News Archive for January, 2014

Property Use Restriction is Reasonable, Rules Tribunal

It is normal for any building divided into flats to have rules relating to the use to which the flats can be put, as well as other internal regulations.

The potential scope of such regulations was tested in a recent case which dealt with whether or not it was reasonable to have a rule that required flat dwellers to be owner/occupiers, rather than short-term tenants.

The argument resulted in a decision by the Upper Tribunal, which refused to amend a provision in a lease which restricted the use of the residential premises to the long leaseholder and his family. The flat was held under a 90-year lease and formed part of a small residential block.

The lease contained no restrictions on assignment or subletting but included a covenant whereby the leaseholder agreed ‘to use the flat as a private dwelling for the lessee and his family and for no other purpose’.

When applying under the Leasehold Reform, Housing and Urban Development Act 1993 for an extension to his lease, the leaseholder had sought deletion of the words ‘for the lessee and his family’. The landlord would not agree to the amendment and the leaseholder’s arguments on that issue were subsequently rejected by the Leasehold Valuation Tribunal.

The Upper Tribunal noted that it was only to be expected that owner/ occupiers might prefer their neighbours also to be owner/occupiers, rather than tenants with a more limited interest. In the circumstances, a covenant which sought to restrict use to the leaseholder and his family was reasonable and, on the evidence, had been ‘included deliberately’ in the lease.

If you are considering the purchase of a flat or other property in a multi-occupied building, a good understanding of any restrictions on use and the internal regulations generally is important. Contact us for advice.

Posted by Peter Nicholas on Thursday, January 23, 2014 at 11:33 AM

Cohabitation and the Law – Changes Afoot?

A Private Member’s Bill currently in Parliament aims to give long-term cohabitants rights more akin to those enjoyed by married couples and those in civil partnerships.

At present, a long-term cohabitant has no more legal rights relating to their partner than a person would if they were living with a friend.  The Bill defines long-term cohabitation as cohabitation lasting two years or more. Interestingly, it makes provision for couples who specifically wish not to have legal relations established between them to be able to ‘opt out’.

The Bill proposes to give a long-term cohabitant the right to bring a claim for a financial settlement against their former partner if they have suffered an economic disadvantage and the court is satisfied that their claim is ‘just and equitable’.

The terms of the settlement would be based on essentially the same factors as a financial settlement on divorce or the dissolution of a civil partnership, including the relative financial positions of the two parties, the arrangements for looking after children and their needs, and so on.

If you are concerned about the legal issues that may arise if you intend to cohabit or even just share a property with another person or persons, contact us.

Posted by Peter Nicholas on Thursday, January 23, 2014 at 11:27 AM

Revised Guidance on Preventing Illegal Working

The Home Office has updated its guidance for employers on preventing illegal working in the UK, which contains important information and advice on:

  • The law on illegal working;
  • Your role and duty as an employer;
  • The document checks you should carry out;
  • The various documents you could be given (including example images);
  • The various types of immigration statuses held bypeople; and
  • The consequences for employers who do not carry out document checks and are found to be employing an illegal worker.

The changes relate to:

  • The ending on 31 December 2013 of the restrictions on Bulgarian and Romanian nationals working in the UK;
  • Restrictions on Croatian nationals which came into force on 1 July 2013;
  • Information on the Fast Payment Option for paying a civil penalty; and
  • An additional circumstance in which a sponsor licence can be revoked if an employer receives a civil penalty.

The guidance can be found on the website of the UK Border Agency at www.ukba.homeoffice.gov.uk.

Posted by Peter Nicholas on Tuesday, January 21, 2014 at 03:58 PM

New Guidance on the National Minimum Wage

All employers must pay those who work for them at least the appropriate rate of the National Minimum Wage (NMW) if they are a ‘worker’ for minimum wage purposes and a specific exemption does not apply to them.  The penalties for failing to do so are severe.

The Government has produced new guidance to help employers comply with the law. This is divided into the following areas:

  • Eligibility for the NMW;
  • Calculating the NMW;
  • Working hours for which the NMW must be paid; and
  • Enforcement of the NMW rules.

The guidance can be found at https://www.gov.uk/government/publications/calculating-the-minimum-wage

Posted by Peter Nicholas on Tuesday, January 21, 2014 at 03:48 PM

Maternity Leave and Flexible Working Hours

In a ruling which underlines the fact that discrimination cases are particularly ‘fact sensitive’, a sales executive whose request for flexible working on her return from maternity leave was initially refused by her employer, but then granted on appeal, has lost her claim of indirect sex discrimination (Little v Richmond Pharmacology Limited).

