Insight Article Archives

Employers to pay apprenticeship levy

Posted on March 6, 2017 - 8:00 am by Penny Dewar

The apprenticeship levy will require all UK employers, in both the private and public sectors (with annual wage bills of more than £3m – including bonus and commission payments), to pay 0.5% of their annual wage bill towards the cost of apprenticeship training.

This cost cannot be passed onto the employee. However, because of the wage bill eligibility criteria, most employers will not have to pay any levy. It will continue to have government support to pay for apprenticeship training.

The levy itself is designed to fund new apprenticeships and replaces the current system whereby employers choose and pay for the apprenticeship training they want.

It aims to increase economic productivity by investing in human capital and allowing individuals to pursue a career they may not have otherwise.

The government expects that the levy will lead to increased growth and profitability for businesses and increase wages in the long term.

The levy is due to come into force in April 2017.

Employers starting an apprentice before April 2017 will receive funding under the current system. That funding will continue for the duration of the apprenticeship.

The reforms are intended to simplify some of the current complex arrangements for apprenticeships and make it easier for employers to select the apprenticeship training they want to purchase.

Each year employers will have a levy allowance of £15k. However, connected companies will only have £15k to share between them, for example, a parent company and its subsidiaries.

This is similar to the existing Employment Allowance connected persons’ rule and paid through the PAYE system. Employers already contributing to an industry-wide training levy (such as the Construction Industry Training Board Levy, the “CITB”) don’t get off the hook and will still pay a levy.

Once employers have paid the levy, they can access apprenticeship funding through a new service account. Funds in the account will pay for apprenticeship training and assessment with an approved provider/assessment organisation, and the government will top this amount up by 10%. Note: that if funds are not utilised within 24 months, they will expire.

Employers must retain all records relating to the levy calculation for at least three years.

Provisions have been put in place for assessments to be carried out by HMRC. Suppose HMRC becomes aware that the apprenticeship levy has been underpaid or that an excessive amount has been repaid. In that case, they can assess and collect the estimated amount due for one or more tax periods in a tax year. HMRC may assess the whole of the apprenticeship levy or one or more named employees.

The government has published useful guidance on how apprenticeship funding for employers will work, including details of funding bands and the apprenticeship levy at the gov.uk website.

Call Karen Cole today if you have Apprenticeship Levy queries.

Note: This is not legal advice; it is intended to provide information of general interest about current legal issues.

Unmarried couples need to protect themselves

Posted on February 27, 2017 - 2:21 pm by Penny Dewar

A landmark victory in the Supreme Court has seen a Northern Ireland woman win a share of her former partner’s pension, with commentators saying it’s likely to add impetus to the drive for greater rights for unmarried couples. But, in the meantime, cohabitees should face up and formalise arrangements rather than keeping their fingers crossed.

The victory of Denise Brewster involved her claim for a survivor’s pension after her long-term, live-in partner Lenny McMullan died suddenly, shortly after they had become engaged. He had paid into Northern Ireland’s local government pension scheme but had not completed the necessary form to nominate a cohabiting partner for a survivor’s pension. Denise Brewster took legal action to claim the pension, and when her case reached the Supreme Court, the judges ruled that refusing to pay her was unlawful.

Such difficulties play out all too often for cohabiting couples, whether in relation to shared property or what happens to their assets when they divorce or die. Many still believe in the idea of so-called ‘common law marriage’, assuming they have legal rights like married couples or civil partners on death, only to discover the harsh truth when problems arise.

Currently, securing protection requires action to be taken by the couple if they wish to ensure that the interests of both parties are protected in case of death, separation or other life changes.

Family lawyer Pippa Marshall said:

“It may seem unfair, but cohabiting couples do not have the protection that comes with marriage or civil partnership. There are three main areas where couples should look to protect themselves, and each other, and that’s with a cohabitation agreement, formalising how property is owned and each making a will. These all help to avoid uncertainty and come into their own if the worst happens.”

Making a Will

Head of Private Client, James McMullan, explains that without a valid Will, the Intestacy Rules will decide the division of assets belonging to a cohabitee. Under these rules, a cohabiting partner will not be included. Typically, the whole of their estate would go to children, or if they have none, to parents or other family members.

Infochart The Intestacy Rules 2023 Update

Although the surviving cohabitee could apply for “reasonable financial provision” under the Inheritance (Provision for Family and Dependants) Act 1975, this option would be very slow and potentially expensive. In the meantime, they may be blocked from living in the couple’s home if it is not held in shared ownership.

