Lesley Seldon was a partner at a law firm that had a policy of retiring partners at 65. When Mr Seldon reached the age of 65, he was duly retired under the partnership deed.

However, Mr Seldon brought an unlawful age discrimination claim under regulation 17 of the Employment Equality (Age) Regulations 2006, which prohibits discrimination on the ground of age against partners.

At the subsequent hearing, the Employment Tribunal found that the law firm’s retirement policy was justified, stating that it was a proportionate means of pursuing the firm’s legitimate aims of:

1. Giving the firm’s younger associates an opportunity of reaching partnership within a reasonable timescale, thus giving them an incentive to remain with the firm;

2. Facilitating workforce planning, by giving reasonable expectations on when partnership vacancies would arise; and

3. Limiting the need to expel underperforming partners.  

Subsequent appeals by Mr Seldon to the Employment Appeals Tribunal and the Court of Appeal failed.

Mr Seldon appealed to the Supreme Court on the basis that it was wrong to use the same test for justification for both direct and indirect age discrimination (and the aims pursued by the firm did not justify direct age discrimination), and that the treatment had to be justified in relation to his case and not just the retirement policy in general.

The Supreme Court unanimously dismissed the appeal, but remitted the case to the Employment Tribunal on an outstanding issue to consider whether the choice of a mandatory age of 65 was a proportionate means of achieving the legitimate aims of the partnership.

The ruling means that an employer can set its own default retirement age; however, it must have a legitimate aim and be able to provide evidence to justify its means of achieving it.

Although the case provides some clarity for employers over the issue compulsory retirement, some uncertainty remains. The fact that the Supreme Court has remitted the issue of proportionality back to the Employment Tribunal means that, currently, the issue of when particular retirement ages are justified is still a grey area. The issue of what age (60, 65?) is a justifiable retirement age remains unresolved.

Points to note

1. The ruling applies to compulsory retirement ages for all employees (and not just partners);

2. The employer will have to prove that there are problems with recruiting younger workers in the firm’s industry/sector (and that this is a direct result of retaining older workers);

3. The employer will have to show that its chosen mandatory retirement age has been set at a level that is appropriate and necessary to achieve the firm’s particular aim in question; and

4. The employer (or partnership) will have to carefully draft retirement policies that explain the need for a retirement age.

If you would like to discuss the implications of this ruling for your business, or anything else employment-related, please contact me at michael.delaney@mablaw.com.

Mental ill-health has a huge detrimental effect on productivity: 91m work days are lost every year, costing businesses £30bn a year through lost production, recruitment and absence.

Mental illness, including dementia, depression, bipolar disorder, obsessive compulsive disorder and schizophrenia, is classed as a disability (at the point of diagnosis) under the Equality Act 2010, making it unlawful for an employer to treat a disabled person less favourably for a reason relating to their disability, without a justifiable reason.

It therefore makes good sense for an employer to take steps to understand and addressing mental health in the workplace.

This step-by-step guide intends to shows employers and managers how to:

1. Spot early the signs of mental ill-health;

2. Raise awareness of mental health issues among managers and staff;

3. Develop a culture where an employee feels comfortable disclosing their condition;

4. Approach an employee who may have a mental health condition; and

5. Try to help the employee cope with their condition or overcome it so they can work effectively again.

If you are unsure whether your workplace equality policies sufficiently cover mental illnesses, please contact me at michael.delaney@mablaw.com.

Statutory Maternity, Paternity and Adoption Pay

1. The standard rates of statutory maternity, paternity and adoption pay increase from £128.73 to £135.45 per week. The weekly earnings threshold for these payments rose from £102 to £107.

2. Maternity allowance increased from £124.88 to £135.45, with the earnings threshold remaining at £30.

Statutory Sick Pay

The standard rate of statutory sick pay increases from £81.60 to £85.85 per week.

