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Latest Articles

Are you eligible to claim more on your Monarch flights?

Are you eligible to claim more on your Monarch flights?

When it was announced in October that Monarch Airlines had been placed into administration it left 110,000 customers stranded abroad and some 300,000 future bookings cancelled with no option to be rescheduled.

In my Passle ‘Claiming your money back after a Monarch cancellation’, I mentioned under a Section 75 claim you are able to claim against the defaulting party (Monarch) or your bank/credit card. A section 75 claim allows you to claim for your direct losses and any associated damages (as long as they are reasonable).

Banks and credit card companies are moving ahead with these claims and paying the damages that have been incurred. A partner here at Glaisyers was a Monarch customer who had his flight cancelled. After going through his credit card’s claims process the card company has refunded the entire cost of the new flights he had to book – the cost of the original flight (that he cannot take following the insolvency) and the additional cost incurred for having to buy a replacement flight with a different carrier.

If you have any questions about your claim or if you’re eligible to claim for additional costs, give us a call.

Employment Seminar - Autumn 2017

Employment Seminar - Autumn 2017

9th November, 2017 | Glaisyers Office

Our Breakfast Seminar is suitable for business owners, directors, HR managers and other individuals responsible for handling HR matters within their organisation.

Our seminar on the 9th November will cover a number of different topics, including:

  • General Data Protection Regulation (GDPR)
  • Dismissal for personal messages sent at work
  • Can disciplinary suspensions amount to a breach of trust and confidence?
  • Abolition of employment tribunal fees – what are the implications for employers?

Coffee and breakfast will be served from 8:30am with the presentation running from 8:45am until 10:30am.

Our solicitors will be on hand to help answer any questions you may have in relation to the forthcoming changes and any other employment law queries you may have.

Want to attend?
The free event can be booked here - Register Now - by going to our event registration page.

Do you have any questions you would like to ask the Employment Team? Please email [email protected] or [email protected] and they will be happy to help.

Please book early to avoid disappointment.

Personal Liability of Directors - Lunch Seminar

Personal Liability of Directors - Lunch Seminar

As a director your duties and responsibilities reach beyond regular day-to-day business activity. You are legally responsible for the company's actions and have obligations and duties that extend beyond those of a normal employee. Glaisyers is hosting a lunch seminar from 11 am to 1 pm on Thursday, 19 October, specifically for directors, to help you understand the extent you are personally liable.

Nick Johnson, Russell Brown and Julian Bond, all partners at Glaisyers, will be leading the seminar, giving presentations and holding discussion groups, to cover all facets of personal liability of directors.

Topics will include:

  • What are your duties as a director?
  • When are directors personally liable?
  • Director disqualification
  • What you need to know about director service agreements

 

  

Pregnant workers – when do they qualify for protection?

Pregnant workers – when do they qualify for protection?

Under the EU Pregnant Workers Directive (“PWD”), pregnant workers are protected from dismissal from the beginning of pregnancy to the end of maternity leave. The legislation defines a pregnant worker as someone who has told their employer they are pregnant. In the UK the Equality Act 2010 prohibits pregnancy and maternity discrimination during the “protected period” which starts at the beginning of pregnancy and ends when the worker returns to work following maternity leave.
A recent Spanish case has raised some interesting questions about whether a pregnant worker could qualify for protection before their employer even knows they are pregnant.

Facts

Ms Guisado worked for a Spanish bank. The bank embarked on a collective redundancy process and as a result of this Ms Guisado was dismissed. At the time of her selection for dismissal she was pregnant, but the Bank was unaware of her pregnancy. She issued proceedings in the Spanish court challenging her dismissal. Her claim was initially rejected so she appealed to the High Court of Catalonia. In considering her claim the court referred a number of questions to the European Court of Justice including whether it was possible for a worker to qualify for protection under the PWD when they have not yet told their employer they are pregnant. The court also raised a number of other questions relating to the PWD and in particular whether it requires pregnant workers to be given priority for retention in collective redundancy situations.

Advocate General’s opinion

Advocate General (AG) Sharpston delivered her opinion earlier this month. In considering the questions posed by the Spanish court she highlighted a tension within the PWD on the basis it provides for protection from the beginning of pregnancy but only defines a pregnant worker as someone who has informed their employer that they are pregnant. In her opinion this could be resolved either in favour of the employer (by making it clear that workers are only protected once they have told their employer) or in favour of pregnant workers (giving protection from the beginning of pregnancy).
AG Sharpston was mindful of the purpose of the PWD and the protection pregnant women need within the workplace. In view of this she felt the PWD should protect women from the beginning of pregnancy. She did acknowledge the difficulties this approach could expose employers to but seemed satisfied that they would have the chance to rectify any potentially unfair and/or discriminatory dismissal by reinstating that person or reopening the dismissal process.
In terms of priority for retention, AG Sharpston made it clear that in her view the PWD does not impose an absolute obligation on employers to retain pregnant workers but rather the employer must be able to demonstrate that there is no plausible possibility of reassigning them to another suitable post. This mirrors the position in the UK where pregnant workers are given priority in relation to any suitable alternatives when the redundancy arises during their maternity leave but do not qualify for the same priority when pregnant.

Comment

Whilst the AG’s opinion is not binding on the ECJ it is persuasive and therefore UK employers are likely to await the ECJ’s decision with interest. Should the court follow her opinion it will raise some potentially difficult issues for employers who may find themselves inadvertently dismissing an employee who it later transpires was pregnant. The AG has suggested that employers should not be too concerned about this on the basis they would have the chance to remedy any damage by reinstating the worker or going back though the dismissal procedure taking in to account the individual’s pregnancy. She also made the point that workers would be under a duty to notify their employer of their pregnancy without unreasonable delay. Whilst I think this approach is sound in principle, it fails to take in to account the disruption this would cause to an employer’s business and the time it would take to reopen any dismissal proceedings. It seems unfair to expose employers to this risk and is at odds with the approach currently taken in the UK where women don’t benefit from statutory protection until they have notified their employer of their pregnancy. What’s more it may also lead to dispute as to what amounts to unreasonable delay and evidencing when an individual actually found out they were pregnant.

What are the benefits to SMEs of having a trusted solicitor on hand?

What are the benefits to SMEs of having a trusted solicitor on hand?

For small to medium-sized enterprises (SMEs), having an in-house team of legal experts and advisors on hand to guide through whenever issues arise isn't always a cost-effective option. However, that doesn't mean you have to be without that all important safety blanket for when a legal issue arises.

Many SMEs strike up a relationship with an independent firm of solicitors whose advice can be trusted and called upon at important moments, saving them money in long-run.

Here's a look at some of the key benefits of having a quality solicitors firm you can trust on hand as an SME.

Peace of mind

Operating a successful SME is never likely to be easy regardless of the industry you're in or what the aims are for your organisation. Therefore, there will always be plenty to focus on and no shortage of strategic matters and day-to-day issues to attend to as an SME boss.

Having a good relationship with a firm of solicitors means that an SME and its leadership team in particular can be confident that they're well placed to deal with any legal issues that might come along. This in turn means that company directors and managers can remain focussed on doing what they do best rather than concerning themselves with potential legal wrangling or the details of specific legislation.

Knowledge and experience

Perhaps the most fundamental reason why it can be so beneficial for an SME to have a working relationship and a good understand with a solicitors firm is the knowledge and expertise that they can bring to bear.
A quality solicitors firm which gears its services specifically towards meeting the needs of SMEs will always have a wealth of relevant expertise and experience to draw upon in the interest of its clients. This knowledge can be absolutely invaluable in any number of different scenarios for small and medium-sized enterprises in any sector.

Cost savings

Another good reason to work closely with a quality firm of solicitors is that doing so could save your business considerable sums of money. A lot of what solicitors firms are able to do for their clients is help them avoid unnecessary costs and liabilities. Indeed, they are exceptionally well positioned to do so.

So, while it may sometimes seem in the short term as if working with a firm of SME-specialist solicitors could be an unnecessary expense, in the longer term it is very likely to prove cost-effective.

An extra edge

Every business is unique and the best solicitors understand that very clearly and they work consistently to help ensure that their clients get all the advice and support they need from a legal perspective.