Inheritance Tax

Writing a Will is also a good time for couples to consider inheritance tax implications, as they will not benefit from the exemption given to gifts between spouses and civil partners. Also, unlike a married couple or civil partners, the first-to-die’s nil rate band cannot be transferred to the survivor.

Property Ownership

Regarding property ownership, our property partner, Ben Marks, reiterated that if a couple buys a property together or agrees, one has become entitled to a share. Ownership must be structured to reflect this and the intentions of each upon death. Such ownership must be formally documented and ideally recorded at the Land Registry. If the property is owned as ‘joint tenants’, there are two consequences:

the couple is electing not to own separately defined shares in the property, and if anything is done to bring the joint ownership to an end, the couple will own the property in equal shares.
Upon the death of one, the whole property will pass automatically to the other regardless of the intestacy rules or any Will.

If a property is owned as tenants in common, then each will own a specific share – which can be in any proportions, by any agreed calculation – and each is free to choose what will happen to their share of the property on death. This aspect should also be considered when a Will is written, as someone may wish to leave their share to children, but with the survivor having the right to continue living in the house until their death or relocation.

Cohabitation Agreements

Cohabitation Agreements are formal agreements outlining what will happen if a couple separates. Cohabitation agreements can also set out day-to-day matters, such as who is responsible for household expenditure and in what proportions. As well as helping to settle disputes when a relationship ends, by referring to the original intention, it can be useful to clarify matters before a couple moves in together by encouraging discussion and agreement over the details.

Cohabitation Agreements should be drawn as a deed, independently witnessed. For instance, both parties should demonstrate there was no duress by seeking independent legal advice. A cohabitation agreement may be set aside or varied by the courts if the circumstances change, for example, if the couple has children, so it is important to review what has been put in place regularly.

Speak to Pippa Marshall for more information on how unmarried couples can protect themselves.

Note: This is not legal advice; it provides information of general interest about current legal issues.

Intestacy Rules QR Code for online interative quiz

Employment Law: The Basics

Posted on February 20, 2017 - 8:15 pm by Penny Dewar

Always err on the side of caution, and when in doubt, consult a qualified lawyer before taking any action.

The basics:

Provide written employment contracts to all employees (tailor them to levels of seniority) and ensure your policies and procedures are contained in a staff handbook. Make sure both are regularly reviewed.
Have a social media policy with clear guidelines regarding what you consider acceptable behaviour regarding usage and content. Make it clear that unacceptable use of social media (whether professional or personal) could result in disciplinary action.
Proactively manage sickness absence. Keep detailed absence records and conduct return-to-work interviews after any period of absence. Consider whether the employee may be disabled.
Keep up to date with changes in employment law. You can regularly check the Advisory, Conciliation & Arbitration Service (ACAS) website.
Never hold a meeting with an employee (for whatever reason) without taking detailed conversation notes. Keep written records of any personnel matter.
Ensure employee appraisals/reviews are carried out and that they are accurate. It is easy to avoid difficult conversations about poor performance, but this only creates problems down the line. A fair performance management procedure should be implemented, and should it become necessary, it will assist with dismissal procedures further down the line.
Follow the ACAS Code of Practice on Disciplinary and Grievance Procedures, again found on the ACAS website. Any compensatory award made against you by the Employment Tribunal could be increased by 25% if you do not.
Understand what discrimination means and how to avoid it. Appreciate that this does not just apply to employees. Be aware of actions throughout the recruitment process and that you could be held responsible for the actions of third parties.
Do not initiate a without prejudice discussion or protected conversation with any employee without taking legal advice first.
Always seek legal advice if you are unsure. The right legal advice at the right time could prevent a hefty legal bill.

Call Karen Cole today to find out how the basics apply to you.

Note: This is not legal advice; it provides information of general interest about current legal issues.

Brand protection and your business

Posted on February 16, 2017 - 8:00 am by Penny Dewar

At the start of a venture, small business owners tend to focus on raising finance and securing clients in order to establish and grow their business. What is often not in such sharp focus is the intellectual property which arises out of the branding of the business: the name of a restaurant or a clothing label, for example. But brand protection is paramount.

This is understandable. At the outset, a business may have limited branding, and any intellectual property is likely to be of little material value, but business owners need to be aware that there are risks to this approach, which can have severe consequences once the business develops.

