Family partnerships can be highly effective vehicles for running businesses, but that depends on good relations being maintained. In one High Court case in which ties of blood were sadly not enough to prevent discord, a father and son engaged in a bitter dispute over ownership of a hotel and campsite.

The father ran the business in partnership with his son and daughter-in-law. After a breakdown in relations, they agreed that the partnership had been dissolved, that its affairs should be wound up by a receiver and that its assets and liabilities should be divided between them.

The father and son were, on paper, equal joint tenants of the property which formed the main asset of the partnership. However, the father argued that this did not reflect the true position and that he was the beneficial owner of 80 per cent of the property. He launched proceedings seeking a declaration to that effect.

Ruling against him, however, the Court compared his thoroughly unreliable evidence with the convincing testimony of his son. Even if the father had contributed more to the property’s purchase price, it had been agreed between them at the outset that they would hold it in equal shares. The son had entered into the transaction on the faith of that agreement.

For any further advice, please contact Kamal Majevadia 0121 746 3300 email, k.majevadia@sydneymitchell.co.uk or fill in our online enquiry form.

The General Data Protection Regulation (GDPR) will come into effect on 25 May 2018 and will affect many businesses in the UK. The UK's decision to leave the EU will not have any immediate effect on the application of the GDPR.

The legislation imposes significant record-keeping requirements for any organisation that processes or controls personal data and the penalties for breaches are significant. The definition of personal data is wider than under the current legislation and the GDPR requires organisations to show how they comply with it.

In addition, specific information will need to be given to those who whose data is held. See the ICO website for further details. 

The Information Commissioner's Office is publishing a series of updates which provide guidance for organisations that will have to comply with the GDPR.

The most recent update (January 2017) contains guidance on:

  • Data portability
  • Lead supervisory authorities
  • Data protection officers

Firms that breach the GDPR may pay a heavy penalty. Contact us for guidance on complying with its complex requirements.

Please contact Roy Colaba on 0121 698 2200 email, r.colaba@sydneymitchell.co.uk or complete our online enquiry form.

The Trade Union Act 2016, which makes a number of changes to the way in which industrial action is organised, came into force on 1 March 2017.

The Act amends the Trade Union and Labour Relations (Consolidation) Act 1992, including Section 226 on the requirement to hold a ballot before any trade union action.

Under the new regime, a majority vote in favour of industrial action will only be regarded as having the support of a ballot if at least 50 per cent of those entitled to vote did so. Different rules will apply, however, before industrial action in 'important public services' can go ahead; these include the health, fire, transport and border security sectors, plus public education provision to those aged under 17. In such disputes, a further test is to be applied whereby 40 per cent of all eligible union members must vote in favour of the industrial action for it to be legal.

An overview of the Act and information on further changes can be found here

For further advice please contact Jade Linton on 0121 746 3300, email j.linton@sydneymitchell.co.uk or fill in our online enquiry form

Last year, the Court of Appeal upheld the view of the Employment Tribunal (ET) and the Employment Appeal Tribunal (EAT) that the Working Time Regulations 1998 can be interpreted so as to conform with EU law in respect of holiday pay (British Gas Trading Limited v Lock and Another).

Mr Lock's normal pay included a commission based on sales in the previous month, and this represented on average more than 60 per cent of his remuneration. As he could not achieve sales whilst on annual holiday, this meant that his pay for the month following was lower than usual. His claim for unlawful deduction from wages was upheld by the ET and the EAT.

In dismissing British Gas's appeal, the Court affirmed the position that holiday pay of just basic salary on its own is not sufficient if this is not the worker's normal remuneration, which was defined in British Airways plc v Williams and Others as remuneration that is 'linked intrinsically to the performance of the tasks which the worker is contractually required to carry out under his contract of employment and in respect of which a monetary amount is provided'.

The Court was, however, at pains to stress that its function was to do no more than deal with the current appeal and its ruling was confined to the particular facts of Mr Lock's case. Different facts might result in different outcomes. In addition, the Court was silent on the appropriate reference period for the calculation of the holiday pay.

The Court acknowledged that its decision leaves unanswered questions, but said that 'nothing in this judgment is intended to answer them'.

British Gas had sought leave to appeal against the Court of Appeal's ruling but permission has been refused by the Supreme Court.

The case will therefore be remitted to the ET to calculate the level of compensation payable.

If your business is affected by recent decisions regarding holiday pay and you would like advice on your individual circumstances, contact us.

For advice on any employment law advice, please contact Jade Linton on 0121 746 3300, email j.linton@sydneymitchell.co.uk or fill in our online enquiry form if you need further assistance.

When selling or leasing property it is absolutely vital to answer pre-contract enquiries accurately and the consequences of not doing so can be severe indeed. In one case, a Tenant of warehouse premises was awarded seven-figure compensation after asbestos was discovered shortly after the Lease was signed.