In the end, all of these issues boil down to competitiveness, and working with high calibre legal experts is always likely to make any SME more competitive and better able to maintain positive progress as they rise to the challenges of operating in their particular industry.

Dress codes: What your business needs to know...

Dress codes: What your business needs to know...

There's been a lot about dress codes in the press recently; with leaked emails from the BBC revealing strict requirements about the appearance of its newsreaders, and a city receptionist sent home for refusing to wear high heels. Most recently Goldman Sachs has announced its decision to relax its dress code to allow certain employees to wear casual clothes throughout the year.

The policy will apply to the bank's technology and engineering staff and is designed to help them attract the best new IT and technology talent. Many businesses in the technology sector, such as Google, already allow their workers to dress casually and Goldman Sachs' decision reflects its desire to compete.

The move within professional services organisations to allow staff to ‘dress down' on certain days is also indicative of the wider trend towards more modern working practices. Employers are beginning to realise that people are just as productive, if not more, when they are comfortable and relaxed at work.

One has to question why Goldman Sachs has only relaxed the dress code for its technology and engineering staff. It is perhaps a missed opportunity not to roll the policy out across the board, particularly given the decision of a number of rival banks to introduce more casual dress codes. It seems to me if Goldman Sachs wants to be able to attract the best it is going to need to move with the times. Imposing unnecessarily strict dress codes is likely to prove a turn off to both new talent as well as existing staff. Allowing individuals the opportunity to express themselves can boost staff morale, which not only helps to increase productivity but also makes the workplace more attractive.

Employers sometimes underestimate the value employees attach to workplace issues like dress codes. It's therefore essential that organisations take time to speak to staff about their dress code, take on board any concerns, and ensure that everyone understands non-compliance is a disciplinary matter.

Whatever dress code an employer seeks to implement they need to keep potential discrimination issues in mind and ensure that their requirements are proportionate to their aim.

  • Employers do not have to apply the same requirements to men and women, provided the rules are no more stringent for one sex than the other. For example, in the professional services sector is it not uncommon for employers to specify that men must wear a suit and tie while the rules for women may state formal business attire. In that situation, while the rules differ between men and women this is unlikely to be discriminatory as it sets the same overall standard of dress.
  • Workplace dress codes remain a tricky area to navigate with regards to religious beliefs. In one European Court of Justice case the employer (G4S) had an internal rule prohibiting employees from wearing any visible signs of their political, religious or philosophical beliefs. The ECJ ruled the ban was not directly discriminatory as it applies to any manifestation of religious beliefs and therefore treats all employees in the same way. It could, however, amount to indirect discrimination, although the court considered G4S' aim of projecting a neutral image to be potentially legitimate. However, any attempt by an employer to single out the headscarf would be both directly and indirectly discriminatory.
  • In some situations employers will be able to prevent employees from wearing religious and cultural dress where it represents a health and safety risk and/or presents security issues if it makes it hard to verify someone's identity.
  • Whatever dress code you introduce it needs to be consistent, with a justifiable reason why it is there - for example because of health and safety reasons, because the job role requires it, or to project a certain image.

While most employees will accept that dressing a certain way for work is part of the job there will always be some that push back. If this happens and an employee isn't following the dress code first discuss the issue with them in private and allow them to explain their point of view. If this isn't sufficient they should be given time to comply before disciplinary action is considered. If they raise legitimate concerns about the policy you should take the time to consider the nature of their complaint before deciding on the appropriate action.

Right to paid annual leave - can workers can leave over where they have been denied the right to take it?

Right to paid annual leave - can workers can leave over where they have been denied the right to take it?

Background

The Working Time Directive (WTD) provides for all EU workers to receive at least 4 weeks paid annual leave a year. The WTD was incorporated in to UK law by the Working Time Regulations 1998 (WTR). The WTR provide for workers to receive 5.6 weeks paid leave.

Following a number of high profile cases both in the UK and European Court of Justice (ECJ), it is now well established that workers who are unable or unwilling to take annual leave because of sickness absence have the right to take that leave at a later stage even if that means carrying it over in to a new leave year. Workers are entitled to receive a payment in lieu on termination in respect of any accrued leave that has been carried over as a result of sick leave. But what happens if someone has not taken all or some of their annual leave because they would not have been paid for it?

Facts of the case

Mr King started work for The Sash Window Company in 1999. He was a commission-only salesman which meant he did not receive any salary, paid holidays or paid sickness absence. In 2008 the Company offered him the opportunity to become an employee. Mr King elected to remain self-employed. He was subsequently dismissed by the Company in 2012 when he turned 65. Mr King issued proceedings for age discrimination and unpaid holiday pay by way of an unlawful deduction from wages claim. He argued that he had not taken his full holiday entitlement in any holiday year as it would have been unpaid.

The Tribunal & Employment Appeal Tribunal (EAT) decisions

The Tribunal upheld Mr King's age discrimination complaint. They also upheld his claim for unpaid holiday pay in respect of the following:

  1. Pay in lieu of accrued untaken leave from the current leave year;
  2. Leave requested and taken in previous years; and
  3. Pay in lieu of accrued untaken leave from previous years.

The Company appealed the Tribunal's decision in relation to (3) on the basis they maintained that Mr King had not been prevented from taking his annual leave, unlike those on sick leave, and therefore he had no entitlement to payment for leave accrued but untaken. The EAT upheld the Company's appeal and Mr King appealed the decision to the Court of Appeal.

European Court of Justice (ECJ) - Advocate General's opinion

In considering his case the Court of Appeal referred a number of questions to the ECJ. In essence the Court of Appeal wanted to know whether Mr King should be paid in lieu in respect of all accrued but untaken holiday for the duration of his employment or whether he could only claim for unpaid leave he had actually taken.

In accordance with standard ECJ practice, the Advocate General (AG) has considered these issues and delivered his opinion. As far as the AG is concerned, it would be incompatible with EU law to require a worker to take leave first before being able to establish whether he is entitled to be paid for it. In his opinion, employers are obliged to provide adequate facilities to enable workers to exercise their right to paid annual leave. As a result, if a worker does not take all or some of the annual leave they are entitled to, in circumstances where they would have done so had the employer agreed to pay them, they can claim payment in respect of that leave. As for how far back those claims can go, the AG has confirmed that the right to carry over accrued untaken leave continues indefinitely unless and until workers have the ability to take paid leave. In the circumstances, if someone has never been given this opportunity they would be entitled to a payment in lieu to cover the full period of employment.

Sarah Scholfield comments:

Whilst the ECJ does not always follow the opinion of the AG in most cases it does. Should it do so here, the decision could have wide ranging implications for employers, particularly those in the gig economy. Employers in this sector tend to use a lot of casual workers and these individuals may never have taken any annual leave in the mistaken belief they are not entitled to it. As a result, employers could face claims from these individuals for back dated holiday pay going back over several years which may put some businesses in severe financial difficulty. In the circumstances, we await the ECJ's decision with interest.

GDPR: What businesses should be aware of...

GDPR: What businesses should be aware of...

The GDPR changes all small businesses need to be aware of by Sarah Scholfield, solicitor at Manchester based Glaisyers

When it comes come into effect on 25th May 2018, the General Data Protection Regulation (GDPR) will turn many organisations upside down as they struggle to bring themselves up to the standard required by the new regulation. Particularly as new research shows that a worrying 84% of UK small business owners (in addition to 43% of senior executives of large companies) are currently unaware of the forthcoming changes.

What is the regulation?

The result of four years of planning amongst EU member states and other interested parties, the GDPR is intended to bring greater strength and consistency to the protection of all EU citizens from privacy and data breaches.

Currently, EU data protection laws stem from the Data Protection Directive which was implemented in different ways by EU member states back in 1995. In the UK, the Directive lead to the introduction of the Data Protection Act 1995 (DPA). However, difficulties have arisen over the years as a result of the differing approaches adopted by each member state, and rapid developments in technology. The GDPR is designed to both update and harmonise the legal framework across the EU. The Government have been clear that the UK's exit from the EU will have no impact on the introduction of the GDPR.

What will this mean for small businesses?

Those businesses who already have solid data protection and privacy processes in place are unlikely to see significant changes under the GDPR. For example, the concept of data controllers (who control how and why data is processed) and data processors (who act on behalf of the controller) will remain similar. Likewise, the definitions of personal data and sensitive personal data will see only extensions in the definitions to include things like online identifiers (e.g. IP addresses).