Protect your brand from the start

Put simply, if you do not protect the branding of your business, you risk competitors branding their business in a similar fashion, drawing away your clients and profits.

Successful businesses require a unique, established and recognisable brand and in order to achieve this, the necessary protection needs to be put in place. If your business is unable to deliver this, it could face real problems.

Imagine this scenario: you work tirelessly on your business for five years. You establish a client base and develop a recognisable brand only to find out that one of your competitors is using aspects of your branding to appeal to your customers. Not only could it be difficult to enforce your rights without any registered protection in place, the competitor could even have the ability to stop you from marketing your business in the way you want.

Trademarks

One way to protect against this is to register a trademark, which grants the holder the statutory right to use the mark exclusively in connection with the goods or services it is registered for. Trademarks prevent others from using identical or similar marks and shield your business from competitors seeking to imitate or reproduce your goods or services.

Trademark protection is most commonly applied to trading names, slogans, and logos. For example, the brand name Tesco and its slogan “Every Little Helps” and Nike with its “Swoosh” logo. The mere mention of those marks illustrates the point that businesses become synonymous with their trademarks.

Putting protection in place

Clearance searches

Before making an application to register a trademark, it is vital to undertake clearance searches to ensure no other marks may be infringed.

The process is made slightly more complex in that registered and unregistered trademarks may exist. This means that whilst some marks may be easily found on the Intellectual Property Office’s (IPO) database, other marks will be harder to find, meaning that all searches should be wide-ranging and should be undertaken with a high degree of care and attention.

If done properly, this process can yield unintended benefits, particularly when existing marks that are identical or similar to your own are found. Whilst this may be frustrating, it allows you to tweak the branding of your business, meaning that registration and protection are possible, and an expensive rebrand is not required at a later date under the threat of a third-party claim.

The simple act of undertaking searches early on can give your business a great head start.

Application

Once clearance searches have been performed, the trade mark registration application must be made to the IPO and assigned to a certain class.

There are 45 classes in total, each accounting for a particular sector in which goods and services are provided. It is important that your mark is classified appropriately, as this process will determine the extent of the protection afforded to the mark.

An application for protection in one class costs either the basic fee of £170 (plus £50 for each additional class) as a flat fee or the right start fee of £100 (plus £25 for each additional class) as an initial payment for the application to be reviewed by an IPO examiner, plus an additional fee of £100 (plus £25 for each additional class) should the applicant decide to proceed in light of the examiner’s report.

Post application

Once the application has been made, the IPO will provide an examination report within 20 days in which they can object to the application and provide an overview of any defects which the prospective mark may have. For example, a defect could be that the mark is too generic or that the mark is too similar to an existing mark.

You should seek legal advice throughout this period to ensure money is not wasted on unsuccessful applications.

The application can progress to the next stage if the IPO has no objections.

Publication

The application must be published in the trademarks journal two months before registration, during which time it can be opposed. The mark will be registered if no objections are raised during this period. If objections are raised, the party in opposition can issue one of two responses to the application:

Threatened response: In this case, the two-month period is extended by one month, and the parties negotiate on the registration of the mark. This negotiation can take many forms and could involve the opposing party asking the applicant to reduce the scope of the application. If negotiations are unsuccessful, the opposing party would need to decide whether to make a formal opposition.
Formal opposition: The opposing party formally opposes the application. Both parties would make representations to the independent body presiding over the dispute. It is more than likely that both parties would incur costs, and if the applicant loses, they may well be liable for their opponent’s fees.

Registration

If no objections are raised (or any objections raised are successfully resolved), the mark can proceed to the next stage and become formally registered.

The registration of the mark lasts for ten years and can be renewed for further periods of ten years (subject to the payment of renewal fees).

From the point of registration onwards, the proprietor gains a valuable and exploitable commercial asset. The business’ branding becomes much easier to protect, and a deterrent is put in place to prevent third parties from exploiting the goodwill of the business and potentially drawing customers away.

Speak to Veronica Hartley today about Brand Protection.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

What is General Data Protection Regulation?

Posted on January 24, 2017 - 11:08 am by Penny Dewar

The General Data Protection Regulation will apply in the UK from 25 May 2018. This is a significant change in data protection law, and businesses will need to invest time in preparing for the changes.

Yes. The government has confirmed that the UK’s decision to leave the EU will not affect the commencement of the General Data Protection Regulation.

