Insight Article Archives

Share schemes: a perk or a pain?

Posted on May 9, 2018 - 9:08 am by Penny Dewar

So, if you decide to set up a share scheme, what should you consider before you start issuing certificates to your workers? Here’s a quick look at the perks and pains of share schemes.

Why do it?

Firstly, you need to ask yourself why you’re considering a share scheme. You could be doing it to:

incentivise your workforce so that they are more invested in the company and its success;
recruit or retain key personnel;
reduce employment costs/employee remuneration;
succession planning.

What scheme?

The most popular scheme for employers is an Enterprise Management Incentive (EMI). The relief is in the form of EU state aid to companies granting EMI options. However, the current approval expired on 6 April 2018, and the EU Commission has not yet extended the relief. Therefore, EMI options granted on or after 7 April 2018 may be treated as unapproved options. It is still worthwhile considering EMIs, however, as it would seem likely that contingency provisions will be put in place in due course.

A Share Incentive Plan (SIP) is also a fairly common mechanism. However, employees cannot be differentiated between, and if operated, a SIP must be offered to all UK employees. A SIP can include free shares, partnership shares or matching shares. Free shares can be given to an employee (up to £3,600 per year) and can be linked to performance. Matching shares provided that the company may agree to give additional free shares to employees who purchase shares.

An alternative is a Save as you Earn scheme (SAYE). This carries two elements; a savings arrangement and an option. The company must be listed on a recognised stock exchange or be independent. The employee saves between £5-500 per month (after tax) for three or five years.

These are attractive as they allow the employee to save without paying Income tax or NI on the difference between the price paid for the shares and their value.

Those mentioned are examples of the most common schemes, but more are available, and you should take specific advice on the scheme best suited for your company’s circumstances.

What are the advantages?

Providing company shares to your employees demonstrates that you’re serious about growing your business and want each employee to participate in that expansion.

It shows that you value your employees, and are in it for the long haul, rather than just short-term gain. Giving up a certain amount of ownership of your business (although still retaining overall control) builds trust and increases commitment from all parties.

You may get corporation tax relief on the cost of setting up a share scheme and the cost of providing free and matching shares. You don’t pay the employer’s NI on shares or options as long as all the relevant criteria are met. Taxation on share schemes, however, can get complicated, so expert advice from lawyers and accountants is crucial to ensure you stay on top of your obligations.

What are the disadvantages?

Logistically, providing employee shares can be a nightmare. Top of the list is administrative costs (both time and money). Before you decide to set up a share scheme, it’s important to talk the idea through with a solicitor to look at the pros and cons, what type of share option is best and how to set it up. It’s not just the short-term set-up costs you need to consider, either, but the long-term management and documentation.

The more shares you issue, the less control you have over your business. Remember that you’ll need 75% of the voting shares if you want to control important company decisions.

Remember that shares can go down as well as up. And if your employees’ shares start to drop in value, that could impact on morale. Not only are they seeing their investment decline, but it could indicate deeper problems within the company. Share value acts as a litmus for the health of a company. You’ll also have to ensure your employees have realistic expectations of the performance of their shares. Unless they work for Google, a few free shares in a company will not see them through retirement!

Share schemes are a great way to reward loyalty and stimulate growth. They have their downsides, but overall, they’re popular perks with employees and, done well, are fairly painless for bosses too.

For more information, speak to Karen Cole today.

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

How can you protect your business when customers call in the bailiffs?

Posted on May 2, 2018 - 5:58 pm by Penny Dewar

If the judge rules against you, and your ex-customer wins either their money back, damages, or both, you will need to pay up. If you cannot pay, or will not pay, it is likely that the bailiffs will come knocking.

So, what can you do to help protect your business when this happens?

Stopping bailiffs at the door

Bailiffs cannot attempt to take control of goods without giving notice in advance. If you have not received this notification seven clear days ahead of their visit, then they cannot enter your property.

Next, check that the bailiff has the correct documentation and is authorised to execute a Writ of Control or a Warrant of Execution. Without it, they cannot take anything out of your property.

The only ‘bailiffs’ who can enter your building without notice are High Court enforcement officers These are court-appointed enforcement officers who take over when a claimant has escalated a claim straight to the High Court. They usually arrive without notice but will still need to have a court order to seize goods.

Can bailiffs take anything they want?

What the bailiffs can take depends on whether you operate as a sole trader or as a limited company.