Apprenticeships

The Apprenticeships (Form of Apprenticeship Agreement) Regulations 2012 prescribe the form of the apprenticeship agreement between an apprentice and an employer in England and Wales under s.32 of the Apprenticeships, Skills, Children and Learning Act 2009.

The Regulations state that apprenticeship agreements entered into under the Apprenticeships, Skills, Children and Learning Act 2009 must contain the basic terms of employment required to be given to employees under section 1 of the Employment Rights Act 1996. This can be in the form of a written statement of particulars of employment, a written contract of employment or a letter of engagement.

The apprenticeship agreement must also include a statement of the skill, trade or occupation for which the apprentice is being trained under the relevant apprenticeship framework.

Under section 35 of the Apprenticeships, Skills, Children and Learning Act 2009, an apprenticeship agreement entered into under the Act has the status of a contract of service and not a contract of apprenticeship.

Employment tribunals

1. Deposit orders. The amount of deposit order an employment tribunal will be able to order a party to pay as a condition to continuing with tribunal proceedings has increased from £500 to £1,000.

2. Costs awards. The maximum amount of costs an employment tribunal can award in favour of a legally represented party (without referring the case to the county court for detailed assessment) has increased from £10,000 to £20,000.

3. Witness expenses. Employment tribunals now have the power to order parties to bear the costs of witness attendance; the party who loses the case will have to reimburse the successful party for any such costs that have already been paid out.

Unfair dismissal

The unfair dismissal qualifying period has increase from one to two years.

Employees whose employment commenced on or after 6 April 2012 will need two years’ service before accruing the right to claim unfair dismissal or becoming entitled to written reasons for dismissal.

The qualifying period will continue to be one year for those employees whose employment commenced before 6 April 2012.

If you have any concerns about these changes and how they will affect your business, or want to discuss anything else employment-related, please contact me at michael.delaney@mablaw.com.

The case concerns the contact arrangements for a two-year old boy who has a gay father and a lesbian mother, who lives with her partner. The boy lives with his mother, but the father, who was a sperm doner, wants to pay a fuller role in his son’s life and is seeking contact with him; however, the mother claims that prior to conception, the father had agreed that the mother and her partner would be the main parents of the child and that he would not seek to enforce his paternal rights.

This is an important case, so the Court of Appeal has reserved its decision until an unspecified later date.

Option 1

You can elect to make a stamp duty payment on completion – at the relevant rate – on the whole value of the property (i.e. the current rate on a £250,000 property is 1 per cent and therefore a payment on completion of £2,500.) This option means that should you purchase further shares in your property, usually known as staircasing, you will not have to make any further stamp duty payments.

Option 2

Your other option is to elect to make a stamp duty payment – again at the relevant rate – on the share you are purchasing (i.e. the current rate on a purchase of a £100,000 share is 0 per cent and therefore no stamp duty would be payable on completion.) This may seem the more attractive option to take but if you have plans to purchase further shares in your property, those transaction(s) may attract stamp duty at the relevant rate in the future.

As we know, the first-time buyer stamp duty tax relief comes to an end on 24 March 2012 and consequently many first-time buyers are hurrying to take advantage of electing option number 1, as they can still seek the relief at 0 per cent up until this date.

It is always essential that you ask your solicitor about all the options open to you, so that you ensure you choose the best option for you!

The statement included further details of the NewBuy Guarantee scheme, which was initially announced as part of the Government’s Housing Strategy, and is expected to become available from Spring 2012. Further details on the scheme are available here.

The NewBuy Guarantee scheme, which has been developed jointly by the Home Builders Federation and Council of Mortgage Lenders, aims to assist buyers to buy a new-build home if they have a deposit of at least 5 per cent. The scheme will allow eligible borrowers to secure up to a 95 per cent Loan-to-Value mortgage on new-build houses and flats from participating builders in England. All mortgage lenders and house builders have been invited to sign up to the scheme. Further details are here.

The Government is supporting the scheme to help those home buyers who are unable to purchase a property because they do not have a large enough deposit.