To avoid being classified as inadequate in terms of the level of protection given to personal data, the UK must offer data protection standards that comply with EU requirements. A company outside the EU with operations in the EU must also comply.

The short answer is no.

Under the General Data Protection Regulation, consent must be given:

freely, i.e. not as part of the employment contract;
actively, i.e. not simply ‘by default’; and
it must be as easy to withdraw as to give.

As an employee cannot usually reject a clause in their employment contract, it is not (for GDPR purposes) considered to be ‘freely given’. Therefore, silence, pre-ticked boxes or inactivity cannot constitute consent as these do not allow the employee to say no to an aspect of the proposed processing.

However, the General Data Protection Regulation does allow employers to rely on alternative valid bases for processing personal data (other than just employee consent). For example, where an employer needs to process personal data to operate the payroll or the sick pay system. Employers can rely on the justification that such processing must happen for the employer to perform the employment contract.

A subject access request is a written request made by or on an individual’s behalf for the information he or she is entitled to ask for under section 7 of the Data Protection Act 1998.

In standard cases, the current 40-day time limit for responding to subject access requests will be reduced to one month, and the £10 fee will be revoked.

In complex cases, the one-month timeframe can be extended by a further two months, and provision will be made for a fee to be charged if the request is clearly unfounded or excessive.

The General Data Protection Regulation will extend the right of access to personal data. Employees will be entitled to more information about how their data is handled, who has access to it, how long it is held, etc. Therefore, employers should ensure that anyone appointed to handle subject access requests has received up-to-date training.

The General Data Protection Regulation affects the whole of the business, but from an HR angle, we would suggest the following steps are taken as part of the overall business preparations:

Audit HR data and data processes

Now is the time to assess what data is held by HR and how it is processed (who it is shared with and why?).

What data protection policies and procedures do you currently have, and are these working?

Are there any risk areas that need attention before the General Data Protection Regulation comes into force?

Audit your third-party processors

The General Data Protection Regulation increases employers’ obligations to ensure that their third-party data processors comply with data protection laws. The obvious ones here include external payroll providers and occupational health assessors.

You need to make sure that your contractual terms require third parties to comply with data protection laws in processing personal data about your workforce.

You should consider what steps you take to vet and check external service providers for compliance both prior to and during their appointment.

Ensure staff are trained appropriately

General data protection training is as important as ever. Those with specific data processing responsibilities should be given additional tailored training.

Move away from relying solely on employee consent to justify business-critical data processing.

Do you need to appoint a data protection officer?

The GDPR requires companies whose core activities consist of processing operations that require regular and systematic monitoring of data subjects on a large scale to appoint a data protection officer. This person must have expert knowledge of data protection law and practices, and their job will be to monitor internal compliance with the GDPR. Businesses that do not fall into this category may still wish to appoint someone to monitor data processing and keep a check on compliance.

If you’re concerned about the General Data Protection Regulation, speak to Karen Cole today.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Getting problem relationships through tinsel time

Posted on December 23, 2016 - 6:55 pm by Penny Dewar

According to the latest Office for National Statistics (ONS) figures, the overall divorce rates are continuing to fall. There were 111,169 divorces in 2014, a decrease of 3.1% compared with 2013 and 27% lower than 2003.

Compared with data from 2004, divorce rates were lower for all age groups except women aged 55 and over. As younger people look to have fewer problems in the first decade of marriage, ONS has attributed this to higher numbers of couples cohabitating before marriage, suggesting that only stronger relationships make it through to the wedding day.

But those working at the front line say the apparent improvement should not obscure the increasing difficulty faced by couples looking to separate. Although the process of securing a divorce is relatively straightforward, the associated negotiating over finances and children is proving an increasing challenge.

Faced with the cuts to legal aid and higher Court fees (the cost of applying for a divorce increased from £410 to £550 in March 2016) and the difficulty in setting up two homes, many couples are turning to increasingly desperate measures.

For some, it involves continuing to live together, even when officially separated, or even post-divorce, including so-called ‘bird nesting’ arrangements, where the children stay in the family home and the parents come and go. Others turn to online help or untrained mediators, only to discover later that they may have agreed to financial or childcare outcomes that leave them at a significant disadvantage when professional advice and representation could have reached a fairer outcome.

