January News Articles
Employment Bill to repeal dispute resolution regulations
The 2004 Dispute Resolution Regulations have been widely criticised over the last few years. They were intended to make it easier and quicker to resolve workplace disputes but many employers feel they had the opposite effect.
Now they are to be repealed. The newly published Employment Bill will replace them with a new code drawn up by ACAS. One important change is that in future, employment tribunals will be able to amend awards if either party fails to comply with the statutory code.
If the employer is at fault then the award could be increased by up to 25%. If it is the employee who fails to abide by the code then the award could be reduced by up to 25%. In an effort to streamline the system, employment tribunals will be able to reach a decision without a hearing in certain circumstances.
The Bill will also provide greater protection for agency workers and introduce tougher sanctions against firms that breach minimum wage legislation. The maximum fine for failing to pay the national minimum wage is currently £5,000. In future, there will be no limit on the fine that can be imposed. Serious cases of non-compliance will be tried in the Crown Court.
There will be a fairer method for dealing with national minimum wage arrears so that employees don’t suffer any losses because of underpayment.
There will also be stronger penalties for agencies that try to exploit workers and undercut legitimate businesses. The Employment Agency Standards Inspectorate will be given greater investigative powers allowing it more scope to access financial information to check whether a worker's complaint is an isolated instance or an example of widespread abuse. The maximum penalty for employment agency offences will be raised from a £5000 fine to an unlimited fine.
Employment Relations Minister, Pat McFadden, said: “The National Minimum Wage was a key right this Government introduced to ensure workers were paid fairly. These changes would make sure everyone who is caught not paying their workers will be punished, with the potential for unlimited fines.
"No business should be allowed to get away with unfairly undercutting legitimate operators by exploiting workers.”
Government outlines timetable to implement Companies Act
The Government has outlined the final timetable for implementing the Companies Act 2006.
Most of the measures coming in to effect on 6th April this year have already been announced and include those relating to the need for company secretaries, the certification and transfer of securities, and mergers and divisions of public companies.
In addition, the Government has confirmed that measures relating to registers of members, the removal of entries relating to former members and the inspection of registers of interests will also take effect from 6th April this year.
Provisions coming into effect on 1st October this year include those relating to:
- objection to company names
- trading disclosures
- corporate directors and under-age directors
- general duties of directors in respect of conflicts of interest
- declaration by a director of an interest in an existing transaction or arrangement
- new procedure for private companies to make capital reductions supported by a solvency statement instead of by a court order
- repeal of the restrictions under the Companies Act 1985 on financial assistance for acquisition of shares in private companies
The Government has also confirmed that measures which are dependent on changing processes within Companies House will now come into force in October 2009 rather than October this year.
These include provisions on company formation, internal constitution and share capital.
Most firms now offer flexible working for staff
Nine out of ten employers now offer some form of flexible working for staff, according to figures released by the Department for Business, Enterprise and Regulatory Reform (BERR).
The number of workplaces offering help with childcare arrangements has more than doubled from 8% in 2003 to 18% in 2007.
The survey found that men are becoming keener to work flexibly. They accounted for 43% of employees who requested a change to their working patterns over the last two years.
The right to request flexible working was introduced in 2003 and at that time only applied to parents with a child under six or a disabled child under 18.
On 6th April 2007, this right was extended to carers of adults. Employers are obliged to consider such requests seriously and only refuse them if there are good business reasons.
Now the Government has announced that it intends to entitle parents of older children to request flexible working. A review is now being carried out as to what the cut-off age for older children should be.
The review body is expected to produce recommendations by the spring.
HIPs contribute to sharp fall in house prices
The extension of Home Information Packs (HIPs) to all homes regardless of size has contributed to a sharp fall in house prices, according to the property website Rightmove.
Rightmove measured 108,240 asking prices for houses put on sale by estate agents in the UK between 11th November and 8th December 2007.
It showed that the average price dropped by 3.2%. The decrease is partly caused by the fact that the run-up to Christmas is traditionally a quiet time when prices tend to dip. However, the Rightmove survey suggests that seasonal factors only account for about two thirds of the fall.
It believes the Government decision to make HIPs obligatory on all homes from 14th December also had a major impact. Thousands of people put their homes up for sale before the deadline to avoid having to pay for a HIP.
The survey showed that the proportion of homes coming on to the market with two or fewer bedrooms surged to 48% of the total market. In the same period last year the figure was only 38%. These smaller homes tend to be cheaper so the sudden increase in numbers accounted for about a third of the 3.2% fall in average prices.
Rightmove believes January’s figures will be similar but we should then see a rebound in February when the HIP effect will have finally worked through the system.
Please contact us if you would like more information about HIPs or any aspect of buying or selling a home.
Midwife entitled to claim damages after being injured by a patient
A midwife who was injured by a woman who had just undergone an emergency caesarean operation has won the right to claim damages against the hospital trust involved.
The midwife and an anaesthetist were attending to the woman in a recovery room. They were the only staff present. The woman was still confused after the operation and suddenly punched the midwife twice. A few moments later she tried to get up and pulled at the midwife causing to her to bang her hip against the side of the bed.
The midwife was injured in the incident and claimed damages against the hospital trust on the basis that it had failed to ensure that there was a safe system in place and because there weren’t enough staff in the recovery room to cope with such circumstances. She also maintained that cot sides should have been fitted to the beds to prevent confused patients trying get out and that the anaesthetist had been negligent because he hadn’t called for more staff after the patient’s first outburst.