The scheme applies to new-build residential properties (priced up to £500,000) that are being sold for the first time or for the first time in their current form. The scheme is for primary ownership only and is not available for shared ownership, shared equity purchases, second homes, investors, or buy-to-let. To be eligible for the scheme, purchasers must be UK citizens or have a right to remain indefinitely in the UK.

The Government anticipates that the scheme will help 100,000 households buy a new home.

The new online system will provide conveyancers with instant Buildmark cover information and access to all the associated documentation. This is good news for purchasers of new homes as it should help to speed up the conveyancing process.

Conveyancers will be able to:

1. Check whether a property is covered by Buildmark prior to exchange of contracts;

2. Complete the acceptance form online; and

3. Check and download all of the NHBC documentation, including the Insurance Certificate, policy documents, warranty status, and the CML Cover note.

The new process will allow any amendments to be made directly on to the system, thus avoiding the delays and costs associated with having to issue revised paper-based documents.

The change is good news for both homeowners and housebuilders.

As well as generally speeding up the conveyancing process, there should also be fewer cases where contracts are exchanged for the purchase of new homes where cover is not in place. In the event that there is a problem with the cover (e.g. if cover is not available as the builder or developer is no longer registered with NHBC), then that information will be available to view immediately. Builders and developers will also benefit because there will be no acceptance-related paperwork to store or send.

Under the Employment Rights Act 1996, an employee must have been continuously employed for at least one year to be able to claim unfair dismissal (except in specified circumstances). The draft legislation increases this qualifying period to two years for employees whose employment begins on or after 6 April 2012.

The Government confirmed last month that the change will not be retrospective. Therefore, the current one-year qualifying period will continue to apply to employees who started employment with their employer prior to 6 April 2012.

The draft Regulations also increase the qualifying period that applies to the right to receive a written statement of reasons for dismissal. The current one-year qualifying period will increase to two years for those employees who began working for their employer on or after 6 April 2012. 

Once the draft legislation has received parliamentary approval, the Government estimates that the increase in the unfair dismissal qualifying period will save businesses £6m per year, with a reduction of 2,000 unfair dismissal claims per year.

The article looks at both the Government’s recent announcement that it intends to compel the courts to ensure that each parent is able to see their children regularly (or even equally) following a separation or divorce and the Norgrove report which advised against a presumption of equality for parents.

So who is right?

The Department for Business, Innovation and Skills (BIS) will fund mediation training for employees from a group of 24 SMEs in each pilot area later this year. A network of trained mediators will be available to provide mediation to other organisations in their respective network.

An open tender to deliver the mediation training for prospective candidates has been published on the Contracts Finder website. The 24 SMEs in each area will be identified and selected later in 2012, once the mediation training contract has been awarded.

It is hoped that the pilot scheme will help to resolve workplace disputes before they escalate and need to be resolved at an employment tribunal.

Since coming to power, the Government has made it clear that it intends to create more opportunities for workplace disputes to be resolved outside the tribunals, and this pilot scheme is a further step in this direction. In November 2011, the Government published its official response to its Resolving Workplace Disputes consultation on reforming the employment tribunal system and announced that it intended to introduce a requirement for all potential tribunal claims to be lodged with Acas, so that parties have the opportunity to resolve their dispute through early conciliation. Click here for more details.

The pilots will run for 12 months and, if successful, the Government may introduce similar schemes in other parts of the country.

From 1 October 2012, and depending on the size of the PAYE scheme, employers will have to enrol eligible employees automatically into a qualifying workplace pension scheme or the National Employment Savings Trust (NEST). Employers will also have to make mandatory contributions.

Under the scheme, employers will be given a “staging date” from which they must auto-enrol eligible employees if they are using a defined-contribution scheme or NEST as their qualifying workplace pension scheme.