In reply to the Tenant’s enquiries prior to execution of the Lease, the Landlord stated that it was unaware of any environmental problems relating to the premises. The Landlord had in fact received an email from a specialist firm which reported a health and safety risk arising from the presence of asbestos. Soon after the Lease was signed, the Tenant discovered the asbestos problem and very substantial remedial works were required before it could take up occupation.

The High Court acknowledged that Landlords do not generally warrant the state or condition of premises before they are let and that it is for Tenants to make their own enquiries, by survey or otherwise. However, the statement that the Landlord knew nothing of any environmental issues, when they had in their possession information that clearly pointed to a serious problem, amounted to a misrepresentation.

A term of the Lease stated that the Tenant acknowledged that the Lease had not been entered into in reliance on any statement or representation made by the Landlord. However, the Court found that that provision was highly unreasonable and did not enable the Landlord to escape liability.

The Tenant was awarded the costs of the remedial works and of arranging alternative warehouse accommodation during the period that it took to complete them.

It is important to understand that once a Tenant takes occupation of premises, it will be obliged to comply with all statutory obligations in relation to its use and occupation of the premises, including the obligations under the Control of Asbestos at Work Regulations.

It is imperative therefore for a potential Tenant (or Purchaser) to be provided with an Asbestos Report as it will become the “dutyholder” under the Regulations (because it will then have control of the premises).

This means that it must take all reasonable steps to determine the location and condition of materials likely to be asbestos containing materials, keep an up to date written register of any asbestos containing materials and monitor their conditions, assess the risk of anyone being exposed to fibre from asbestos containing materials, prepare a plan setting out how the risks posed by the asbestos containing materials are to be managed and put the plan into action, review and monitor it periodically.  If there are asbestos containing materials in the premises, the Tenant (or owner) must provide information on the location and condition of any such materials to anyone who is likely to work on them or disturb them e.g. employees or contractors who carry out work at the premises.

The Regulations apply to occupied and vacant (and even derelict) premises.

There are two important messages in this story:

1.         As a Landlord (or Seller), you must reply to pre-contract enquiries honestly and provide the information that you have in your possession.

2.         As a Tenant (or Purchaser), you must comply with the obligations as “dutyholder” in the Regulations from the date of occupation/ownership.  As well as being a contractual breach of the Lease by the Tenant, a failure to comply with the Regulations can result in substantial penalties, which is a criminal offence, punishable in the Magistrates Court with a fine of up to £20,000 and/or imprisonment for up to six months and, where there is a more serious breach, in the Crown Court, by an unlimited fine and/or imprisonment of up to two years.  Personal liability can also attach to directors and officers, where breaches have been committed by their company with their consent, connivance or neglect.

For more information, please contact Shilpa Unarkat on 0121 746 3300 email, s.unarkat@sydneymitchell.co.uk or complete our online enquiry form.

The Ministry of Justice has published its long-awaited review of the impact of Employment Tribunal (ET) fees, which were introduced in July 2013.

Whilst the review does identify some areas for concern, it concludes that, on the whole, the objectives for the introduction of fees – i.e. transferring a proportion of the cost from the taxpayer to users of the service who can afford to pay and encouraging the use of the Advisory, Conciliation and Arbitration Service's free Early Conciliation service and other mediation services, whilst at the same time protecting access to justice – have broadly been met, and 'while it is clear that fees have discouraged people from bringing claims, there is no evidence that they have prevented them from doing so'.

As a result of the findings, certain proceedings relating to payments made from the National Insurance Fund will be exempt from ET fees with immediate effect. These include claims in respect of a redundancy payment where the employer is insolvent. In addition, a consultation document has been published seeking views on the review's findings and on a proposal to raise the gross monthly income threshold for fee remission. Views are sought by 14 March 2017.

The TUC has criticised the report, accusing the Government of 'turning a blind eye' to the impact of ET fees. General Secretary Frances O’Grady said, “Until the Government commits to abolishing fees its commitment to ‘improve workers' rights’ in post-Brexit Britain looks pretty hollow.”

The challenge to the fee system brought by the trade union Unison is due to be heard in the Supreme Court on 27 and 28 March 2017.

For advice on any employment law advice, please contact Jade Linton on 0121 746 3300, email j.linton@sydneymitchell.co.uk or fill in our online enquiry form if you need further assistance.

The Government has published the draft National Minimum Wage (Amendment) Regulations 2017, which are due to come into force on 1 April 2017.