Our own family lawyer, James McMullan, said:

“Unfortunately the workload of the family lawyer is not reducing. Dealing with problems arising from self-conducted negotiations, or where negotiations have been managed by an untrained intermediary, is becoming more common.

DIY can seem a sensible option when trying to keep the lid on costs and people around you are saying the process is simple. Whilst it’s true that the application process itself is relatively straightforward, that’s only one small part, it is by no means fool-proof. If you get it wrong it could lead to paperwork being sent back, which could mean additional court fees.”

James added:

“It’s tough sorting things out between the two of you when emotions are running high, but talking things through is always the best way and having someone help you with those conversations is a good idea. That person doesn’t have to be a professional, but you should have expert input at some stage in the negotiations, to make sure that what you have agreed is fair, that neither party is pushing the other into a corner, and that it is in line with what you could expect as a reasonable outcome if you had gone to court.”

Such encouragement for couples to talk reflects recent research findings in the United States. This suggests that couples who share their problems with each other are more likely to overcome difficulties than those who share problems with their friends. As reported in the Journal of Social and Personal Relationships, researchers found that sharing concerns with a friend increased the odds of a breakup by 33%, but talking it out with a partner doubled the chances of them staying together.

Further, James added:

“Ending a marriage is one of the toughest things anyone will ever deal with, and what’s needed is a well-informed, collaborative approach. The couple, and anyone supporting or advising them, need to be focused on achieving an outcome through positive negotiation that is more talk, less war.”

Contact James McMullan today.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

The Bribery Act: The one time you should look for the price tag

Posted on December 16, 2016 - 12:18 pm by Penny Dewar

If you’re worried there are too many bottles of wine bearing “Happy Christmas” messages from your suppliers, it’s worth checking out the facts and ensuring staff know the right and wrong way to go about corporate gifting to comply with the Bribery Act.

The Bribery Act came into force in 2011, simplifying and consolidating existing laws on corruption and creating a new crime of failing to prevent bribery. When it became law, many commentators thought it might end all corporate hospitality. That wasn’t the case, with the Ministry of Justice’s later guidance saying: “hospitality is not prohibited by the Act”, but any gifts must be reasonable and proportionate. So, companies who splash out and are over-generous in their gifting could break the rules and get themselves and the recipient into deep water.

Bribery is defined as giving or offering a person a financial or other advantage to induce them to act improperly. It is also a crime to ask for or to receive an inducement in return for acting improperly.

Our white-collar crime expert, Vinay Verma, said:

“When it comes to gifts or any form of hospitality, the simplest thing is to have a clear threshold that’s appropriate to the sector you’re operating in, whether giving or receiving. Then, if anything offered has a value beyond that, employees must obtain permission. It’s also sensible to make sure everything, however small, is logged in a central register.”

As well as looking at the price ticket on gifts or hospitality, companies must demonstrate that they do it with the right intentions. A gift given at Christmas time is less likely to be problematic than something offered during contract negotiations or when an extra invoice has been submitted. Similarly, hospitality that doesn’t involve any opportunity for business development on the giver’s part is likely to raise questions.

Vinay added:

“Entertaining your customers at a Christmas party, or providing a modest bottle of wine, is unlikely to cause problems. But if you offer a pair of theatre tickets and a dinner reservation for two at a high-end restaurant to a key contact and their spouse, that is much less likely to pass the “reasonable and proportionate” test. Where there’s a clear opportunity to promote the company supplying the hospitality, it’s more likely to be seen as reasonable business development.

“Preventing bribery is important for any business, whatever their size, and every company must demonstrate they are taking it seriously. That includes undertaking risk assessments, making sure staff know the procedure, and setting everything out in writing.”

Since introducing the Bribery Act, the Serious Fraud Office has shown a tough attitude to enforcement and seeking out corruption. In one recent high-profile case, a construction and professional services company was ordered to pay £2.25 million due to a conviction arising from a failure to prevent bribery. In short, where bribery has occurred, it is a separate offence to fail to have adequate measures to prevent it in place. We can help you ensure that those measures are in place and effective.

Call partner Vinay Verma today for more information.

Note: This is not legal advice; it provides information of general interest about current legal issues.

How employers can say no, without saying a word

Posted on December 12, 2016 - 11:49 am by Penny Dewar

The warning comes after an employer was found to have failed to take the necessary steps to facilitate rest breaks despite the employee not having made any specific request.

The case was brought by an employee who was running a roadside traffic management system. He argued that he had been denied his legal entitlement to rest breaks under the Working Time Regulations 1998.