On 25 January 2012, the Government published a revised auto-enrolment staging timetable. Click here to see the new timetable. The publication of the new timetable follows the Government’s announcement in November 2011 that small businesses with fewer than 50 employees would begin auto-enrolment in May 2015, instead of April 2014. (Click here for further details.) Under the revised timetable, there will be no change to the staging dates of employers with 250 or more employees. All existing businesses will have enrolled their staff by April 2017, followed by all new employers by February 2018.

The Pensions Regulator has published some useful information on auto-enrolment on its website. Click here.

If you have any concerns about how auto-enrolment will affect your business, please contact me at michael.delaney@mablaw.com.

In November 2011, the transport Minister Norman Baker launched the ‘Anywhere Working’ consortium, with its purpose being to enable employers to understand the benefits of flexible working. The consortium aims to help organisations achieve greater productivity, reduce employee stress and absenteeism, and reduce carbon emissions generated by business travel.

The Anywhere Working consortium is backed by big businesses (including Business in the Community, Microsoft, Nokia, Nuffield, Vodafone and Regus) and The Trades Union Congress.

On 16 January 2012, the consortium set up a new portal (click here) which contains a number of resources for employers and employees, including training, guidance, case studies and product offers. Organisations can also use the portal’s Savings Calculator to measure how much time, money and carbon energy they can save by working more flexibly.

The consortium is holding an ‘Anywhere Working Week’, beginning on 27 February 2012, and will provide additional guidance to organisations to help them learn more about flexible working and how it can benefit them and their workforce.

The EU Parental Leave Directive, which comes into force on 8 March 2012, increases the minimum parental leave provision from three to four months. Although member states should implement the Directive by 8 March 2012, member states can take an extra year for implementation if required.

BIS has said that it will utilise the additional year’s grace and will implement the changes in March 2013.

To find out what is changing in employment law in 2012, please click here.

When the government announced this change in October 2011, it did not confirm whether it would affect existing employees (who may already have qualified for unfair dismissal rights) or just new joiners.

The Department for Business, Innovation and Skills (BIS) has now confirmed that the regulations that will implement the change will, subject to Parliamentary approval, state that the new two-year qualifying period will only apply to employees whose employment begins on or after 6 April 2012. Employees who are already in employment before that date will retain the current one-year qualifying period.

The Government estimates that the change will save businesses £6m per year, with a reduction of 2,000 unfair dismissal claims per year.

For further details of other employment law changes taking place in 2012, please click here.

Many of these volunteers will be employees, so, in order to minimise the impact their absence may have on workplace productivity, Acas has advised employers to start talking to them now so suitable arrangements can be made.

To help employers, Acas has issued new guidance on employers’ legal obligations to employees who wish to fulfil their volunteering commitments. This provides advice on the following key questions which will inevitably arise during discussions between an employer and employee:

1. Three of my staff have got volunteer positions at the Olympics. I can only let one go. What’s the best way of handling this?

2. I have a member of staff who has got a volunteer place at the Olympics. Do they need to use their own holiday?

3. I have a member of staff who has got a volunteer place at the Olympics. Am I expected to pay for them while they volunteer?

To read this guidance (and answers to the above questions), please click here.

Statistics have revealed that depression affects approximately one in six people (and is more common in women) and it is therefore vital that employers take the necessary action to assist employees who are suffering from stress and depression, and avoid inadvertently breaking the law.

To read the full article, please click here. You may need to register to read the article in full.

If you would like to discuss the issue of depression in the workplace and what your legal rights and/or obligations are, please contact me at rebecca.fox@mablaw.com.

The note provides an overview of what Build Now, Pay Later is, the advantages it brings to housebuilders, and the terms which government departments will ask developers to bid on when they are disposing of their land.

The Build Now, Pay Later scheme is intended to make it easier for developers to manage their development cash flow, as they do not have to pay upfront for the government-owned land. Housebuilders will pay for the land after they have started work on the new homes, meaning that they can start building immediately.