Sole traders

If you are a sole trader your business debts are treated the same as your personal debts. An Enforcement Agent can seize goods that will raise enough money to cover the debt, plus interest, and their fees.

If you’ve received notice in advance that bailiffs have been instructed it is a good idea to get legal advice as quickly as possible. Even if the debt is a business debt, the bailiff can take items from your home. This can include any jointly-owned items as well as items that you own outright, cash and cheques.

There are certain items the bailiff cannot take, including:

anything belonging to a child;
hire-purchase items that have outstanding finance, or are leased; and
items that are considered essential for everyday life such as a washing machine or cooker.

The bailiff also cannot take anything that is considered essential for work or study, such as your computer or tools, up to a value of £1,350. Any items worth more than this can still be seized.

If the bailiff wants to take something that you think is exempt, you’ll need to prove it. For example, you will need to prove items are worth less than £1,350 by showing the bailiff receipts. Or if they want to take something you need for work, show them order forms and explain why you need the item.

Limited companies

If the debt is against a limited company, then only goods that belong directly to the company can be removed.

Bailiffs can take money, office equipment, stock and/or machinery of any value. They cannot take any goods that are leased or on hire-purchase. You’ll need to show proof that items are leased or on hire-purchase to prevent the bailiffs from taking them or adding them to a Controlled Goods Agreement.

Depending on the situation, there may be other options to explore with your solicitor. This could include setting up an informal arrangement. This is a non-insolvency arrangement, which might be suitable if you have short-term cash-flow problems.

What is a controlled goods agreement?

If you cannot pay the money demanded immediately, but you can repay it in instalments, you could negotiate to enter into an agreement called a ‘controlled goods agreement’.

This means that the bailiff will identify goods or property that could cover the value of the debt (plus fees and interest). They will visit your business property to draw up a list of assets that will be controlled under the controlled goods agreement. You will not be able to sell, remove, or give away these items, but you will still be able to use them, which can be a lifeline for businesses if you depend on these to operate. However, if you miss any payment, the bailiffs can return and take them away.

Legal support

If your business has received an advance notice of debt collection, do not ignore it. Professional legal support can help you to get through these difficult times. It can:

take control of the situation, freeing up your time so you can concentrate on getting your business back on track;
ensure you benefit from expertise to help negotiate a stronger deal; and
give you honest, unbiased advice, free from the emotional attachment that you may have to your business. This can help you to make the right decisions for your business and your family.

For more information, speak to Laura St-Gallay.

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

Part 2: Crossing and dotting makes for clear contracts

Posted on April 29, 2018 - 4:47 pm by Penny Dewar

The basic requirements of a contract are that both sides have reached an agreement, which is intended to be legally binding, is supported by consideration, and is sufficiently certain and complete to be enforceable.

Looking at those components in turn, in the case of Blue v Ashley, Judge Leggatt revisited the evidence against each of the textbook requirements for a binding contract:

Agreement when an offer is made and accepted

The necessary agreement is reached either by the parties signing a document containing agreed terms or by one party making an offer which the other accepts by words or conduct. Typically, acceptance is at the point of promising to do something, except in ‘unilateral contracts’ where the contract is established when the recipient of an offer starts to perform the action required to earn the reward. In this case, it was argued that this was a unilateral contract, and the acceptance took place when he started work directed towards increasing the share price value. But the judge highlighted that an offer may not always be intended: “There can be circumstances in which a person uses the language of offer without expressing a genuine willingness to be bound”, giving the example of someone saying at a party they will give you a million pounds if you can speak for a minute on a topic, in which circumstances no-one would reasonably think the words were meant to be taken seriously or to be legally binding.

Intention to create a legally binding contract

Even when a person makes a real offer which is accepted, it does not necessarily follow that a legally enforceable contract is created. It is a further requirement of such a contract that the offer, and the agreement resulting from its acceptance, must be intended to create legal rights and obligations which are enforceable in the courts and not merely moral obligations.

Factors that may show that an agreement was not intended to be legally binding include where it is made in a social context if it was expressed in vague language, or if the promise was made in anger or jest. For example, Justice Leggat said: “if two people agree to meet for a drink at an appointed place and time and one does not turn up, no one supposes that the other could sue to receive his wasted travel expenses.” There must be the intention for a legally binding contract to be created.