The Court of Appeal has upheld the midwife’s claim because there had been a failure to make more staff available and also a failure to fit cot sides. One or both of those factors had caused the injury.
Family members fail to get aunt’s will overturned
The family of a woman who left £10m to the owners of a restaurant have failed to get the will overturned in the High Court.
Golda Bechal made a will in 1994 leaving nearly all her estate to her best friends, Kim Sing Man and his wife Bee Lian, who run a Chinese restaurant in Essex. When she died in 2004 at the aged of 88, her five nephews and nieces challenged the will claiming she didn’t know what she was doing when she drew it up because she suffered from dementia and she wasn’t fully aware of the extent of her estate. They claimed that they should inherit instead.
The court heard that Mrs Bechal had known the Mans for several years but then became particularly close to them after the death of both her husband and then her son Peter who was only 28 when he died. She visited them regularly at their restaurant and even took holidays with them.
Judge Sir Donald Rattee dismissed the family’s challenge saying he was satisfied that Mrs Bechal had “testamentary capacity” when she drew up the will and was well enough to understand and approve of its contents.
The family is now considering whether to appeal.
Should I buy or lease?
The dilemma of whether to lease or buy a property is one that not only taxes most new businesses but quite a few well established firms as well.
There are pros and cons to each approach and any decision will be influenced by several factors including budget, the type of business and the estimated rate of growth.
The great advantage of leasehold is the flexibility it offers. A firm that sees itself expanding will not want to buy a property that it’s likely to outgrow within a few years. By leasing, it can leave itself free to move on a few years down the line, or simply expand within the landlord’s existing premises by taking on new units if they are available.
You can negotiate a short lease of say, three to five years, if you think you are likely to want to move to somewhere larger in future. Or if you want longer term stability but are unsure how well your business might perform then you could take out a longer lease with a three-year break clause. This would enable you to walk away if things don’t work out as you hope.
There are potential pitfalls however. If you don’t exercise the break clause then you will be tied in for the remainder of the lease.
Leaseholders may also be able to negotiate a rent free period to help cover the cost of fitting out the premises. The landlord may also be prepared to contribute to the cost, especially on a longer term lease.
There are also, of course, advantages in buying and it will often be the better option for more settled businesses where future growth and development is more predictable.
If you feel you are likely to want to remain in a property on a long term basis with little change in your space requirements then buying may well work out more cost effective. Most landlords work on the general rule of charging an annual rent that is 10% of the value of the property.
If you choose to buy then you could own the property outright within ten years for the same price as leasing it. You will then be operating rent free as well benefiting from the capital growth.
The problem may be finance as banks are unlikely to provide loans of more than 75% of the value of the property leaving you to find the rest yourself. You would also have to pay for the fitting out costs which could be quite high.
There are advantages but also potential pitfalls in both approaches so make sure you check out the small print and get good legal advice before making any commitments.
Injured motorcyclist wins right to claim damages
The Court of Appeal has ruled that a motorcyclist is entitled to claim damages after being injured in an accident caused by another motorbike rider who crashed in the road ahead of him.
Andrew Dorning was travelling behind a rider who crossed on to the wrong side of the road on a bend and then crashed into an oncoming car causing an explosion. The rider was killed in the crash.
Mr Dorning was then unable to take the bend and slid across the road and ended up in a field. He later said the earlier crash had forced him to take evasive action which meant he lost control of his motorcycle.
The case failed at first because the judge found that there hadn’t been any debris on the road as Mr Dorning had claimed, forcing him to lose control of his machine.
However, the Court of Appeal ruled that he was still entitled to damages because the earlier crash and explosion, caused by the negligence of the first rider, had been enough to make him brake hard and lose control of his motorcycle.
The amount of compensation to be paid will now be decided at a separate hearing. The figure will be reduced by 20% because the Appeal Court judges decided that there was some contributory negligence on Mr Dorning’s part because if he had been further behind the first rider he might have been able to cope with the situation more easily.
Children’s names changed to protect them from abduction
A mother has won the right to change her children’s surnames to reduce the risk of them being abducted by their father.
The family court was told that after the couple separated, the father wanted his two children to spend half the year with him in Mexico. The mother said that when she rejected the request, he started to seriously harass her and threatened to take the children away. However, the father then alleged that she had abused the children and that they were also at risk from her new partner.
The mother moved to a refuge. A psychologist gave evidence that the father showed symptoms of a personality disorder and the children were at risk of being harmed if he had contact with them.
The court suspended the father’s contact rights and gave permission for the children’s surnames to be changed to protect them from the risk of abduction. The father appealed but the rulings have been upheld by the High Court.
The judge said the father’s threats to take the children had to be taken seriously. They needed stability and would suffer enormous stress if they were abducted so changing their names to reduce the risk would be beneficial for their welfare.
Teenager paralysed in drink drive accident awarded £6.5m
A woman has been awarded £6.5m compensation by the High Court for injuries caused by a hit and run driver.
Nikki Buckley was still a teenager when she was hit by a car which mounted the pavement near her home in the West Midlands in 2002. Miss Buckley, who is now 22, sustained spinal injuries which have left her paralysed. She now has only minimal use of her hands and needs round the clock care.
Some of her compensation pay-out will be used to provide specialised equipment and accommodation.
The driver was later jailed for two years in 2002 for driving under the influence of alcohol and for failing to stop at the scene of an accident.