The scheme has been launched in conjunction with the Government’s decision to release public sector land for housebuilding, with the aim of building 100,000 new homes by 2015. The need for new homes is urgent, as recent figures have revealed that housebuilding is now at its lowest levels since the 1920s (click here for more details.)

In its note, the Government has admitted that Build Now, Pay Later is not appropriate for all sites, and will tend to be more beneficial on larger more complicated sites which will require significant capital investment to unlock.

There are two Build Now, Pay Later models: Phased Payments and Risk Sharing.

The Phased Payments model is where the land value or base price is apportioned across a number of phases with specified dates for when payments will be made. The housebuilder bears less initial risk, as payments are linked to completed or sold phases. The timing of payments and percentage of land value paid on completion of each phase can be varied to suit the risk characteristics of the site.

The Risk Sharing model allows housebuilders to share the risk and reward from the movement in house prices and the subsequent revenue generated. However, the risk of fluctuations in development costs will be borne by the housebuilder.

Increasing housebuilding is one of the Government’s key objectives in its Growth Review, and it is also hoped that the Build Now, Pay Later will create and sustain thousands of jobs in the construction sector.

When a person dies “intestate” (i.e. dies without leaving a valid Will that disposes of the deceased’s estate), the distribution of that person’s assets (or “estate”) among surviving family members is governed by the intestacy rules. However, the intestacy rules, which date back to 1925, have not been comprehensively reviewed for more than 20 years and the Inheritance (Provision for Family and Dependants) Act 1975 has not been vigorously reviewed since it was enacted, although it does now cover cohabitants, civil partners and same-sex cohabitants.

The Law Commission’s recommendations are included in two draft Bills: The draft Inheritance and Trustees’ Powers Bill and the draft Inheritance (Cohabitants) Bill.

The draft Inheritance and Trustees’ Powers Bill includes provisions that would do the following:  

1. Ensure that the assets of a married couple or a couple in a civil partnership will pass on intestacy to the surviving spouse in all cases where there are no children or other descendants;

2. Amend the legal rules which currently disadvantage unmarried fathers when a child dies intestate;

3. Simplify the sharing of assets on intestacy where the deceased person was survived by a spouse and children or other descendants;

4. Protect children, who lose a parent, from the risk of losing an inheritance from that parent if they are adopted after the parent’s death;

5. Remove obstacles to family provision claims by dependants of the deceased and anyone treated by the deceased as a child of his or her family outside the context of a marriage or civil partnership;

6. Permit a claim for family provision in certain circumstances where the deceased died “domiciled” outside of England and Wales, but left property and family members or dependants in the UK; and

7. Give all trustees more flexible statutory powers over the trust’s income and capital (subject to any express provisions in the trust instrument.)

The draft Inheritance (Cohabitants) Bill gives certain unmarried partners who have lived together for five years the right to inherit on each other’s death in the event that one of them dies intestate. In instances where the couple have a child together, this entitlement to inherit would accrue after just two years’ cohabitation, provided that the child was living with the couple when the deceased died. An application to the Court under the Inheritance (Provision for Family and Dependants) Act 1975 would therefore not be required.

This change, if implemented, would give unmarried couples similar rights to married couples in instances when one person dies without leaving a Will. With an estimated 2.3m unmarried couples living together (a figure expected to rise to 3.8m by 2033), the recommendations reflect the fact that cohabitation is much more prevalent in the UK than it was 25 years ago.

However, there is of course one easy solution to the problems of intestacy: make a Will and ensure that it is regularly updated.

This new Act repeals and consolidates all charity legislation: the Recreational Charities Act 1958, the Charities Act 1993 and many of the provisions of the Charities Act 2006. However, it does not change the law.

The reason for the consolidation is that charity legislation has long been criticised for being disparate and hard to understand; a new Act that consolidates charities legislation in one place was seen by the Government as a way of making charity law more accessible to the general public and third-sector organisations.

However, this is not the end of the story.