Consideration

To be legally binding, an agreement must traditionally be supported by consideration, as English law will not enforce a promise for which nothing has to be done in return. So, if the offer to pay £15 million on the Sports Direct share price reaching £8 per share was simply accepted by Mr Blue, and he did not need to commit to doing anything to achieve the outcome, it would not give rise to a legally binding contract. But to qualify for the payment, Mr Blue had to “get” the Sports Direct share price to £8, undertaking work which was aimed at increasing the share price to that level, so the requirement of consideration could be demonstrated.

Certainty and completeness of terms

Even if there is an agreement and an intention to create legal relations, a contract will be unenforceable if its terms are too vague or uncertain. It is another ground on which Mr Ashley disputed Mr Blue’s claim.

For more information on how to minimise the risk of commercial disputes, contact M. Qaiser Khanzada.

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

Part 1: Crossing and dotting makes for clear contracts

Posted on April 29, 2018 - 4:18 pm by Penny Dewar

He must have weighed up the risk, and as he is already a very wealthy man with a fortune of some $21 billion, he will not go hungry while labouring away for the next decade, but one hopes he has put in place a very clear contract. It may seem surprising, but all too often, such agreements are made on a so-called ‘gentleman’s agreement’, which is challenged later, leading to battles fought in court.

In February, art dealer Simon de Pury won his action in the High Court for payment of a $10 million commission over the sale of a famous painting by Gaugin – money that he claimed he was owed under a gentleman’s agreement with the seller.

But when a former investment banker claimed that Mike Ashley, the chief executive of Sports Direct, had agreed to pay him a £15 million bonus if the Sports Direct share price doubled within three years, a High Court judge ruled that the requirements for a binding contract had not been satisfied.

Both cases are interesting, not least because of the high stakes and colourful characters involved, with sensational details and claims of misbehaviour made in court, but also because they take us back to the fundamentals of contract law, something the judge revisited in detail when summing up in Blue v Ashley.

Jeffrey Blue was providing consultancy services to Mr Ashley and had been asked to find a new corporate broker. As a result, he, Mr Ashley and three representatives of a potential corporate broker got together on 24 January 2013 at the Horse and Groom pub.

Blue claimed that Mike Ashley had agreed on that night to pay him a bonus of £15 million if he helped to raise Sports Direct shares from £4 to £8 over a three-year period. He claimed the conversation had formed a legally enforceable contract. Still, the circumstances that surrounded the conversation were a significant factor in Mr Blue losing his case, as it took place during a heavy drinking session in a pub.

The judge dismissed the claim, saying the agreement was “not a serious discussion… but was banter in which Mr Ashley was displaying his wealth and scale of ambitions”, not a contract, and “that there was no one present in the Horse & Groom pub who thought that it was genuine… they all thought that it was a joke”. Justice Leggatt summed up his judgement by saying that “the fact that Mr Blue has since convinced himself that the offer was a serious one and that a legally binding agreement was made, shows only that the human capacity for wishful thinking knows few bounds”.

But the ‘wishful thinking’ required a High Court judgement to settle the dispute, and nowadays, when we are all involved in communicating in so many ways – email, text, voicemails – and in so many different environments, including the corner coffee shop, it’s worth revisiting what does constitute a binding contract.

Under English law, it is possible to make a contract without any formality, simply by word of mouth, but if there is no written record, the existence and terms of a contract may be harder to prove. In such a case, an agreement may be unenforceable on the grounds of uncertainty. And because the value of a written contract is well-recognised, not putting things in writing in a business context may undermine later claims, as happened in the Blue v Ashley case. Indeed, one of the requirements for a binding contract is an intention to enter into legal relations, and not recording an agreement in writing might itself suggest that there was no such intention.

In looking for evidence of what was intended and understood by the two men, the judge highlighted how unusual it was to have a claim for millions of pounds based entirely on a word-of-mouth agreement, with no other record existing. As he said: “In the twenty-first century, the prevalence of emails, text messages and other forms of electronic communication is such that most agreements or discussions which are of legal significance, even if not embodied in writing, leave some form of electronic footprint.”

This case had no such footprint, with the only source of evidence being what was said in the pub as recalled by the different people present and with no later conversations recorded or referred to in any written exchange. This led the judge to conclude that Mr Blue did not take the offer to be a serious one at the time, saying: “I cannot believe that if Mr Blue had thought at the time he had made a contract with Mr Ashley under which he potentially stood to receive £15 million, he would have regarded it as unnecessary for months afterwards to ever check that Mr Ashley recalled what had been said.”