However, that said, there are some important changes small businesses need to be aware of prior to the GDPR's introduction next year.

  • One of the most important relates to the issue of consent. Under the DPA, one of the grounds on which businesses can rely to justify processing personal data is consent. At the moment, we operate a system of presumed consent in relation to personal data with individuals being given the opportunity to opt out of any processing of their personal data. Explicit consent is only necessary for sensitive personal data. Under the GDPR however, organisations will need to obtain express consent to the processing of any personal data, effectively requiring data subjects to actively opt in. This means pre-ticked boxes; silence or inactivity will not suffice.
  • The GDPR will introduce a strict data breach notification process which will require businesses to report any breach within 72 hours unless the breach is unlikely to result in risk to the individual(s) concerned.
  • There will also be changes made to the subject access request (SAR) regime. Under the DPA organisations can charge £10 for responding to a request and have 40 days in which to respond. Under the GDPR, generally organisations will be unable to charge and the timeframe will be reduced to one month.
  • The GDPR will also see a marked increase in potential fines which, along with strict deadlines which attach to certain obligations under the GDPR relating to reporting breaches and responding to SARs, is likely to surprise small business owners. Under the DPA, a data controller or data processor can be fined up to £500,000 in respect of any breach. Fines under the GDPR however will be based on a two-tier system with businesses being fined up to either 2% of worldwide turnover or 10 million euros (whichever is the greatest) or 4% of worldwide turnover or 20 million euros (whichever is the greatest). The level of fine will depend on the nature of the breach.
  • The GDPR will give individuals the right to ask businesses to delete their personal data in certain circumstances, for example asking a search engine provider to remove results that are outdated or irrelevant. This is known as the right to erasure or the right to be forgotten. However, it is not currently clear how this right will work in practice as it could present significant difficulties for some businesses.

How can small businesses prepare?

The first thing businesses need to be doing is disseminating information about the GDPR among their senior decision makers. It is essential people are aware of the key changes in advance of the new regime which may mean providing additional training where necessary.

In brief, businesses should:

  • Audit and document the personal data they currently hold, making a note of where it came from and who they currently share the information with.
  • Review their current privacy notices. The GDPR requires businesses to include certain additional information in their notices including, for example, the data subjects' right to complain to the Information Commissioners Office (ICO). The ICO has published a Code of Practice which sets out the new requirements.
  • If a business relies on consent, they should review how they obtain and record that consent. Under the new regime businesses will need to be able to demonstrate that consent has been freely given which will require them to produce clear records.
  • Consider how they will report any data breaches to ensure they meet the strict 72-hour deadline. Businesses should think about putting in place a clear notification procedure so individuals within the organisation know how to report any breach.
  • Depending on their size and administrative resource, businesses should consider appointing a specialised Data Protection Officer to take responsibility for compliance and circulate the message with the rest of the business. In some circumstances, this will be mandatory.
  • In terms of SARs, the GDPR vastly decreases the amount of time organisations have to respond. In view of this, businesses should review their processes now to ensure they will be able to respond to requests within the new one month timeframe.
  • Consider whether it is even necessary to process personal data. If so, consider anonymising the data reducing the businesses exposure to the GDPR.

With less than a year to go, it's crucial that all businesses begin to take a proactive approach in preparing for the forthcoming GDPR, now.

Failure to pay enhanced shared parental pay - an act of discrimination?

Failure to pay enhanced shared parental pay - an act of discrimination?

The Shared Parental Leave regulations came in to effect in April 2015 and are designed to give parents the freedom to share up to 50 weeks leave and 37 weeks' pay.

The Regulations do not require employers who offer enhanced maternity packages to match those for anyone taking shared parental leave. Notwithstanding that however, there has been some uncertainty about whether an employer's failure to do so could amount to an act of direct or indirect discrimination against men.

The Tribunal has recently had to grapple with this issue in Ali v Capita Customer Management Limited.

Facts of the case

Mr Ali's employment transferred to Capita from Telefonica in 2013 as part of a TUPE transfer. In February 2016 his daughter was born. He took two weeks paid paternity leave immediately following the birth. He notified his manager during his paternity leave that his wife had been diagnosed with post-natal depression. He returned to work after his paternity leave but subsequently made a request to take time off to care for his daughter as his wife had been advised by her doctor to return to work for health reasons. Mr Ali was told by Capita that whilst he would be eligible for shared parental leave he would only receive statutory shared parental pay.

Mr Ali challenged the decision on the basis he was aware that female employees who transferred to Capita from Telefonica at the same time as him were entitled to 14 weeks' basic pay followed by 25 weeks statutory maternity pay. He raised a formal grievance alleging sex discrimination. His grievance was rejected by Capita and he subsequently issued proceedings in the employment tribunal for direct and indirect sex discrimination and victimisation.

In relation to his direct discrimination claim, Mr Ali accepted that there was a material difference in circumstances between himself and a hypothetical female employee during the first 2 weeks of compulsory maternity leave. In this regard he recognised that this time is unique to women as it relates to a mother's biological and physiological condition and recovery following childbirth. Following that 2 week period however he did not accept that a women should be afforded any special treatment on the basis both men and women will be performing the same role from that point onwards i.e. caring for a newborn baby. In view of this he argued that he should be entitled to the same pay as a woman would receive in that situation i.e. full pay for 12 weeks. He wanted to take 12 weeks off to look after his daughter but he was deterred from doing so because he would only receive statutory pay and not full pay for that leave.

Capita argued that Mr Ali could not compare himself to a female transferred Telefonica employee because he has not given birth and therefore is not entitled to maternity leave or pay. They also argued that the right to 14 weeks full pay whilst on maternity leave was special treatment in connection with childbirth and therefore should be reserved exclusively for women to ensure they were not disadvantaged by giving birth or taking maternity leave.

Decision of the Tribunal

The Tribunal upheld Mr Ali's claim of direct sex discrimination. They were satisfied that he could compare his treatment with a hypothetical female comparator after the two week period of compulsory leave. Having done so, Capita's decision to only pay him statutory pay for the 12 week period rather than full pay amounted to an act of direct sex discrimination.

The Tribunal rejected Capita's argument that women ought to receive special treatment for the full 14 week period and made it clear that any special treatment connected with childbirth should be limited to the 2 weeks after birth.

Mr Ali's claim of indirect discrimination was rejected by the Tribunal on the basis it relied on Telefonica's maternity policy which by definition was not gender neutral. As such, they could not consider an indirect discrimination complaint.

Comment

At first glance the decision in Ali is likely to worry employers who offer enhanced maternity pay packages to female employees. Do these employers now need to mirror those arrangements for individuals taking shared parental leave and pay? The answer at the moment is probably not as this is only a first instance decision and is therefore not binding on other tribunals. We understand Capita are looking to appeal the decision and therefore it would be sensible to await the outcome of any appeal before taking any decisive action. If the decision is upheld however then it would have potentially far reaching consequences for employers who would have to review their current arrangements to minimise the risk of any potential discrimination complaints.

Russell Brown featured today on Lawyer Monthly

Russell Brown featured today on Lawyer Monthly

As negotiations are underway, are we looking towards a soft Brexit or a hard Brexit? How will each pan out for various UK sectors? How will they impact the pound and the economy? How will small businesses be affected? And though we've already seen a glimpse via the proposed bills in the Queen's speech, what will our new laws look like?

Russell Brown, partner and head of employment, comments:

While it could be argued that the recent election result diminishes the likelihood of a hard Brexit, the reality is that the Government is holding its cards very close to its chest. We will only really start to get an idea of how things will progress now that negotiations with Europe have started; and let's not forget these could last for up to two years.

Last week's proposals regarding EU citizens being allowed to remain in the UK is the first tangible sign of there being some attempt to negotiate a soft Brexit, by which I mean a willingness to retain some formal links with the continent. From an employment lawyer's perspective, there was a clear statement by all parties during the election that employment rights derived from the EU will effectively remain untouched. This leaves the door open to continued trading links with Europe, in the same way that it applies to EEA nations and Switzerland.

One of the main issues is going to be the so-called Brexit bill. This has such a major significance for both parties that it is likely to impact on all other aspects of the negotiations, particularly where liability is likely to lie in relation to long term commitments, such as pensions and loan guarantees, and the EU's claims that we should continue to pay into the Brussels budget for two years after our departure from Europe.