A review of the Charities Act 2006, led by Lord Hodgson, will also take place in 2012 and will consider substantive changes to the law. The review will look at a range of issues, including the definition of “charity” and the role and status of the Charity Commission as the sector’s regulator, and will consider whether the Act is still “fit for purpose” five years after it was passed. Click here for full details.

Any legislative change is likely to be some way off, with Lord Hodgson expected to complete his review by summer 2012 and then to submit a report on it to Parliament before the summer recess.

Under these Regulations, a tenant will have the right to ask their landlord to allow a competitor electricity supplier to distribute electricity to him or her via the cables and electricity system in the building.

Previously, it has been usual practice for landlords of multi-tenanted buildings to choose an electricity supplier and simply recharge the tenants the cost of the electricity supply they use (mainly through the service charge or by measuring use through electricity meters.) Tenants have had no right to demand a change of electricity supplier or to ask for their own individual supply. However, from now on, even if there are several tenants in the building, each tenant can potentially ask for a different supplier rather than agreeing to the one chosen by the landlord.

On receipt of a request by a tenant to change electricity supplier, a landlord must respond in writing within ten working days to either (1) confirm that it will provide the tenant’s choice of supplier with the necessary information, or (2) explain why the tenant cannot have a separate supply (e.g. the cabling within the building has insufficient capacity, or that to increase its capacity would have a substantial adverse financial impact on the landlord). The landlord must obtain approval from Ofgem for any charges it seeks from the electricity company for the use of the electricity distribution system in the building.

Considerations for tenants

1. The cost of physically changing the electrical cabling system (or installing additional cabling) must be met by the tenant or electricity company; and

2. Tenants may be able to obtain better electricity deals than those offered by their landlords.

Considerations for landlords

Landlords do not have to do anything until a tenant makes a request for a separate electricity supply. However, if a request is made, they must:

1. Allow electricity companies access to carry out necessary works and to read meters;

2. Install additional infrastructure, if required; and

3. Cooperate in agreeing a ‘switching’ date and a reconciliation of charges between the outgoing and incoming suppliers.

It is prudent for landlords to look at their current electricity supply arrangements, particularly if they have fixed-term contracts at a fixed price, based on previously assumed levels of electricity consumption. It may also be possible for landlords to improve the terms of the existing supply, so that tenants have less incentive to request their own supply.

On the plus side, if a tenant receives a direct electricity supply, that tenant’s electricity consumption will not count towards the landlord’s requirements under the Carbon Reduction Commitment Energy Efficiency Scheme.

Will these new Regulations result in an army of tenants demanding to exercise their new right to change electricity supplier? Probably not – tenants are likely to be deterred by the prospect of high infrastructure and installation costs, which will probably outweigh the financial benefits of switching to a cheaper electricity supplier.

The consultation paper contains two options for consideration:

Option one: an initial fee of between £150 and £250 for a claimant to begin a claim, with an additional fee of between £250 and £1250 if the claim goes to a hearing, with no limit to the maximum award; or

Option two: a single fee of between £200 and £600 – though this would limit the maximum award to £30,000 – with the option of an additional fee of £1,750 for those who seek awards above this amount.

In both options, the employment tribunal would be given the power to order the unsuccessful party to reimburse the fees paid by the successful party. At a time when employment tribunal claims are rising rapidly, the Government hopes that a fee system will encourage both sides to mediate or at least give more consideration to the strength of their case prior to launching legal action, thus saving time and (particularly) taxpayers’ money.

The Government says that introducing fees will bring employment tribunals into line with the civil courts, where claimants already pay a fee to use the service.

When the Government first mooted the idea of fees, there were concerns that those people who could not afford the fees would no longer have access to justice. Click here for more details. However, the Government has now allayed these fears, stating that it will fund a system of fee remissions (or waivers) for those who cannot afford to pay, in a similar way as the civil court system.