By contrast, the legal action over the gentleman’s agreement concerning the sale of the Gaugin painting between former Sotheby’s executive Ruedi Staechelin and the husband and wife team of art dealer and auctioneer Simon and Michaela de Pury, although not written into a formal contract was covered by a series of emails and other communications.

The Tahitian period painting, Nafea faa Ipoipo (When Will You Marry), was owned by Mr Staechelin, who Mr De Pury approached to see if he might be interested in selling the work. Staechelin said he would not accept less than $250 million for it, net of commission. The sale took some time to go through but was eventually made in 2014 when it was sold to the emir of Qatar, Sheikh Tamim bin Hamad al-Thani for $210 million.

When the de Purys claimed the $10 million commission, they said they were owed for helping negotiate the sale; they were sent away. Mr Staechelin’s lawyer argued that they had known the Qataris would not pay more than $210 million but had encouraged the negotiations by saying they were willing to pay $230 million, so they had breached their fiduciary duty and forfeit any right to commission if it had ever existed. The judge did not agree, upholding the claim of a legally binding contract for the commission to be paid, so there was a happy outcome for the de Pury’s, but only after three years of legal action.

So, is it the case that when it comes to a verbal contract – or gentleman’s agreement – sometimes you win, and sometimes you lose? No, it’s not that simple.

These two cases arrived in the High Court because of their individual and complex circumstances. The outcomes extended well beyond a simple review of whether something was written down or not. It is always good practice to record any verbal agreement in writing, whether millions or hundreds of pounds are involved, and ideally, have it signed by all parties if you want to rely on it later.

For more information on minimising the risk of disputes over commercial contracts, contact M. Qaiser Khanzada.

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

Can pre-nups help to save your marriage?

Posted on April 13, 2018 - 2:14 pm by Penny Dewar

If you’re tying the knot this year, it’s likely you’ve spent time carefully planning everything from bouquets to bunting. But have you given a second thought to a pre-nuptial agreement?

Some couples just don’t want to think about what happens if there isn’t a fairy-tale ending. But what if a pre-nuptial agreement (a’pre-nup’) could help strengthen your marriage?

Image by Viktoriya Kirilova ID 18849967 Dreamstime

What can a pre-nup do?

A pre-nup is a legal agreement designed to make things easier to sort out if the marriage breaks down. It can:

protect any pre-existing fortune from being split
protect a spouse from their partner’s debt
provide for children from a previous relationship
keep family property within the family
help prevent solicitor fees from mounting up

A pre-nup is enforceable in the UK, although judges still have the discretion to ignore it, especially if it is unfair to any children of the marriage.

So how could a pre-nup help save your marriage?

There’s a saying that goes, ‘Money makes people funny.’ People have different attitudes to money, which can cause arguments even among close family and friends. Money is the leading cause of stress in relationships – and that stress can sometimes strain a relationship to breaking point.

That’s where a pre-nuptial agreement could help a marriage to last longer. With a pre-nup, you have clearly outlined your approach to handling your finances in advance. It will mean you’ve already agreed on many financial issues, such as whether school fees should be paid and how any inheritance should be handled. Deciding on these financial arrangements in advance could help prevent future arguments leading to divorce.

Is a pre-nup for you?

You might feel that you don’t have enough money to warrant a pre-nup when you marry, but who knows what the future may bring?

To decide if a pre-nup is for you, speak to one of our family lawyers. They are no longer just the preserve of celebrities and the super-rich. Anyone can benefit from the peace of mind that a pre-nuptial agreement can bring, but they may be especially relevant if:

you’ve built up a business and don’t want to have to sell it if you divorce;
you want to ensure that any children from a previous relationship will not lose any inheritance rights;
you have or are likely to inherit a family home that you would want to keep in the family.

A pre-nuptial agreement can also give you extra peace of mind if you have concerns over your partner’s debt. That’s because a ‘debt clause’ can be included to protect you from being liable for that debt.

Do I need legal help?

Yes. To comply with the law, a pre-nuptial agreement must be drawn up and signed by a qualified solicitor, like Pippa Marshall. There’s no ‘one-size-fits-all,’ so speaking to a family lawyer like Pippa is a good idea. She has the expert knowledge and understanding of this niche area to meet your needs effectively.

In most cases, a pre-nup will list each partner’s assets and how they will be handled if a divorce happens. All assets and property must be fully disclosed, and both parties must confirm that they voluntarily agree. You and your partner must use separate solicitors, and it should be signed at least 21 days before the marriage.

