing your debtor through the Courts.
If you would like further information regarding our debt recovery service, please contact our Rita Wright at rita.wright@breezeandwyles.co.uk or 01992 558411.
If you would like further information regarding our “health check” service, please contact our Maria Koureas-Jones at maria.koureas-jones@breezeandwyles.co.uk or 01992 558411. We charge £10.00 plus VAT for one off reports on a customer but can offer the service at a monthly cost where you wish to “health check” a number of customers each month.
© Breeze & Wyles LLP 2013


January Blues – Does every January need to be the same?

Most companies dread January – the lag from the end of year VAT payment, the Christmas shutdown, the post Christmas reduction in spending and the approaching tax deadline all make this period a testing time for cashflow.
Most companies focus all efforts on sales or start to consider reducing overheads. Is there an alternative for making this period a little more manageable?
Actively managing your debtors is one way to improve cash flow long term. Locked up aged debtors can have a material impact on cash flow and the longer a Company leaves it before chasing debtors, the less likely it is that it will recover the monies that are locked up.
The result of not actively chasing your debtors? What appears to be a mammoth/costly and unproductive task – chasing aged debtors when the likely recovery is unknown – add in to the equation Solicitors charging you on an hourly rate to chase these debts – and a Company will often leave the cash flow locked in an aged debtor list through fear of throwing limited funds after “potentially” recovering bad.
So...does every January need to the same? The answer is quite simply no.
• If you have an aged debtor list - chase all of those on it. Use a cost effective Solicitor to assist you with this exercise - Breeze and Wyles will charge you £2.00 plus VAT for chasing a debtor. At this price, can you afford not to?
• Improve your account opening process so that you have the information you need to properly chase a debtor.
• Implement a proactive credit control function – 1st / 2nd / 3rd letters to your debtors at 14 / 30 and 45 days will help limit those that become “aged” however, a telephone call during this period will help further to increase the chances of payment. The telephone call will also help you identify potential “problem debtors”.
• Instruct Solicitors to send a 7 day letter to your debtor as soon as you have exhausted your credit control system – continuing to apply pressure to your debtor will improve your chances of recovery.
For further information about how you can improve your internal credit control or for information about our easy to use and low cost debt recovery service, please contact Maria Koureas-Jones on maria.koureas-jones@breezeandwyles.co.uk / 01992 558411.


Exploiting Overseas Market: a Beginners Guide

Why trade internationally?
With more companies looking at growth overseas this is the key question to ask at the outset. Typically, the answer will probably be to either, increase revenues and profitability, and/or to improve utilisation of resources.
However, there are other more specific reasons why it makes sense to develop your business overseas, including:
• Your domestic market may not provide you with the opportunity for growth that your company needs
• You may be looking for the increased security your company can achieve by spreading its risks over a variety of markets
• You may want to ensure that you stay competitive by winning and retaining market share over other overseas competitors.
One major benefit of trading internationally is that it provides scope to develop your company's strengths and abilities. Selling in an international environment will sharpen your innovative edge and open up opportunities that might never come your way if you limit yourself to the home market. Of course, for some companies these opportunities fall on them by chance; perhaps a chance contact or a reference by a third party or affiliated company. It could also be because a major customer of yours moves into a new overseas market and you follow.
Another reason to look at overseas markets is if political environments change such as trade barriers are removed or new legislation makes your product or service a necessity. Exchange rates could be a driver to start exporting. Currently, the competitive exchange rate of the pound is beneficial for UK exporters.
Some facts and figures
Recent research found that:
• 59% of companies found that overseas business led to fresh ideas and innovation, upgrading their products and services.
• 44% of firms reported a link between exporting and increased turnover in 2011.
• 44% of firms said exporting significantly improved their profile or credibility.
How do I develop my international business?
Pat Smith Partnership Manager: "The first step, if you are in Bedfordshire, Cambridgeshire, Essex, Hertfordshire, Norfolk and Suffolk is to talk to UKTI East by calling 0845 641 9955. Elsewhere you may call this number and be directed to your regional UKTI office. They will arrange for an International Trade Adviser to contact you and meet up to discuss the opportunities and how best to start.
Typically, they will help you:
• Assess your company’s readiness to export in terms of your capabilities, resources and commitment
• Evaluate the market opportunities and help identify customers and distribution channels
• Work with you to develop an export strategy and then help you to implement the strategy.
Some of the first questions that need to be answered include:
• Do I have the capacity to export?
• What is my USP (Unique Selling Point) and does it work in overseas markets?
• Is there a market for my services? If there is, what is the size of the market, who are my competitors and how to I access the market?
• Am I price competitive?
• Do I need overseas representation and what form should it take?
• What are my liabilities post sale, are there legal constraints, how do I deal in a foreign currency?
• Do I have the trained staff; do I understand the cultural implications of selling to overseas customer?
Your International Trade Adviser will be able to help answer all of these and other questions."
What other support is available?
Your International Trade Adviser can tell you about a wide range of UKTI provided services, grants and support available. These include:
• Passport to Export – Through our Passport to Export programme we offer new and inexperienced exporters capability assessments, support in visiting potential markets, mentoring from a local International Trade Adviser, action plans, customised and subsidised training, and ongoing support once you're up and running. The programme puts together in one simple responsive process all the tools that exporting companies need to grow their business.
• Gateway to Global Growth – helps existing exporters with expert help and strategic advice to review and maximise their international strategy, explore new markets and achieve your international ambitions.
• Overseas Market Introduction Service (or OMIS) – helps you explore new overseas markets with the help of British Embassy Commercial staff around the world. Tap into the local knowledge of industry and country experts to help explore the market, establish contacts with potential customers/agents and even host meetings and events at embassies or consulates.
• Export Marketing Research Scheme – helps British companies research overseas markets prior to entry. Receive grants for up to 50% of your market research costs
• Export Communications Review – helps review your marketing and other communications to ensure it fits with the intended overseas country taking into account different languages, cultures and regulations.
For further information: Call 08456 419 955 or Visit www.ukti.gov.uk .