Ms Little, who was employed by clinical research company Richmond Pharmacology Limited as a full-time sales executive, had requested permission to work reduced hours, three days a week, on her return from maternity leave.

She tendered her resignation after her line manager refused the request on the basis that, given the intensive one on-one service the company provided to its clients, it was not feasible for a sales executive to work part time.

That same day, the company asked her to reconsider her decision to resign and Ms Little subsequently participated in an appeal hearing which resulted in an offer that she be permitted to work part time on the terms she had suggested for a three-month trial period. She did not take up the offer, however, and confirmed her resignation.

The Employment Tribunal (ET) dismissed Ms Little’s claim of indirect sex discrimination on the basis that, given the success of her internal appeal, she had suffered no personal disadvantage or detriment. The requirement that sales executives must work full time was justified by the way in which the company operated and had in any event been disapplied by the appeal decision.

Ms Little appealed against the ET’s ruling, arguing before the Employment Appeal Tribunal (EAT) that the tort of indirect sex discrimination had been completed by her line manager’s initial refusal to allow her to work part time and could not be ‘cured’ by her subsequent successful appeal.

The EAT dismissed the appeal. Instead of resigning, Ms Little could have taken up Richmond Pharmacology’s reasonable offer of a three-month trial period working fewer hours.

Despite having earlier tendered her resignation, she had participated in the appeal process, which had delivered the result that she desired.

Ms Little’s line manager’s initial refusal of a part-time return to work was conditional in that it was expressed to be subject to her right of appeal, which she had successfully exercised. In the circumstances, she had suffered no  personal detriment and her claim had rightly been rejected.

If you receive a request from an employee for flexible working and are unsure of your position, we can advise you on your individual circumstances.

Posted by Peter Nicholas on Tuesday, January 21, 2014 at 03:24 PM

Husband Who Hid Assets Faces New Settlement

If you have negotiated a divorce settlement and then find out that your ex-spouse has been less than open when disclosing their personal finances, the court will reopen the matter if there is sufficient evidence to do so.

In a recent hearing, the court was told by the ex-wife of a businessman that he had not been entirely truthful when he made his financial disclosures. She claimed that her ex-husband had substantially undervalued his assets by claiming that shares he owned in a company had no value when they were worth more than £700,000.

In addition, she claimed that he had failed to disclose other investments he held that were worth more than £800,000.

The wife successfully applied for the previously agreed financial settlement of £1.8 million to be set aside so that a new settlement, based on the true position, could be negotiated.

The courts insist that the disclosure of assets and income in such circumstances is correct and complete.

Failing to be open and truthful can lead to unpleasant consequences.

Contact us for expert assistance in all family law matters on 01554 749144 or susan.h@dpalaw.co.uk

Posted by Peter Nicholas on Wednesday, January 15, 2014 at 03:17 PM

Tech Workers Triumph in Unlawful Pay Deductions Test Case

In an important decision which helps to clarify the impact of ‘custom and practice’ on employment cases, the Court of Appeal has upheld claims by 23 workers that their technology company employer made unlawful deductions from their pay (CSC Computer Sciences Limited v McAlinden and Others).

In their previous jobs, the IT workers had for a considerable period received annual pay increases in line with the retail prices index (RPI). Their employment subsequently passed to CSC Computer Sciences Limited in 2000; however, the original terms of their contracts continued to apply by virtue of the Transfer of Undertakings (Protection of Employment) Regulations 1981.

CSC Computer Sciences had continued to award them RPI-linked pay increases for several years following the transfer.

However, pay rises subsequently fell behind the index and the Employment Tribunal ruled that unlawful deductions had been made from the workers’ pay. That decision was later upheld by the Employment Appeal Tribunal.

Dismissing CSC Computer Sciences’ appeal, the Court of Appeal found that, although the workers had no express contractual right to RPI-linked pay increases, such an entitlement
had been implied into their contracts by reason of the parties’conduct and established custom and practice.

CSC Computer Sciences had, by its conduct, communicated to the workers that there was ‘a policy’ in place that their pay would increase in line with the RPI and had ‘conveyed the impression’ that that was their contractual right.

Whether the company was mistaken in its belief as to its obligations was irrelevant in that it is well established that unilateral mistake cannot invalidate a contract.

Not all contractual obligations are in writing – they can be ‘implied into a contract’ by a course of conduct over time.

Contact us if you would like advice on any contractual matter.

Posted by Peter Nicholas on Wednesday, January 15, 2014 at 03:13 PM

Dental Practice Manager Wins Unfair Dismissal Claim

In The Leeds Dental Team Limited v Rose, a dental practice manager has succeeded in her claim for constructive unfair dismissal after her employer’s refusal to allow her to be accompanied by a friend or adviser at a disciplinary hearing contributed to a breakdown of trust and confidence in the employment relationship.