What happens if you change your mind?

Your pre-nup can be changed anytime as long as you agree. If you’re already married, you could consider a post-nuptial agreement anytime.

Contact family solicitor Pippa Marshall today.

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

A wake-up call for small companies on the bribery process

Posted on April 3, 2018 - 4:10 pm by Penny Dewar

Executives from the company were also filmed by an undercover journalist apparently suggesting that honey traps and bribery might be used to discredit politicians.

The company denies the allegations, saying that the Channel 4 news story was edited to misrepresent the conversations and explaining that its staff will actively try to tease out any unethical or illegal intentions from prospective clients because legality and reputational risks are critical in assessing new projects. In the statement, the company highlights how it uses such meetings to make an informed decision about who to engage with, in line with the guidance of the UK’s Bribery (the Act).

The Act came into force in 2011, with the aim of simplifying and consolidating existing laws on corruption and creating a new crime of failing to prevent bribery. In simple terms, bribery is defined as giving or offering a person a financial or other advantage with the intention of inducing them to act improperly. It is also a crime to ask for or to receive an inducement in return for acting improperly.

“Having the right processes in place to comply with the tough standards introduced by the Act is not just the concern of big business.”

In R v Skansen Interiors Limited, a contracting company employing 30 people was charged with failing to prevent bribery under Section 7 of the Act, resulting in the first contested trial of this offence since the Act came into force in the summer of 2011. The action was taken despite the company self-reporting the illegal conduct of its former managing director in making bribes to win contracts.

The company had anti-bribery and anti-corruption policies in place and had identified and stopped the largest bribe payment before it was paid, but the measures were found to be insufficient to meet the defence under the Act.

Vinay Verma, our white-collar crime expert, explains:

“The outcome of this case illustrates the difficulties that smaller companies may face in trying to act responsibly and keep within the law. Certainly, Skansen thought they had matters well covered, and by taking action to self-report may have imagined that their actions would have been considered exemplary, rather than falling short.

What is interesting is that by the time the case was heard, the company had become dormant, so no financial penalty could be imposed, and the only sentence could be an absolute discharge. When the judge asked why the prosecution had been brought in such circumstances, the Crown Prosecution Service said that it was in the public interest and they wanted to send a message to others.”

Vinay added:

“The message is loud and clear: you must have processes and policies that meet best practice conditions, whatever the size of your business, and be able to demonstrate how it is embedded within the culture of the company. That will be demonstrated through regular risk assessments, ensuring staff are kept up to date on procedures, undertaking due diligence on clients and agents, and making sure written documentation hits the right standard and matches up to the requirements of the Act.”

For more information on any of the issues raised by this article, contact Vinay Verma today.

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

Spotlight on equal pay

Posted on March 28, 2018 - 8:09 am by Penny Dewar

Why has there been such an emphasis on equal pay recently? Even though equal pay is a legal obligation, it is still clear that many organisations are simply not conforming to the legislation. Women are, despite huge advances in equality in the workplace over the past 30 years, still coming up short when it comes to the pay gap. No longer content to accept the discrimination, women are now voicing their anger over what is a violation of the law, and fundamentally unjust treatment when it comes to the monthly pay packet.

What does equal pay mean?

The Advisory, Conciliation and Arbitration Service (ACAS) outlines that employers must “Give men and women equal treatment in the terms and conditions of their employment contract if they are employed to do:

‘Like work’ – that is work that is the same or broadly similar;
work rated as equivalent under a job evaluation study;
work found to be of equal value in terms of effort, skill or decision-making.

Equal pay does not just refer to the basic pay packet. It also covers extras including:

Rates for overtime
Bonuses
Hours of work allocated
Access to pension schemes
Annual leave entitlement

And, it is not just about ensuring men and women are paid the same for the same or similar jobs, either. It also relates to other groups protected by law, such as people with a disability or from different ethnic backgrounds.

What employees can and cannot discuss regarding pay?

The Equality Act 2010 states it is unlawful for an employer in Great Britain to prevent employees from having discussions to establish if there are differences in pay. However, an employer can require their employees to keep pay rates confidential from people outside of the workplace.

Employers also need to ensure that any discussions about equal pay are protected. No one should be victimised following a request for information about pay for the purpose of making a discrimination claim.

Legal help for employees who think they are not receiving equal pay

The law is there to support individuals who are not receiving equal pay. However, it is a complex area of law and you should speak to one of our employment lawyers for specialist advice.