What will the future hold for business? While many small companies perceive a reduction in red tape, those who manufacture and export to Europe will be concerned about the potential loss of access to the single market. There are also concerns about the impact of Brexit on lenders; given that access to finance is vital to growing businesses, this will be of particular concern if interest rates rise. If we face inflation due to a lowering value of the pound, banks may raise interest rates which could lead to creating negative equity for property owners. A decrease in property values will also be a concern to many, meaning they put future acquisitions and associated job offers on hold.

Read the full article on Lawyer Monthly

Why does it take so long to complete a property purchase?

Why does it take so long to complete a property purchase?

The process of buying a property generally takes weeks and not days because there will almost always be a variety of different variables and details involved that need to be carefully addressed by solicitors.

For anyone buying a new property all this can be frustrating but solicitors have an obligation to ensure that all the relevant transactions involved are handled properly and in a way that doesn't lead to legal headaches for their clients further down the line.

The process of buying a house, the legal side of which is called conveyancing, typically takes between 6 and 8 weeks in the UK. But for anyone eager for the process to complete it may well seem like a whole lot longer.

So, why does conveyancing take so long? Here's our look at some of the potential reasons why a property purchase may be delayed.

Sellers delaying surveys

Any offer of a mortgage deal given to a potential buyer of a property is contingent on the valuation of the property. Sometimes the process of carrying out this survey is delayed by the selling party and that can put the whole transaction on hold.

In many cases, a buyer will wish to have the property they're intending to buy surveyed thoroughly via a full-scale building survey so that they can be more confident of knowing exactly what they're buying. This process doesn't usually take long but if the seller doesn't make the necessary arrangements quickly enough then this can delay the progress of whatever deal is in the offing.

Long chains can leave everyone waiting

In a situation whereby a chain of residential property transactions develops and they become effectively interlocking, suddenly there is potential for even the smallest of hold ups anywhere in the chain to significantly hinder the progress of every other deal in the chain. One can only go as fast as the slowest party in the chain.

Your seller's solicitor could be slow to reply

Conveyancing generally involves two sets of solicitors communicating with one another about the details of a potential deal. Usually solicitors acting on behalf of a buyer will contact the solicitors representing the relevant seller to make a variety of enquiries. Response times in these scenarios vary and delays are not uncommon.

Third party documents can take time to retrieve

There can be various reasons why your solicitor, if you're intending to buy a particular property, will need to track down relevant legal documents from third parties before they can proceed any further on your behalf. This might be in relation to planning permissions, for example, or because the property involved is leasehold and information is required of the freeholder. All this can take time, increase costs and hold up the process of completing a purchase.

All which means that when you ask your conveyancing solicitor how long your property buying process might take - the truth is that they won't really know until they tackle all the issues involved and overcome whatever potential hold ups they find along the way.

One thing we can assure you is that all the conveyancing staff at Glaisyers are committed to completing matters as speedily and efficiently as possible.

Stamp Duty Land Tax (SDLT) Avoidance Schemes

Stamp Duty Land Tax (SDLT) Avoidance Schemes

Stamp Duty Land Tax (SDLT) Avoidance Schemes have returned to the headlines recently following the sanctioning of a Surrey law firm for its involvement in the avoidance scheme.

The implication often is that they are available to everybody, that most people make use of them and thus avoid paying Stamp Duty land Tax. Nothing could be further from the truth.

If you are a non-UK domiciliaries worth millions buying a property for multi-millions then one or more of these schemes may be something you are prepared to go along with.

In our experience, and we have been advising many clients buying for over £1m, the conclusion has been that they are not worth it. The purpose of this little note is not to go into the ins and outs of how the schemes work but to simply point out that they are verging on tax evasion which is illegal, rather than tax avoidance, which isn't. Not only that but if you are buying a property and obtaining a mortgage, your mortgagee i.e. the Bank or Building Society lending you the money, will flatly refuse to do so if you are trying to avoid paying legitimate taxes to the Revenue. If you look at the major Banks who have been bailed
out by the Government this is entirely understandable.

A simple example, if you are buying a property at £1.2m you will have to pay £63,750 in SDLT. A significant amount of money. If you go along with one of the schemes you might on paper save 50% of that. The other 50% you will pay in fees. There are no guarantees that the scheme will work and you may have to wait up to 6 years before you can sleep soundly at night. At any
time within those 6 years you can and probably will be the subject of a Revenue investigation. If the Revenue take you to Court you would have to fund the litigation. This could be really expensive and is not for the faint hearted.

If you lose you will end up having to pay the original £63,750 you should have paid, a penalty of the same amount i.e. another £63,750 and interest. You also face the prospect of the costs of the exercise and possibly criminal proceedings. Bearing in mind that you will then have paid £31,875 to the clever so and so's who devised the scheme, now long gone, and you will
bitterly regret that you ever bothered to do it.

For more information or a no obligation chat contact our Conveyancing Team.

Court of Appeal gives clarity on modern day "equity of exoneration"

Court of Appeal gives clarity on modern day "equity of exoneration"

In the first case in over 100 years, the Court of Appeal has provided clarity on the proper approach to the equity of exoneration in the context of a “modern” co-habiting couple.

The legal concept "equity of exoneration" typically applies in respect of co-owners of a property - commonly family homes. It arises where one co-owner uses that property to secure a debt for their sole benefit. The other co-owner may be entitled to a charge over the other owners interest in the property, to the extent that debts are paid out of their own share.

The case of Armstrong v Onyearu [2017] EWCA Civ 268 is the first case to be heard by the Court of Appeal in 100 years (since Paget v Paget [1898] 1 Ch 470.) The Court has clarified the proper approach to the equity of exoneration in the context of a “modern” co-habiting couple and effect of the non-bankrupt spouse receiving an indirect, as opposed to a direct benefit from such borrowings.

Mr and Mrs Onyearu are a married couple and Mr Onyearu was the sole registered proprietor of the matrimonial home. Prior to his bankruptcy Mr Onyearu took out a secured loan against the property which he used to meet his business liabilities he incurred as a sole practicing solicitor. On an application brought by the Trustee for sale of the property Mrs Onyearu obtained from the court a declaration that they jointly owned the beneficial interest in the property.

The charge in relation to the business borrowings exhausted Mr Onyearu's beneficial interest in the property. The issue before the Court of Appeal was whether Mrs Onyearu received a direct or indirect benefit from her husband's business borrowings that would entitle Mr Onyearu's Trustee in Bankruptcy to draw on Mrs Onyearu's share of the property to equally discharge her husband's business borrowings from her beneficial interest in the property.

The Trustee in Bankruptcy brought the appeal on the basis that Mr and Mrs Onyearu were a co-habiting couple, the loan taken out by Mr Onyearu indirectly benefited Mrs Onyearu in that the secured loan not only allowed her husband's business to continue it enabled her husband to continue contributing to the mortgage repayments.

The evidence before the court was that Mr and Mrs Onyearu had not operated as a single unit financially; they had kept their finances separate and shared the family expenses. The Court of Appeal dismissed the Trustee's application finding that an indirect benefit of the type relied on was far from certain to accrue. Furthermore, the benefit was too remote and incapable of valuation. If Mrs Onyearu was unable to rely on the equity of exoneration she would not just be paying her share of the expenses but also her husband's and this did not accord with the notions of equity.

Comment

Armstrong v Onyearu provides a useful review of the equity of exoneration principle and although it has not been properly considered by the Court of Appeal since 1898, it does appear alive and well.

Whether the equity is available to the non-bankrupt spouse will turn on the individual facts of each case. A full investigation into how the family operate their finances must be undertaken by the practitioner. Is the Bankrupt the sole source of income for the family? If not, how much does the non-bankrupt spouse contribute? Do the parties operate as a single unit financially or are their finances kept separate and the family expenses shared?

Carrying out a full investigation and answering such questions will assist practitioners to evaluate a non-bankrupt spouse's claim. A view can then be taken by the practitioner whether it is right, in all of the circumstances of the case, to recalculate the parties' respective beneficial interest in the jointly owned family home.

If you require any legal advice in relation to bankruptcy or insolvency, our experts are on hand to speak to you.