Mrs Rose was suspended from her job at The Leeds Dental Team Limited after she was accused of showing favouritism towards another employee and failing to record the latter’s sickness absences.

Her request that she be accompanied at a disciplinary hearing by Mr Temple, the former owner of the business who continued to work for the practice, was rejected by the new owner, Ms Shafi, who believed that he would be supportive of Mrs Rose’s position.

The proceedings had ‘ended in disarray’ when Mr Temple tried to enter the room where the hearing was taking place and Ms Shafi sought to prevent him from doing so.

Mrs Rose was then informed that if she did not attend a re-arranged hearing, alone, her pay would be stopped.  She was then absent from work on sick leave and eventually resigned by letter.

The Employment Tribunal (ET) found that she had been unfairly constructively dismissed and awarded her a basic award of £5,000 and a compensatory award of £4,205. The ET found that, by its actions, her employer had breached the term of trust and confidence implicit in Mrs Rose’s contract of employment.

In dismissing the company’s appeal against that decision, the Employment Appeal Tribunal (EAT) rejected arguments that the ET had failed to analyse the employer’s subjective intentions and had reached a perverse conclusion. It upheld
the ET’s ruling that the disciplinary process had been ‘handled very badly’.

Noting the gravity of the allegations and Mrs Rose’s 13 years of unblemished service to her employer and its TUPE predecessor, the EAT found that The Leeds Dental Team had acted unreasonably in refusing to allow Mrs Rose to be accompanied at the disciplinary hearing.

The failure to give her an opportunity to explain herself at an investigatory interview and the threat to stop her pay were also unreasonable in the circumstances.

Mishandling disciplinary procedures can prove expensive. If you are intending to take disciplinary action against an employee, contact us for advice.

Posted by Peter Nicholas on Wednesday, January 15, 2014 at 03:09 PM

Corporate Insolvency and TUPE – Court of Appeal Gives Guidance

In a case which raised new issues on the inter-relationship between insolvency rules and the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), the Court of Appeal has dismissed the unfair dismissal claims of four employees who lost their jobs at Crystal Palace Football Club as it sank into administration (Crystal Palace FC Limited and Another v Kavanagh and Others).

The club, which was at that time owned by Crystal Palace FC (2000) Limited, was near the bottom of the Championship and in dire financial straits at the end of the 2009/2010 season when the employees were summarily dismissed by the administrator, who was anxious to sell the club as a going concern.

Matters were complicated by the fact that Selhurst Park Stadium was owned by a different company and this too was in administration. At the time of the dismissals, the administrator had been in negotiations with a consortium which ultimately bought the club through a corporate vehicle, Crystal Palace FC Limited (CPFC).

The employees commenced Employment Tribunal (ET) proceedings against CPFC on the basis that their dismissals had been unfair and the company was liable to compensate them by virtue of TUPE.

Whilst it was common ground that the principal reason for the dismissals was not the transfer itself, as no agreement had been reached with regard to this at the date on which the dismissals took place, the employees claimed that their dismissals were unfair by reason of Regulation 7 of TUPE because they were for a reason connected with the transfer that was not an economic, technical or organisational reason entailing changes in the workforce.

The ET dismissed their claims but their challenge to that decision was subsequently upheld by the Employment Appeal Tribunal. Allowing the company’s appeal and restoring the ET’s decision, the Court of Appeal noted that although the dismissals had been ‘connected with the transfer’, the administrator had had genuine economic reasons for dispensing with the employees’ services that were not related to the sale of the club.

Noting the ‘unique features’ pertaining to the financial affairs of football clubs, which commonly have few assets other than their squad of players, the Court found that the administrator’s principal motive was to reduce the club’s wage bill in order to continue running the business and to avoid liquidation.

Although the club’s disposal as a going concern was the administrator’s ultimate objective, the sale to the consortium was only hoped for at the time of the dismissals. The Court also noted that the dismissals had not made the business of the club ‘a whit more attractive’ to a potential purchaser.

It was only because negotiations for the parallel sale of the stadium dragged on beyond the time during which the administrators could continue to pay all the staff that the employees had to be dismissed.

In its judgment, the Court noted that the case had raised ‘fundamental issues’ relating to the interaction between corporate insolvency rules and the employment protection provided by TUPE.

The ruling means that any potential liability arising out of the dismissals remained with Crystal Palace FC (2000) Limited and did not pass to CPFC following transfer of the club’s assets.

If you are seeking to acquire a business in administration, contact us for advice.

Posted by Peter Nicholas on Wednesday, January 15, 2014 at 03:03 PM