Generally, you can claim for up to six years of lost earnings, but there are strict time limits. That means it makes sense to get expert legal advice as quickly as possible.

To start with, you do not have to make an official complaint but could speak to your employer informally. If this does not resolve the issue talk to one of our solicitors to discuss the possibility of mediation before deciding whether to take your case to an employment tribunal.

When making a tribunal claim it makes sense to have someone in your corner with a thorough understanding of the law. They can give valuable advice and, depending on what you agree, their fees could be taken from the amount that you win from your employer if your case is successful.

Legal solutions for businesses

For any business, complying with the law around equal pay is essential. Failure can leave your business open to costly litigation as well as seriously affecting your reputation in the eyes of staff, customers, shareholders, and the public.

The laws around equal pay are extremely complex and ever-changing. This can leave your business at risk of claims, so it is important to stay up to date with all current legislation.

Seeking expert advice from a specialist employment lawyer can give businesses of all sizes the tools needed to meet all their legal obligations. This can include:

putting the right policies in place;
ensuring contracts are robust; and
delivering appropriate training for staff and managers.

Your legal team can also:

help you carry out an Equal Pay Questionnaire to establish the situation;
advise you on the strength of any case and whether it makes business sense to settle a claim before tribunal;
help you identify your defences; and
ensure that all the strict timings for evidence are complied with.

If you receive a warning of an equal pay claim you should seek legal advice as quickly as possible.

Ignoring it won’t make it go away. But be cautious as if you attempt to deal with the situation without taking professional advice, you could say something that is used against you in the future.

We offer businesses a unique employment and regulatory law package, as a way of keeping on top of those urgent and unforeseen legal issues. Speak to Karen Cole today.

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

WCs in takeaways and the workplace

Posted on March 14, 2018 - 1:39 pm by Penny Dewar

A local authority may require an owner/occupier of a “relevant place” to allow the public access to sanitary facilities free of charge, under the Public Local Government Miscellaneous Provisions Act 1976. The Act describes a “relevant place” as:

a place which is (or is proposed to be) normally used for any of the following purposes: (a) holding any entertainment, exhibition or sporting event to which members of the public are admitted either as spectators or otherwise; and (b) the sale of food or drink to members of the public for consumption at that place;
a place which is (or is proposed to be) used on occasion(s) for any of the above purposes; and
a betting office.

Following a 1997 case, the widespread assumption was that when it came to takeaways, a “relevant place” constituted the premises where the majority of food was consumed on the premises, and which had more than 10 seats. However, a 2016 case altered this understanding of the law.

In 2016, Mr Justice Kerr confirmed that the definition of a “relevant place” did not include a numerical threshold, nor did it include a test of whether a takeaway’s walk-in or sit-down custom was the predominant part of its business.

A local authority, therefore, has the power to require a relevant place, such as a takeaway, to provide sanitary facilities if it deems them desirable. It is then open to that business to appeal to the courts for an order to be dismissed on the grounds that it is unreasonable.

Nonetheless, the case confirms that many takeaways, throughout the country, may be required by a local authority to provide sanitary facilities – even if they predominantly serve takeaway food for consumption off the premises and provide a limited number of seats.

The Workplace (Health, Safety & Welfare) Regulations 1992 deal with the provision of sanitary conveniences in the workplace.

The Regulations define “workplace” as “any premises or part of premises which are not domestic premises and are made available to any person at a place of work…”. However, the Regulations do not apply to certain workplaces such as shipyards, docks and mines.

Paragraph 20 stipulates that sanitary conveniences shall be provided at readily accessible places, and shall not be deemed suitable unless:

they are adequately lit and ventilated;
they (and the rooms containing them) are kept in a clean and orderly condition; and
separate rooms are provided for men and women, except where, and so far as each convenience is in a separate room, the door is capable of being secured from the inside.

The Regulations further state that at least one WC for every 25:

women should be female only; and
men should be male only.

Paragraph 21 states that suitable washing facilities, including showers (if required by the nature of the work or for health reasons), shall be provided at readily accessible places.

Washing facilities shall not be suitable unless they:

are in the immediate vicinity of every sanitary convenience (regardless of whether provided elsewhere);
are in the immediate vicinity of any changing rooms;
include a supply of clean hot and cold water;
include soap and towels or other suitable means of cleaning/drying;
are kept in a clean and orderly condition; and
separate facilities are provided for men and women or have lockable doors.