The revised rates are as follows:

  • The National Living Wage for those aged 25 and over will increase from £7.20 per hour to £7.50 per hour;
  • The National Minimum Wage (NMW) for 21- to 24-year-olds will increase from £6.95 per hour to £7.05;
  • The NMW for 18- to 20-year-olds will increase from £5.55 per hour to £5.60;
  • The NMW for 16- and 17-year-olds will increase from £4.00 per hour to £4.05; and
  • The apprentice rate of the NMW, which applies to apprentices aged under 19 or those aged 19 or over and in the first year of their apprenticeship, will increase from £3.40 per hour to £3.50.

The accommodation offset will increase from £6.00 per day to £6.40 per day.

For advice on any employment law advice, please contact Jade Linton on 0121 746 3300, email j.linton@sydneymitchell.co.uk or fill in our online enquiry form if you need further assistance.

Employers whose breaches of health and safety law result in injury to workers are made to pay for their non-compliance – but, as with individuals, the penalties levied are tailored to the seriousness of the offence in each case and the employer's ability to pay. This was illustrated in a recent case in which a £1.8 million fine imposed by Basildon Crown Court in January 2016 on a port operator was reduced to £500,000 by the Court of Appeal (R v C.RO Ports London Limited).

C.RO Ports London Limited was prosecuted following an investigation by the Health and Safety Executive into an accident in which a maritime terminal worker's arm was caught in a powered capstan. The injured worker was one of a three-man team securing an ocean-going vessel's heavy mooring ropes to land. His fingers became caught between the rotating drum of the capstan and the heaving line, causing his arm to be wrapped around the drum. A co-worker realised what was happening and operated an emergency stop device on the capstan, but this was too late to prevent the man suffering multiple fractures of the limb and nerve and ligament damage. He was still not able to bend and straighten his arm properly 18 months after the accident.

C.RO Ports pleaded guilty to a breach of Section 2(1) of the Health and Safety at Work etc. Act 1974 and was fined £1.8 million and ordered to pay £14,328 in prosecution costs.

The company appealed against that decision, pointing to its otherwise good safety record and its early guilty plea. It had also introduced revised health and safety procedures, to take into account the risks associated with electric capstans, immediately after the accident. It was facing challenging trading conditions, its pre-tax annual profits having fallen from £13 million at the time of the accident to £2.7 million in its most recent accounts.

In the circumstances, the Court of Appeal found that the fine was manifestly excessive and allowed the appeal.

Dean Parnell, specialises in defending companies/businesses in relation to health and safety prosecutions and is able to answer any questions you may have on health and safety investigations and/or prosecutions.

Contact Dean Parnell on 0121 698 2200 or email D.Parnell@SydneyMitchell.co.uk

In AA Solicitors Limited (T/A AA Solicitors) and Another v Majid, a young female lawyer who was treated in a demeaning and disrespectful manner by the principal of the firm for which she worked has been awarded more than £20,000 in compensation.

The principal was an older man in a position of power and authority who treated the woman as if she was only present in the office for his pleasure and gratification, rather than to work or improve her legal skills. She politely rejected his advances and the firm later purported to make her redundant.

Her sexual harassment claim was upheld by an Employment Tribunal and she was awarded £14,000 for injury to her feelings, £4,000 in aggravated damages and £2,111 in respect of lost earnings. The principal and his firm, who were held jointly and severally liable, argued before the Employment Appeal Tribunal (EAT) that the award in respect of injury to feelings was excessive.

In rejecting the appeal, however, the EAT found that, in the eyes of a reasonable person, the law would be regarded as deficient if it did not mark the principal's conduct with an award that recognised how humiliating it was for the woman to lose her job because she was not willing to play the sexually charged role that he had allotted to her. The EAT noted that, happily, the woman had not been out of work for long and had quickly found employment with another law firm.

This case serves as a reminder that the law protects employees from unwanted conduct relating to sex and from behaviour which violates their dignity. This includes behaviour by one employee towards another. Employers are advised to ensure that all employees are aware that no form of harassment will be tolerated in the workplace and have in place robust procedures for enforcing the policy.

Contact Jade LInton for advice on how to create and enforce an effective anti-discrimination policy.

Under the draft Equality Act 2010 (Gender Pay Gap Information) Regulations 2016, annual reporting on the gap in pay between male and female workers is to become compulsory for private and voluntary sector employers with 250 or more employees.

The Regulations were originally scheduled to come into force on 1 October 2016, but their implementation has been delayed. The final draft Regulations will now be laid before Parliament this autumn with a planned implementation date of April 2017. As things stand, employers will be required to report on pay differences using data from a specific pay period that contains the relevant date, which is every 30 April from 2017 onwards. Employers will then have 12 months beginning with the relevant date in which to publish the information.

If you would like assistance with carrying out a review of the pay and conditions of your workforce to check that these are fully compliant with equal pay legislation, contact Jade LInton j.linton@sydneymitchell.co.uk 0121 746 3300.

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