Property market asking prices 'fell in June for the first time since 2009'

Property market asking prices 'fell in June for the first time since 2009'

Average asking prices for residential properties fell during June of this year for the first time since 2009.

June is usually a month in which property buying activity increases across the UK but a variety of different dynamics have apparently dampened the market in recent weeks, according to the property website Rightmove.

Concerns around political uncertainty, inflationary pressures and a restraining of wage growth across the country are understood to have contributed to a relative lack of activity in the residential property market.

Rightmove's latest figures relate to activity in the weeks prior to the general election on June 8th and apparently showed a drop of 0.4 per cent in average asking prices nationwide in early June.

The same figure for May increased by 1.2 per cent and asking prices haven't fallen in the month of June since 2009, during what was a particularly turbulent time for the UK's housing markets.

“The price of property coming to the market had increased in June in every year since 2009, so buyers' confidence has clearly been affected by inflation outstripping their pay packets and current political events,” said Rightmove director Miles Shipside in a statement.

The UK's headline rate of inflation increased to 2.9 per cent in May, which put that figure at a new four-year high, with households increasingly seeing their personal finances squeezed and their potential spending power diminished as a result.

Despite the nationwide average asking price for residential properties having fallen during June, prices in most parts of England and Wales were actually found to be still rising.

The numbers for the country as a whole from Rightmove are down due to particularly sharp declines in asking prices in London, where there was a 2.4 per cent fall in June, and in other parts of central and south east England.

Potentially worrying indicators emerged from the Bank of England's monetary policy committee (MPC) in recent days, with several of its members having voted in June to introduce a rise in the base rate of interest.

A majority of MPC members voted to maintain the cost of borrowing at its current historic low but, with three members voting for an increase, their vote on the subject this month was the closest it has been since 2007.

FAQs - Wills

FAQs - Wills

Why do I need a Will?

If you don't have a Will, most of your assets will pass under the intestacy rules. This means that you have no choice in how they will be distributed when you die. The intestacy rules do not allow cohabitees to inherit automatically. If you are separated but not divorced your spouse might still inherit so that the person that you most want to leave your money to could get nothing, and the person who you wanted out of your life could get everything. Making a Will is a way of ensuring that the people you love are still taken care of, even when you're not longer around to do it.

What are the intestacy rules?

These rules govern the distribution of a deceased's estate, if they died without making a Will. Depending on the size of the estate, the assets might pass to a surviving spouse or civil partner. If the estate is over a certain value, there will be some distribution to children too.

If there is no surviving spouse or civil partner but the deceased left children, the estate will be distributed between them, subject to certain conditions.

If the deceased left no children the money will pass to blood relatives, starting with parents, siblings, grandparents, then uncles or aunts. Eventually, if no living relatives can be found the assets will pass to the state. See our “Guide to

Probate” for more detailed guidance on distribution without a Will.

No consideration will be given to a co-habitee under the intestacy rules, no matter how long they have lived with the deceased. This is why it is so important to leave a Will; make sure your assets go where you want them to, be it to a co-habitee, friend or charity.

I've seen the term “Legacy” used in a friend's Will. What does this mean?

A legacy is a specific gift left within a Will to a person or charity. The gift is usually an amount of money or personal items.

What is meant by the residue of an estate?

Once any funeral costs, taxes, other debts, legacies and the costs of administering your estate have been paid, the remaining assets are referred to as the residue of your estate.

What is a mirror Will and is this different to a mutual Will?

A mirror Will is a Will which reflects the terms of another person's Will. They are commonly used by spouses, civil partners, cohabitees and business partners. The difference between a mirror Will and a mutual Will is that a person with a mirror Will is free to change the terms at any time. However, a mutual Will cannot generally be changed without the agreement of both people, so when the first person dies the surviving person cannot change their own will.

Can anybody witness my Will?

A Will has to be witnessed by two independent people aged over 18. This means that for the Will to be valid, it cannot be witnessed by a person to inherit under it as a beneficiary. There are no conditions as to the professions of any witnesses or the length of time that they have known you.

What is an Executor?

An Executor is the person named in a Will who will deal with the possessions, money and property of the deceased and ensure that they are distributed in accordance with the person's wishes. The Executor has legal responsibility for administering the estate correctly. It is common for an Executor who was a friend or family member of the deceased to seek the assistance of a solicitor when administering an estate.

Can I appoint somebody specific to look after my children if I die?

Within a Will, it is possible to name a Guardian/Guardians to look after children under the age of 18, should both parents die before their children reach this age. Subject to the willingness of the proposed Guardians and safeguards put in place by social services, these nominations will be usually allow the guardians to look after the children.

Where is the best place to keep my Will?

A Will can be stored anywhere as long as the Executors named within it know where it is. If we have helped you to draft your Will then we will store it free of charge in our secure storage facility until it is required. If another solicitor has been involved in drafting the Will, check with them whether they provide this facility.

Q. Can I change my Will if I want to?

Yes. If there is a simple addition or amendment that needs making to a Will, this can be done by way of a Codicil, which is a simple document that will be read along with the Will after you die. In some circumstances though, it is easier to redraft the Will completely, which can be done, as long as the new Will contains a clause revoking any wills you have made in the past. If you want to change your Will, call us to discuss your options.

Why would I need to use a Solicitor to draft my Will when I could write it myself or use one of the templates available from the supermarket?

A Will can be drafted by anybody but it is important to remember that a Will is always subject to challenge. A template or an online form can't tell you if you have made a mistake, or give you advice about claims other people could make against your estate.

There are several ways that a Will could be contested: a badly drafted clause can be open to interpretation and the person who wrote the will is not going to be around to help solve any arguments; somebody who has been left out of the Will could argue that it was made under duress by the actual beneficiary; and worst of all, one slight drafting error or a mistake when it is signed could lead to the Will being completely invalid. By using a Solicitor you get the benefit of advice and expertise when the will is prepared. Spending a little bit of extra money now could save your loved ones limitless time and expense in the future.

General Election 2017: Employment law and the main manifestos

General Election 2017: Employment law and the main manifestos

Unsure how the 2017 manifestos from Conservatives, Labour and Liberal Democrats fare against employment law issues? Read our brief guide to the key proposed changes.

With voting on the general election due to commence within the next 24 hours our thoughts are beginning to focus on the key issues which we consider to be of importance. Brexit and national security are sure to be high on most voters' list along with the usual issues such as healthcare, welfare, education, housing and the environment. With the exception of those of us who deal with it on a day to day basis however, employment law doesn't appear to feature too highly in the top concerns of most voters according to the final Ipsos MORI/Economist Issues Index prior to the general election based on fieldwork carried out between the 5th and 15th May.

For those of you who do consider it an important issue, here is our brief guide to the key employment law issues contained within the main parties' manifestos.

Conservatives

In a speech on 15th May, Theresa May stated that her party's manifesto would include the “greatest expansion in workers' rights by any Conservative government in history” which some claim isn't saying much. Furthermore in her Article 50 letter to the European Union she said existing workers' rights would be “built on”. So what are the Conservatives proposing?

As things stand there are no plans to repeal any workers' rights derived from EU law following Brexit. The National Living Wage will continue to increase aiming to reach 60% of median earnings by 2020 and then increase in line with median earnings until 2022. The review of employment practices in the modern economy led by Matthew Taylor will continue and its conclusions acted upon with the aim of protecting the rights of workers and employees including those working in the gig economy.

There will be a right to take leave for training purposes and a right to child bereavement leave the proposed duration of which is as of yet unknown. There are also proposals to introduce extended leave to allow workers to take unpaid leave to take care of sick relatives (believed to be between 13 and 52 weeks). The manifesto also refers to Returnship programmes aimed at helping those such as women and carers to return to work following time out from work by providing skills training and experience.

There are proposals to introduce mandatory reporting requirements similar to those currently in place for gender pay gap purposes in order to minimise pay disparities between people from different ethnic backgrounds referred to as Race pay gap reporting.

In terms of worker representation at board level, listed companies will face measures aimed at improving worker representation on boards (this will not necessarily involve appointing worker representatives to the board) and allow workers to request (currently unspecified) information relating to the future direction of the company employing them.