It is important to note that the above specifications only apply to a “workplace” and not a “new workplace”.

New workplace conveniences

A “new workplace” is defined as “a workplace used for the first time as a workplace after 31 December 1992.” Unhelpfully, the Regulations give no indication of what constitutes the suitable and sufficient provision of sanitary conveniences for new workplaces. However, the Health & Safety Executive (HSE) has provided some useful guidance and has said that, where possible, there should be separate facilities for men and women, failing which there should be rooms with lockable doors.

Sanitary facilities used by women only

No. of People	No. of WCs	No. of Washbasins
1-5	1	1
6-25	2	2
26-501	3	3
51-75	4	4
76-100	5	5

Sanitary facilities used by men only

No. of Men	No. of Toilets	No. of Urinals
1-15	1	1
16-30	2	1
31-45	2	2
46-60	3	2
61-75	3	3
76-90	4	3
91-100	4	4

The HSE guidance further recommends that:

toilet paper is supplied and, for female employees, a means of disposing of sanitary dressings is provided;
the facilities should be well-lit and ventilated;
the facilities should be kept clean and in good condition;
the facilities should have hot and cold running water and plenty of soap or other washing agents;
if necessary, the basin should be large enough to wash your arms or forearms in;
there should be a means for drying hands; and
where necessary, there should be showers for particularly dirty work.

This means that effective systems to maintain any sanitary facilities to a high standard need to be put in place.

For more information, contact property lawyer John Gillette today.

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

When mini breaks just don’t cut it

Posted on March 8, 2018 - 6:43 pm by Penny Dewar

The mini break may have made the perfect date for Bridget Jones, but when it comes to employee rights, companies need to make sure they do everything to enable workers to take a full, uninterrupted 20-minute rest break.

The warning comes after the Employment Tribunal found Network Rail to have failed to take the necessary steps to facilitate 20-minute rest breaks, despite the employee being in a role that has special provision for alternative arrangements.

A railway signalman who was responsible for running single-manned signal boxes on eight-hour shifts brought the case. Due to train timetables, he could not take an uninterrupted break and had to be on-call when he did take a break. As a result, he argued that he had been denied his legal entitlement under the Working Time Regulations 1998 (WTR).

All workers are entitled to an uninterrupted 20-minute rest break away from their usual working location after six hours of working under the WTR. It must be known to be a rest break before it starts. So, if someone has had an unexpected 20-minute gap in their day, an employer cannot treat this as a rest break retrospectively.

If a worker is on call during a break, then it will not count as a rest break, but Regulation 24 of the WTR says that some workers will be excluded from these provisions as it may not be feasible to schedule the rest break in the usual way, but they must be allowed an equivalent period of compensatory rest. This applies to railway workers and others such as paramedics or lone workers such as those in a security role.

Although Network Rail provided a relief signaller in some regions, they did not do so in Mr Crawford’s region. Instead, they told him that he could take shorter breaks during his shifts “between periods of operational demand” and that these shorter breaks would add up to more than 20 minutes.

At the first hearing, the Employment Tribunal held that Network Rail had acted correctly and that when added together the short breaks were compliant with the requirements of compensatory rest. However, Mr Crawford appealed, and the Employment Appeal Tribunal (EAT) ruled against Network Rail. The EAT said that if it were possible to provide workers with a full uninterrupted 20-minute break, then that should be what happens. As Network Rail were providing the relief signalman in other regions, they must have been able to take steps to provide the same option in Mr Crawford’s region.

Employment lawyer, Karen Cole, said:

“Minimum rest periods are there for the protection of health and safety and this ruling demonstrates, once again, that tribunals will not allow employers to duck out of their responsibility.

As with all terms of employment, the starting point should be a clear policy that everyone knows and understands, especially where workers are involved in environments in which pre-scheduled breaks are hard to operate, or they are working alone. It’s important to re-evaluate regularly to see if problems are arising and take steps to ensure that breaks are being taken. You also need to be proactive about it, as arguing that a worker never asked for a break is not going to let you off the hook.”

Karen added:

“If you have a situation where it is difficult to give workers an uninterrupted break, away from their work station, then it’s worth reviewing the position with some specialist guidance, as the alternative may be an expensive tribunal claim.”

Crawford v Network Rail Infrastructure Limited

Speak to Karen Cole today.