The job with Abellio London Ltd involved regulating bus services to match road traffic conditions. Mr Grange, the employee, had a working day of 8.5 hours, including a half-hour lunch break. When it proved difficult for him to take a break because of the nature of the job, his employer changed his working day to 8 hours. The idea was that he would work without a break but finish half an hour earlier.

All workers are entitled to a 20-minute rest break after six hours of working under the Working Time Regulations, and if the entitlement is breached, an employee can make a claim if the employer ‘has refused to permit him’ to exercise the right. The key question, which took Mr Grange’s case to appeal, was whether an employee could make such a claim when he had not actively requested the break and so had not received a direct refusal from the employer.

Although the Employment Tribunal first held that there had to be an actual refusal of a request, the Appeal Tribunal held that workers should be positively enabled to take breaks by the employer.

In making the decision, the Employment Appeal Tribunal highlighted that minimum rest periods are essential for protecting health and safety. It said there should be no distinction between entitlements and obligations.

Employment expert Karen Cole said:

“The important thing to take away from this is that employers should not wait for rest breaks to be requested, instead they must be proactive in making sure that working arrangements enable workers to take those breaks. Otherwise, where the arrangement of the working day makes it difficult or prevents workers from taking a break, this may be taken as a denial of a right.”

She added:

“It’s important to have a clear policy, and to make sure that everyone in the company knows and understands how to take their break. This is particularly relevant to employers in sectors where employees often work long shifts and it is difficult to stop and take a break, such as social care, where continuity of care is vital. But it is equally important that all employers take it into account at busy periods, such as the run up to the Christmas holiday, and make sure that workers can take the required rest breaks, even if they choose not to.”

For more information, call Karen Cole from our employment team.

Note: This is not legal advice; it provides information of general interest about current legal issues.

Making a date with service charges?

Posted on December 7, 2016 - 10:21 am by Penny Dewar

JW Dirge, bachelor and property litigator, is waiting expectantly in his office at Nice and Nice Solicitors of London W1 for his encounter with a legal journalist, Felicity Longhand Shaw. He has googled Felicity and noted that she is interested in art, plays bridge, and likes the opera. JW’s pulse is racing. Unsure of what prompted her to request the meeting, he assumes it must be down to the efforts of the Nice and Nice Marketing Department. The interview gets underway with JW Dirge, who is eager to make a good impression.

FLS: “So Mr Dirge, I understand you specialise in residential service charge litigation. How did you get into that?”

JWD: “Oh, please call me JW, and yes, it was when I was a young solicitor with a provincial practice – Small Print and Sleep Solicitors in Axmouth. I was what was known as an articled clerk in those days – some would say the lowest form of legal life. I was paid a pittance but had, through family, been able to buy a flat in a small block. The owner of the building billed me for decorating the exterior, and I thought I would check to see if he had complied with the legal requirements. He had not, and I got out of paying the costs – quite a tidy sum. My boss at Small Print and Sleep, Mr Oid (initials AV), learned of this, and thereafter, every time a residential service charge dispute came in, he would say, ‘Give it to Dirge,’ and before I knew it, I became an expert.”

FLS: “Looking back now at your own experience do you think you used the law to achieve an unjust result?”

JWD: “I must confess to some feelings of guilt. The building looked a lot better after the landlord decorated it, and it helped me achieve a good price when I sold the flat. After that experience, the landlord passed the management of the building to a professional firm of managing agents, and the service charges increased significantly. I suppose I was being pedantic and possibly opportunistic, but it was my right. It is a lesson I pass on to my landlord clients.”

FLS: “So do residential service charge disputes differ from commercial service charge ones?”

JWD: “Oh yes. By and large, the body of statute law relating to flats and service charges does not apply to commercial property. My old boss, A V Oid, would not hesitate to make a wide swerve when he saw a residential service charge case come in. He quite liked commercial service charge disputes because they largely turned on the wording in the leases (and they paid better).

He could not bear the detailed regulation of residential service charges. He used to say, “it had Dirge written all over it”. I used to remonstrate with him about not being competent to advise landlords who had multi-let mixed residential and commercial buildings, but old AV Oid remained true to his name.”

FLS: “Would you say we have a skewed set of laws for regulating service charges?”