The Equality Act 2010 will be amended to provide disability protection to those suffering from “episodic and fluctuating” mental health conditions such as stress, anxiety and bipolar disorder. There are also plans to offer incentives to employers in the form of 1 years' relief on NIC's where employing certain classes of vulnerable worker such as former wards of the care system, those with chronic mental health problems or those who have committed a crime but served their sentence.

Lastly, the Immigration Skills Charge levied on those businesses employing migrant workers will increase from £1000 to £2000 per year.

Labour

“For the Many not the Few” contains a 20 point “plan for security and equality at work”. We would see a new Ministry of Labour, strengthening of the role of unions, along with proposals to tackle pay inequality, Brexit and zero hours work. Under a Labour government some of the changes would include the following.

The Ministry of Labour will be in charge of enforcing workers' rights and will have the ability to impose fines on employers who are not “meeting their responsibilities” with trade unions having an executive seat on the board of the Ministry. Additional Trade Union rights will include giving all workers the right to receive union representation, all unions being guaranteed access to the workplace to speak to current and recruit new members, only awarding public contracts to employers that recognise unions in the workplace and launching a public inquiry into the blacklisting of union members.

Following Brexit all rights guaranteed under EU law will be protected. There are plans to ban zero hours contracts and ensure that every worker receives a guaranteed number of hours a week. It is proposed to give all workers equal rights from day one, regardless of their employment status. There will be four additional bank holidays granted to commemorate St George's, St Andrew's, St David's and St Patrick's Days.

In terms of National Minimum Wage there will be a crackdown on employers who refuse to pay it and there are plans to increase the NMW to the level of the National Living Wage (for all workers aged 18 or over) which is expected to be at least £10 per hour from 2020. There will be an increase in the scope of the current 30 hours free childcare to include all 2 year olds, mandatory workplace risk assessments for pregnant women, an increase to the rate of paternity pay and double paternity leave to 4 weeks, an extension of maternity pay to 12 months. There are also plans to introduce a statutory right to bereavement leave.

There will also be an abolishment of Employment Tribunal fees aimed at allowing more workers access to enforcing their employment rights. There are plans to introduce legislation to limit employers that have an overseas only recruitment policy and a stronger emphasis on Apprenticeships which are considered to be “the most effective way of meeting our growing skills gap”. From an equality perspective there are plans to make it easier for disabled workers to challenge discrimination at work, to strengthen protections from women against the threat of unfair redundancy, reinstate protection against third party harassment, a civil enforcement system to ensure compliance with gender pay gap reporting, the introduction of equal pay audits on larger employers in order to close the ethnicity pay gap. There are also plans to ensure that those bidding for public-sector contracts must not have a pay ratio between the highest and lowest earners which exceeds 20:1.

Liberal Democrats

The key employment law related policies contained within Change Britain's Future consist of the following.

Employment Tribunal fees would be abolished. As far as Brexit is concerned there is a pledge to remain in the single market which would mean workers' EU rights would remain unchanged. In terms of discrimination there is an aspiration to achieve 40% female boards in FTSE 350 companies, plans to build on the existing gender pay gap rules to include the publication of data in relation to gender, ethnicity and LGBT employment levels and pay gaps, a guarantee of freedom to wear religious or cultural dress and attempts to encourage name blind recruitment processes in the private sector.

In terms of working families there are proposals to make flexible working, paternity leave and shared parental leave day one rights, the introduction of an additional months' “use it or lose it” period of shared parental leave for fathers and an extension of the 15 hours a week childcare to all 2 year olds and children of working families from the end of maternity/paternity/shared parental leave, with a long term goal of increasing children to 30 hours a week.

The manifesto promises to ban zero hours contracts and give workers a statutory right to request a fixed term contract.

In addition to the above there are proposals to create a “good employer” kitemark which would be obtained by paying the National Living Wage, avoiding unpaid internships and using name blind recruitment processes.

Sleep in shifts: do employers need to wake up to new thinking?

Sleep in shifts: do employers need to wake up to new thinking?

Sarah Scholfield, employment solicitor at Glaisyers Solicitors LLP, takes a look at the recent EAT cases about night shift workers and explains what employers need to know.

Under the National Minimum Wage Regulations (NMW), employees are entitled to be paid the NMW for any time spent working. In most jobs, it is easy to identify any periods of work for which individuals ought to be paid at least the NMW. In some roles however, this issue is far from straight forward and particular difficulties have arisen in relation to workers who are required to complete “sleep-in” shifts, whereby they are on-call for the duration of the shift and sleep either on site or at a place close to work in order to carry out duties if called upon.

Sleep-in at shifts generally fall within one of the following categories:

  • The worker is on-call away from home with no sleeping facilities provided by the employer;
  • The worker is on-call at or near work with sleeping facilities;
  • The worker is on-call at home.

The question of whether these workers should be paid the NMW depends on whether the worker is actually working or simply available for work. If they are working all the time spent on the sleep-in shift must be counted in any NMW calculation. If they are simply available for work they are only entitled to the NMW for any time spent working during the shift. Whilst this may seem straightforward, the courts and tribunals have struggled to clearly identify what constitutes work during a sleep-in shift which has led to a great deal of uncertainty in this area.

Making headlines

The Employment Appeals Tribunal (EAT) has recently had to grapple with the issue of sleep-in shifts in three joined appeals which considered whether night shift workers who complete sleep in shifts are entitled to the NMW for their whole shift, or just the time they spend awake carrying out duties.

In the case of Focus Care Agency v Roberts, Mr Roberts was employed by Focus Care Agency to carry out “sleep-in” night shifts. During these, he was required to assist with any emergency that might arise but was not required to be awake. He was provided with sleeping facilities and received an allowance of £25 per night for each sleep-in shift completed.

Following his dismissal Mr Roberts claimed that the whole of the time he spent on sleep-in shifts was work time and therefore he had been entitled to the national minimum wage for these shifts. He issued proceedings to recover the shortfall in his pay by way of an unlawful deduction from wages claim.

Mrs Tomlinson-Blake was employed by Mencap as a care support worker (Royal Mencap Society v Tomlinson-Blake). She was required to work dayshifts, morning shifts and sleep-in shifts. Dayshifts and morning shifts were part of her salaried hours and she was paid accordingly. She received a flat rate of £22.35 together with one hour's pay for any sleep-in shifts. When on a sleep-in shift she had to remain at the property to keep an ‘ear out' in case her support was needed. She had her own bedroom and was expected to intervene to deal with incidents that required her assistance or to respond to requests for help. Over the preceding 16 month period she had only been called upon to help on six occasions.

In the case of Mr & Mrs Frudd v The Partington Group Limited, the Frudds were jointly appointed as receptionist and warden at a caravan park. They were required to reside on the premises in a caravan and were “on call” overnight to respond to any emergencies or enquiries. When they were on call they had a mobile phone and pager to receive calls. If they were called out they received a payment of £8.50.

The EAT confirmed that both Mr Roberts and Mrs Tomlinson-Blake were performing time work throughout their sleep-in shifts and therefore should have received the NMW for the whole of each shift. However, they did not accept Mr and Mrs Frudd's claim and made it clear that they were only doing time work while actually working as they were at home at all other times when on call.

No one-size-fits-all answer

The judge in these cases made it clear that it was not possible to give a straight ‘yes' or ‘no' answer to the question of whether sleep-in shifts amount to time work. Instead he confirmed that a multi-factorial approach is required and that every case must be considered on its own facts. He went on to suggest some potentially relevant factors to consider:

  • The employer's particular purpose in engaging the worker e.g. if the employer is subject to a regulatory requirement to have someone present.
  • The extent to which the worker's activities are restricted by the requirement to be present and at the disposal of the employer e.g. would the worker be disciplined for leaving the premises.
  • The degree of responsibility undertaken by the worker.
  • The immediacy of the requirement to provide services if something untoward occurs or an emergency arises.

With the continued lack of clarity in the law and frequent difficulty in establishing whether someone is working or merely available for work, it is highly likely this will be an area of further litigation.

Care providers must review working practices to make sure they don't fall foul of the law

Employers in the care sector reliant on public-sector contracts already face ever-tightening budgets and the prospect of paying sleep-in workers NMW for the entire “sleep-in” period may leave some in financial difficulties. That said, employers who fail to do so can face not only criminal sanctions and tribunal litigation from disgruntled ex- and current workers but also serious reputational damage.