The consultation will close on 6 March 2012, with a view to introducing the fees in either 2013 or 2014. The date is dependent on which option the Government decides to adopt. If, following this consultation, the Government decides to implement option 1, fees would be introduced in 2013. If it decides to implement option 2 , it would require primary legislation, which would probably not be passed until 2014.

Automatic enrolment was introduced for all employees who meet certain qualifying criteria, in an attempt by the Government to encourage more people to save for their retirement. The scheme was due to be phased in for all employers over a four-year period, with the implementation dates dependent on the number of employees that an employer has.

However, the Government has recently announced that small businesses – defined as those employers who have fewer than 50 employees - will be given additional time to prepare for the implementation of auto-enrolment.

Under the revised timetable, small businesses will have to automatically enrol their staff into a pension scheme in May 2015, instead of the April 2014.

Pensions minister Steve Webb announced in Parliament that all jobholders previously “due to be enrolled this side of July 2013 will see no change in their dates.” Based on the Government’s existing implementation timetable, these comments would suggest that auto-enrolment dates for employers with fewer than 3,000 “jobholders” may also be delayed, although no revised date has been announced yet.

The announcement is good news for smaller employers, although larger employers must still comply with the requirements as originally set out in the timetable.

The required employer contribution rate will remain unchanged until all businesses have started auto-enrolment; however, the Department for Work and Pensions has indicated that the increase in the minimum employer contribution rate from 1 per cent to 2 per cent will be delayed beyond its original date of 1 October 2016. We will have to wait and see whether the Government also delays the date on which the minimum employer contribution rate rises to 3 per cent (which is currently 1 October 2017.)

If you have any concerns about how auto-enrolment will affect your business, please contact me at michael.delaney@mablaw.com.

Statutory sick pay will also increase, rising from £81.60 to £85.85 per week from 6 April 2012.

For details of further changes to employment law that will come into effect in 2012, please click here.

I have laid out below the main changes that are currently set to take place over the next 12 months; there are many other changes that are expected in 2012, but no dates have yet been given as to when they will come into force. However, we will discuss the current pending changes during 2012, once we have more information on when they will happen.

March 2012

Parental leave. The Parental Leave Directive 2010 repeals and replaces the Parental Leave Directive 1996. The permitted period of parental leave following the birth or adoption of a child increases from three to four months, and at least one of the four months will not be transferable between parents (i.e. it will be lost if not taken.) Member states have until 8 March 2012 to bring this change into force.

UPDATE (January 2012): The Department for Business, Innovation and Skills (BIS) has said that the increase in parental leave will now take place in March 2013. Click here for more details.

April 2012 (subject to the publication of draft legislation.)

Unfair dismissal. The unfair dismissal qualifying period will increase from one to two years.

Deposit orders. The amount of deposit order an employment tribunal will be able to order a party to pay as a condition to continuing with tribunal proceedings will increase from £500 to £1,000.

Costs awards. The maximum amount of costs an employment tribunal can award in favour of a legally represented party (without referring the case to the county court for detailed assessment) will increase from £10,000 to £20,000.

Witness expenses. Employment tribunals will be given powers to order parties to bear the costs of witness attendance; the party who loses the case will have to reimburse the successful party for any such costs that have already been paid out.

October 2012

Pension auto-enrolment. All employers in Great Britain must automatically enrol eligible jobholders into a pension scheme. These new duties will be formally implemented over four years, beginning on 1 October 2012, with larger employers being affected before smaller employers and new businesses. Employers will be able to voluntarily start auto-enrolment as early as July 2012.

If you would like to discuss any of these planned changes, or want to know how they will affect your business, please contact at michael.delaney@mablaw.com.

The Act received Royal Assent in July 2011 (click here for details) and preserves the succession rights of the descendants of a person who:

1. Disclaims (or rejects) an inheritance in an estate; or

2. Forfeits his succession rights by killing the deceased person.

The Act also amends the current law so that the children of a minor are able to inherit their parent’s interest in an intestate’s estate, where the parent died before the age of 18 without having married or formed a civil partnership.