JWD: “Possibly – our laws are a reaction to wicked landlords who took advantage of vulnerable flat owners in the past. We have created a detailed body of rules and regulations which must be observed by landlords of flats. The red tape threshold is high. Below it sits a complex labyrinth that is daunting even for some lawyers. Certainly, I think it is beyond most lay people to engage with it.

In my view, the appointment of a managing agent is a must for all residential landlords. Managing agents make it their business to be familiar with the rules, and they have systems and software programmes to guide them through the complexity to ensure compliance.”

FLS: “Is it true that the most important protection for flat owners is that a landlord cannot recover building expenses exceeding £250 if he has not complied with the consultation requirement?”

JWD: “Possibly the most well-known, but I think the consultation requirements can distract one from the basic standalone rules in Sections 18 and 19 of the Landlord & Tenant Act 1985. Namely, the sums payable are limited to costs which are “reasonably incurred, and the relevant services or works must be done to “a reasonable standard”. These are highly interpretable expressions which provide a panoramic scope for disputes. An interesting spin on the consultation requirements is the thought that if they did not exist and there was little consultation, the First Tier Tribunal would be choc-a-bloc with tenants litigating over what are “reasonably incurred” works and services and whether they were done to a “reasonable standard”.”

FLS: “Really JW? Oh, do explain.”

JWD: “Paradoxically, observance of the consultation requirements by the landlord may assist him by clothing the recoverability of the service charges with an extra layer of protection. If the rules require no consultation, the reasonableness tests may act like stark lightning rods for disputes, and one can argue about reasonableness until the cows come home. In our world, compliance with the consultation procedure is by itself a mark of reasonableness and may blunt any attack by a tenant who ignored the various consulting letters from the managing agents.

Pausing slightly… I must say it is very kind of you, Felicity, to show such an interest in my subject. Usually, people start to glaze over when I start talking in detail about service charges.”

FLS: “Actually, JW, it is very interesting – entrancing even. Ahem, it just so happens that I have some service charge issues myself. In fact, I am heavily involved in a dispute over the sums that have been demanded of me for my flat. I have some papers with me. Would you have time to briefly review them – possibly over a glass of wine…”

John Gillette can answer all your queries on service charges today.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Dismissing employees with under two years’ service

Posted on December 5, 2016 - 1:14 pm by Penny Dewar

Generally, employees can only claim unfair dismissal against an employer if they have a minimum of two years’ service. In 2012, the qualifying period increased from one to two years. This presents employers with some level of flexibility in managing and dismissing staff with less than two years’ service.

Employers should be mindful of the start date for new employees and keep an eye out for any concerns. If dissatisfied, it is easier for employers to dismiss employees during the first two years of service (subject to some caveats below).

The minimum

It is sensible to meet with the employee to outline any concerns. Take notes during the meeting. Notes are important because they record what was discussed and are useful if issues arise further down the line. For instance, the employee may be given a short period to improve if the issue is performance-related. If the employer remains unhappy, there is the option to dismiss quickly and efficiently.

It is important to check whether any company policies and procedures are contractually binding. If so, the employer must ensure capability and disciplinary procedures are followed. Ideally, a company’s policies and procedures should not form part of an employment contract since this enables change without consultation.

Exceptions

Employers must exercise caution when contemplating a dismissal. No qualifying length of service is required for a dismissal which is deemed automatically unfair. Examples include dismissal for pregnancy-related reasons, discrimination or acting as a trade union representative. The full list is set out in the Employment Rights Act 1996.

Note an employee whose termination date is the day before the second anniversary of their start date will have two years of service and qualify for an unfair dismissal claim.

Irrespective of unfair dismissal claims, employees can claim wrongful dismissal for breach of contract if the employer does not provide the relevant notice period or makes a payment in lieu of notice. In such cases, fairness is not an issue. The sole question is whether the contract has been breached. Employees are also entitled to be paid for any untaken accrued holiday at the termination date.

Best practice

Employers should follow the ACAS Code of Practice on Disciplinary and Grievance Procedure. If the employer has unreasonably failed to follow the code, they risk facing a 25% uplift on any compensation. Therefore, a dismissal without notice may be met with an unlawful deduction from wages claim or breach of contract, along with an uplift. A capability termination may be met with a discrimination claim with the risk of an uplift. Employers following the Code add robustness to any claim on an evidential basis.

If you need advice on dismissing an employee, regardless of their length of service, or if you have been dismissed and want advice on your rights, call Karen Cole today.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

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