Given the recent announcement of an increase in the maximum penalty for failing to pay the NMW from £5,000 to an expected £20,000, and the new policy of naming and shaming businesses that breach their obligations, it is therefore more important than ever for care providers to review and possibly change working practices to make sure they don't fall foul of the law.

The latest insights from the experts at Glaisyers Solicitors

The latest insights from the experts at Glaisyers Solicitors

Welcome to the May 2017 round-up from our experts and though leaders here at Glaisyers Solicitors, with latest news and unique insight from across the team.

Jackson wary of fixed costs - James Parr

Jackson LJ's latest position on the proposed extension of fixed costs is surprising, given the fact that it scarcely seems that long since his initial suggestion that fixed costs should be extended across the broad spectrum of Multi-Track… Read more.

Progress for families of missing persons - Chris Burrows

The Guardianship (Missing Persons) Act 2017 has received Royal Assent, bringing the families of missing persons one step closer to achieving control over the missing person's financial affairs.The Act which is expected to come into force in 2018… Read more.

Stage 1 Costs and the ‘£400 Club' - James Parr

In a rare piece of good news for Claimant personal injury lawyers, the Court of Appeal in J C and A Solicitors Ltd v Andeen Iqbal & Another [2017] EWCA Civ 355 ruled there was no pre-action protocol or the Civil Procedure Rules for repayment of… Read more.

More uncertainty for Moorside nuclear power plant - Hannah Robinson

More uncertainty has dogged the plans for the construction of the Moorside power plant in Cumbria as National Grid have announced they are “pausing” their construction plans which would carry out the necessary infrastructure work while Toshiba… Read more.

Precedent R discussion reports - A useful Precedent or procedural hoop? - Nick Mercer

By now, parties engaging in Civil Litigation should be familiar with Precedent H Costs Budgets and, more recently, preparation of Precedent R discussion reports. If utilised correctly, Precedent H together with Precedent R can be a somewhat… Read more

Proposals to double the length of paid paternity leave - will it make any difference? - Sarah Scholfield

The Liberal Democrats have announced plans to double working fathers' entitlement to paid paternity leave from 2 weeks to 4 weeks ahead of the general election next month. According to the Liberal Democrat's, an increase in paid paternity leave… Read more

Fixed fees and the access to justice debate - Michael Fletcher

John Hyde of the Gazette makes valuable points. Addressing the NHS legal spend should not be done at the expense of genuine Claimants who may be unable to find lawyers willing to act under a fixed fee regime; or more likely will have to suffer a… Read more.

The Costs of Moving and Financial assistance from Relatives - Cameron Bishop

When buying a house (particularly those looking to buy a house for the first time) it is worth factoring in all the actual and potential costs before embarking on probably the greatest financial outlay a buyer will make in his or her… Read more.

Brexit negotiations risk derailing nuclear industry - Hannah Robinson

Opinion is divided as to whether Brexit should also mean the loss of European Atomic Energy Community (EURATOM) membership. As the government's rhetoric edges towards harder and harder Brexit, EURATOM membership looks increasingly under threat…. Read more.

Gender Pay Gap Reporting website now live - Sarah Scholfield

The Government website on which gender pay gap reports have to be published has now gone live. To date, five employers have published their reports. Perhaps unsurprisingly when you take a closer look at those reports they reveal remarkably small,… Read more.

Probate fee increase rushed through ahead of general election - Chris Burrows

A controversial hike in probate fees has been rushed through the House of Commons as part of the legislative scramble before the general election. Only weeks ago a Commons committee warned that the Justice Secretary does not have the power to… Read more.

Protecting the Elderly - Nick Johnson

The elderly and their families need to be careful when taking steps to dispose of assets to avoid claims by Local Authorities for care.There is no simple answer, whether legally or what is in the best interest of the elderly parent. Always air on… Read more.

Half of all SMEs 'would not survive the loss of a key employee'

Half of all SMEs 'would not survive the loss of a key employee'

A majority of SMEs around the UK would not be able to survive if they were to lose a key employee for any reason.

That's according to a new study which suggests that most small or medium-sized businesses in Britain would close down within a year if a key figure within their organisation were to die or become seriously ill and unable to work.

The striking numbers come from the insurance giant Legal & General (L&G), which surveyed more than 800 people and found that new companies are particularly vulnerable to collapse after the loss of a key contributor.

Worryingly, the proportion of SMEs which would be likely to fail if they lost an important employee is reportedly on the increase.

A full 13% more businesses indicated to L&G that they would be unable to carry on beyond a year if an important employee were to leave unexpectedly for any reason in 2017 than was the case in 2015.

Other findings from L&G's recent research suggest that almost two-thirds (65%) of all SMEs across the UK have some form of business debt, which is a figure said to have increased by no less than 33% since 2011.

According to L&G's latest numbers, the average borrowing level of a British SME now sits at close to £176,000, with 19% of the companies polled saying that they have borrowed in excess of £50,000 via credit cards.

A further 19% of respondents to the L&G survey said that they've used personal loans to support their businesses.

Richard Kateley, head of intermediary development at L&G said:

“SMEs form the backbone of Britain's economy and are a vital source of employment for millions of people. Yet as our research shows, a significant proportion of these businesses across the UK are leaving themselves at risk from critical events.”

“The fundamentals of Britain's economy might be strong, but there should be concerns over what would happen if these businesses were unable to pay their debts in the face of a financial shock such as losing a key person or business owner.”

Russell Brown, Head of Employment at Glaisyers solicitors added:

“Obviously employees leave for various reasons, whether it be a different challenge, more money or ill health, to name a few. Where the decision comes as a shock to an employer, one of the first things that tends to go through their mind is how long can they retain that individual's services for in order to find a replacement and carry out an effective handover of their work to another trusted member of staff and, quite often, how can I stop them harming my business (where they are going to a competitor)?

These are matters which can be relatively easily addressed by having a suitably worded employment contract in place. This is the point in time at which contracts come into play. Quite often, both employers and employees do not attach enough importance to a contract of employment at the start of their relationship because they don't envisage what could go wrong in the future. Appropriate provisions relating to notice, the ability to place on garden leave, restricting an individual's activities and access to confidential information during their notice and limitations on what they can do once they have left your employment are all issues which can and ought to be addressed in the contracts for your key employees”.

UK's construction sector output 'accelerating at fastest pace this year'

UK's construction sector output 'accelerating at fastest pace this year'

Overall output within the UK's construction sector accelerated at the fastest pace so far this year during April, according to the latest figures on the subject.

Data collected by researchers at IHS Markit suggests that businesses within the industry saw an upturn in new work last month and enough encouragement on the whole to increase rates of job creation.

Civil engineering activity was cited as being the best-performing sub-category of the construction sector during April, with the rate of expansion there apparently at levels not seen since March 2016.

Meanwhile, there was also improved performance and output levels in the context of residential house building, with growth there higher in April than at any point yet this year.

“April's survey reveals a positive start to the second quarter of 2017, with a robust upturn in civil engineering activity helping to boost the construction industry,” said Tim Moore, IHS Markit's senior economist.

“There were also more encouraging signs from the house building sector, as growth recovered to its strongest so far this year.”

Despite the apparent causes for optimism within the UK's construction sector, there remain various potential sources of concern as well, not least input cost inflation, which continues to rise.

Although, IHS Markit's latest report notes that the relative recovery of the value of the pound in recent weeks may be going some way towards limiting the impact of cost inflation on construction companies across the UK.

According to latest figures, employment growth among construction firms increased during April at its fastest pace since May 2016 but businesses in the sector have expressed concern at a lack of supply of highly-skilled professionals and sub-contractors.

This issue “must be addressed if the future strength of the sector is to be assured,” said Duncan Brock, from the Chartered Institute of Procurement & Supply, in a statement.

“The sector has proven to be resilient, so the UK government must take extra steps to ensure the general election does not knock the sector back into a period of uncertainty and uneven progression, as seen during the referendum months,” Mr Brock added.

SMEs worried by potential loss of EU workers post Brexit

SMEs worried by potential loss of EU workers post Brexit

Small and medium-sized enterprises (SMEs) who employ workers from different parts of the European Union are worried about the potential skills gap they'll be left with after the UK departs from the EU.