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

The power of performance management

Posted on February 6, 2018 - 12:11 pm by Penny Dewar

Historically, performance management worked like this: an employee would annually sit down with their manager (having first completed an appraisal form) in a process often rushed and with one eye on the clock. Although this routine is still performed in some organisations, it’s not performance management.

ACAS defines performance management as ‘A continuous process’ that ensures the performance of employees contributes to the business’s goals; to continuously improve the performance of individuals and that of the organisation.

Performance management involves the perpetual process of setting goals and objectives and noting performance while giving and receiving ongoing coaching and feedback. Effective performance management contributes to a business’s success. Equally, if it’s ineffective, it will negatively impact it.

“Employees who receive ongoing feedback about their performance are more motivated to perform well in the future”

Ten ways your business can benefit

Increased performance motivation

Employees who receive ongoing feedback about their performance will be more motivated to perform well in the future. This also increases the likelihood they will stay with an organisation.
Increased self-esteem

There’s a basic human need to be recognised and valued at work.
Insight

Managers gain a better understanding of each employee’s contribution to the business.
A sense of purpose

Employees better understand what’s expected of them and what it takes to be a successful performer (i.e., the criteria that define their role and its success).
Fairer/more appropriate administrative actions

A performance management system provides valid information that can be used to manage bonuses, promotions, transfers and terminations.
Clear goals

The team’s and the business’s goals are made clear, and employees understand the link between what they do and the company’s success.
Increased competence

An effective performance management system doesn’t just improve an employee’s performance; it sets a solid foundation. This allows them to grow and become more successful by establishing development plans.
Misconduct is reduced

A good performance management system provides an appropriate framework so employee misconduct is clearly defined and identified early – before it leads to disciplinary action.
Employee claims

Data collected through a performance management system can help employers document compliance in adopting fair and reasonable procedures and treating employees well. This can stand you in good stead when facing a claim.
Performance clarity

A performance management system allows businesses to quickly identify good and poor performers, forcing line managers to promptly address performance problems.

Putting your performance management system together

Set clear expectations

Employees should never be left thinking, ‘what’s expected of me?’. If no standard has been set, they won’t be able to meet it. This often derives from a lack of communication, so always ensure you clearly explain expectations, check an employee’s understanding, and challenge any assumptions.

Regular feedback

Managers who excel at managing performance do not wait until the annual appraisal to discuss an employee’s record. This should happen on a regular and informal basis. Formal meetings should also be held to confirm and record discussions that have taken place throughout the year. That way, there are no surprises later.

Support and develop

It is little use pointing out where someone is falling short without discussing a plan of action that addresses the issue(s). Effective performance management is about supporting employees to reach their full potential. This could come from mentoring, coaching, training, seminars or other development activities. Employees who perform well need some incentive to continue doing so.

“A performance management system allows businesses to quickly identify good and poor performers”

In short:

A well-thought-through performance management system can benefit your business.
If people have a sense of purpose, they’re more likely to stay with the company.
It’s easier for employees to reach targets when they clearly know what’s expected of them.
If employees are performing well, they should be incentivised to keep doing so.

As a starting point, ACAS has produced a helpful advisory booklet which sets out the performance cycle ‘How to manage performance’. Of course, performance management is not a cure. You must also give attention to the recruitment process at the outset, as well as implement any capability or disciplinary procedure in a timely way when an employee is identified as a poor performer (despite effective performance management being in place).

With the right resources, a performance management system can help turn your business around. The best part is, it can be implemented in any company, no matter the size, so both employees and employers can start reaping the benefits.

Speak to Karen Cole today.

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

Older posts

Newer posts

Why do it?

What scheme?

What are the advantages?

What are the disadvantages?

Stopping bailiffs at the door

Can bailiffs take anything they want?

Sole traders

Limited companies

What is a controlled goods agreement?

Legal support

Agreement when an offer is made and accepted

Intention to create a legally binding contract

Consideration

Certainty and completeness of terms

What can a pre-nup do?

So how could a pre-nup help save your marriage?

Is a pre-nup for you?

Do I need legal help?

What happens if you change your mind?

What does equal pay mean?

What employees can and cannot discuss regarding pay?

Legal help for employees who think they are not receiving equal pay

Legal solutions for businesses

New workplace conveniences

Sanitary facilities used by women only

Sanitary facilities used by men only

Ten ways your business can benefit

Putting your performance management system together

Set clear expectations

Regular feedback

Support and develop

Stay in touch

News/Insight

What they say...