That's according to a poll by the Federation of Small Businesses (FSB), which suggests that a majority (59%) of British SMEs with EU workers are concerned that they might struggle to recruit people with the skills they need once the so-called Brexit process has been fully undertaken.

Around 54% are also concerned that a lack of access to EU employees could hinder their efforts to pursue growth in the coming years, according to the FSB.

Partly with the findings of its own research in mind, the FSB is urging the government's policymakers to guarantee as soon as possible that businesses in the UK will still be able to employ EU citizens once the Brexit process is complete.

The organisation's investigations also found that the average British SME wants a period of three years to address whatever issues arise in the context of employment and potential skills shortages once the UK leaves the EU.

“There is real concern among small firms with EU staff that they will lose access to the skills and labour their business needs to survive and grow,” said Mike Cherry, the FSB's national chairman. “EU workers are a vital part of our economy, helping to plug chronic skills gaps across a wide range of sectors, and filling jobs in an already tight labour market.

“From packers, to mechanics, to graphic designers, small employers need to be able to hire the right person, for the right job at the right time,” he said.

The FSB has also recently suggested that a sudden loss of funding from the EU to small businesses in all parts of Britain could lead to some significant financial challenges for operators within the UK's SME sector over the course the coming years.

“If the next government is serious about developing an Industrial Strategy that delivers prosperity… it must replace EU funding dedicated to small business support and access to finance after we leave the EU,” said Mike Cherry in a recent statement on that subject.

Nick Johnson, Managing Partner at Glaisyers commented:

“The handling of the Brexit negotiations will involve preserving what is best of the EU. While there was talk of closing our borders to immigration we need to handle this carefully whereby we are able to attract talent from abroad as well as attract labour where we have a shortage. Small businesses do not want to be in a position where they lose a large pool of European labour and therefore restrict their choice. Small businesses need to be able to be flexible and to draw upon labour quickly.”

A Guide to Gender Pay Gap Reporting

A Guide to Gender Pay Gap Reporting

By April 2018 all organisations with over 250 employees will have to report publicly on any average pay difference between male and female employees. Whilst this may seem like a long way off employers need to act now to ensure they are ready for this change.

Our guide explains all you need to know about the regulation and how we can help you prepare, review and report on gender pay gaps in your business. Read the full guide

Personal injury rule changes blamed for Direct Line's insurance policy price hike

Personal injury rule changes blamed for Direct Line's insurance policy price hike

Changes to laws around personal injury and compensation for accidents has seemingly prompted the insurance firm Direct Line to increase the price of its policies by almost 7% in the early months of this year.

Insurers were taken by surprise in February when the government announced that it would cut the discount rate via which calculations are made to decide what scale of pay outs should be made to people who suffer severe injuries as a result of road accidents.

The change, introduced by the Ministry of Justice (MoJ), was not welcomed by the country's leading car insurance companies and was widely expected to lead to increases in premiums being paid by consumers throughout the country.

Despite insisting that the change to the discount rate would not have major implications, Direct Line increased its car insurance premiums by close to 7% in the first three months of 2017 as compared with the same period of the previous year.

The discount rate, otherwise known as the Ogden Rate, is the fundamental mechanism used by the courts to decide precisely how much money should be paid to car insurance policy holders who suffer severe and life-changing injuries in road accidents.

Changes to the rate were apparently made in light of the fact that recipients of a lump sum from insurance companies can no longer expect to accrue interest amounts at the same pace as they would have done in the past because interest rates today are so much lower than they once were.

The MoJ has said that “the law makes clear that claimants must be treated as risk averse investors, reflecting the fact that they are financially dependent on this lump sum, often for long periods or the duration of their life”.

“Compensation awards using the rate should put the claimant in the same financial position had they not been injured, including loss of future earnings and care costs,” the MoJ's statements on the subject went on.

In March of this year, Direct Line reported a £175 million profit fall for its full financial year, with the changes to the discount rate handed much of the blame for that downturn in performance.

However, statements made at the time by the Direct Line Group insisted that its business remains well-placed in what it described as being a “market disrupted by the reduction in the discount rate”.

Maintenance - Is it for Life?

Maintenance - Is it for Life?

This is a very topical headline as our daily newspapers recently carried reference to a Court of Appeal Judgment and a comment made by Lord Justice Pitchford which seems to have resulted in much public furore. The papers have interpreted the judicial comments, in such a way, as they were calling for a change to the Law.

The report is of course very fact specific. The case involved a challenge by Tracey Wright, the former wife of a racehorse trainer, Ian Wright, to a decision which would see her future maintenance significantly reduced.

The parties had separated in 2006. The then family home had been ordered to be sold and the net proceeds of sale had been divided equally. This had allowed Mrs Wright to purchase a property in her own name for £450,000 free of mortgage. Mrs Wright and the two children of the family had continued to live in that property. As part of the original divorce Court Order, Mr Wright had been ordered to pay maintenance of £75,000 per annum, of which £33,200 per annum was spousal support for Mrs Wright alone.

In 2014, the former husband applied to the Court to reduce spousal maintenance because he was concerned at aged 59, that the sums involved would be unaffordable upon his retirement. The initial decision of the Court was that the spousal maintenance payments would ultimately cease, subject to a tailing off over a five year period leading up to Mr Wright's retirement. The Court made it clear that there was no good reason for Mrs Wright not to seek work following separation, particularly when she had a good earning capacity with easily identifiable job qualifications.

Mrs Wright was unhappy with the original Order and appealed. Lord Justice Pitchford's comments were blunt to say the least. He very much emphasised the need that Mrs Wright should simply ‘get on with it' and seek a job like numerous numbers of other women with children.

The newspapers have seen this decision as very much ground breaking. In actual fact, it is a move towards what the Statute had always intended, which is to encourage spouses - generally women - towards financial independence. However, women with children at school still need childcare and that is often going to cost more than ever a mother can earn if she were to go out to work.

The major legislation in this area of Law is the Matrimonial Causes Act 1973. This Act of Parliament, although somewhat elderly now, has kept up to date thanks to subsequent cases and there was always emphasis within the original wording of the legislation requiring the Court to look at whether it was possible for there to be a clean break as part of a financial deal between divorcing parties.

Usually, when advising parties in a divorce settlement, it is essential that you identify heads of claim and, in particular, whether it is possible for an additional lump sum payment to be made in lieu of ongoing maintenance. This is often a difficult ask, as there is insufficient liquidity to buy off a competing spouse's claims. However, in certain circumstances, a spouse - usually a husband - is very keen to effect that clean break, particularly if he envisages that his business will go from strength to strength and he would be reluctant to then deal with his former spouse at a time when his wealth had increased considerably. In those circumstances, a husband often attempts to achieve that clean break, even if it is expensive for him in the short-term, as he will not face variations of maintenance claims by the former wife in future years. In addition, it avoids the need to deal with a once and for all capitalisation of a wife's monthly maintenance order which is possible under current legislation.

What is clear is that it is essential that specialist family law advice is sought. This will allow heads of a claim to be addressed at the earliest possible moment and for realistic budgets to be considered, which is much more likely to lead to an early financial settlement, rather than a polarisation of positions and inevitable bitter Court proceedings.

About the Author

Glaisyers Solicitors has built many strong relationships over the years. Elizabeth Hassall has specialised in family law for over 20 years and is consistently recognised as a leader in this field of law by both Chambers and Legal 500 Directories. If you'd like to speak to Elizabeth, please email [email protected]

Are you eligible to claim more on your Monarch flights?

When it was announced in October that Monarch Airlines had been placed into administration it left 110,000 customers stranded abroad and some 300,000 future bookings cancelled with no option to be rescheduled.

In my Passle ‘Claiming your money back after a Monarch cancellation’, I mentioned under a Section 75 claim you are able to claim against the defaulting party (Monarch) or your bank/credit card. A section 75 claim allows you to claim for your direct losses and any associated damages (as long as they are reasonable).

Banks and credit card companies are moving ahead with these claims and paying the damages that have been incurred. A partner here at Glaisyers was a Monarch customer who had his flight cancelled. After going through his credit card’s claims process the card company has refunded the entire cost of the new flights he had to book – the cost of the original flight (that he cannot take following the insolvency) and the additional cost incurred for having to buy a replacement flight with a different carrier.

If you have any questions about your claim or if you’re eligible to claim for additional costs, give us a call.

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