The Act will not apply where a death occurs before the commencement of sections 1, 2 and 3 (i.e. before 1 February 2012.)

Full details of the Act are here.

Employers should ensure that they have the correct workplace policies and procedures in place and that they know their employees’ rights, so that workplace disputes can be avoided.

Full details of Acas’ recommendations are here.

Whilst the number of divorces in the UK is generally on the decrease, divorces amongst the over 60s is on the rise. But why?

I recently had an article published on this issue in Mature Times, and it can be read here.

Following on from the Government’s recent introduction of a new-build indemnity scheme to help purchasers of new-build properties who are struggling to obtain a mortgage, the Council of Mortgage Lenders has said that over the past few months it has received a “steady trickle” of enquiries from local councils who want to be able to offer mortgages to local residents.

But are local councils really able to offer mortgages?

Well, actually yes. Despite what most people may think, local councils are able to offer mortgages without having to register with the Financial Services Authority, which regulates mortgage lending.

And they used to be popular.

During the 1960s, 1970s and early 1980s, thousands of homeowners had mortgages with their local councils. Local councils were able to offer cheap mortgages, mainly because they could borrow money at rates that were only slightly higher than those available to the UK Government; however, by the mid-1980s these loans became less attractive when mortgage finance became more readily available from banks and building societies.

And it also appears that established lenders are prepared to work with local councils in offering mortgages.

In March this year, fifteen local authorities across the UK agreed to put money into a Lloyds TSB scheme – entitled Local Lend a Hand – to increase the deposits of first-time buyers trying to buy a home in their areas; in some cases, first-timers have been able to buy a home with a deposit of as little as 5 per cent.

Borrowers can be rest assured that if they take out a mortgage with their local council and fall into arrears, the local council must uphold the FSA’s Treating Customers Fairly requirements (as any bank or building society would have to.)

Whether the local council mortgage makes a full national comeback remains to be seen, but for homebuyers in certain parts of the country it could be a viable option.

In its recent second annual report on the competitiveness of the UK tax system, the Institute of Directors (IoD) has suggested that capital gains tax and inheritance tax should be merged in order to help simplify the UK tax system (much in the same way as the integration of income tax and national insurance would do.) The IoD suggests that capital gains tax should be charged on those assets held at death above a fixed and “reasonably generous” (but unspecified) threshold, and that inheritance tax could then be abolished. Its full proposals are here (see page 26.)

This is not the first time that the IoD has put forward suggestions to change the tax system – in 2007, an IoD discussion paper called for the abolition of capital gains tax and inheritance tax – and it is an idea that has been mooted by others for some time.

Following on from Spain’s possible prosecution at the hands of the European Commission for discriminating against non-residents, the Commission has now referred the Netherlands to the European Court of Justice (ECJ) for discriminatory rules on inheritance and gift duties, after it failed to amend its laws following a formal request in September 2010. Under Dutch legislation, country estates located in the Netherlands are fully or partially exempt from succession and gift duties if they are open to the public, while inheritance or gifts of country estates in other European Economic Area (EEA) States are taxed on 100 per cent of their market value. The Commission considers the difference in tax treatment to be contrary to the free movement of capital.

It is interesting, though, that UK inheritance tax laws in this area could themselves be potentially discriminatory. The UK offers a conditional exemption tax incentive (which is not limited to land in the UK) to historic houses that are open to the general public. Inheritance tax and/or capital gains tax is not paid when the qualifying property (or historic item, such as a painting or sculpture) passes to a new owner on death or is gifted. However, according to HM Revenue and Customs’ (HMRC) memorandum on ‘Capital Taxation and the National Heritage’, in order to obtain the exemption, the new owner must agree to look after the item/property, keep it in the UK if it is moveable, and allow “reasonable” public access to it. HMRC’s stipulation that public access to the property should be “reasonable” means that the relief cannot realistically be given to property or land outside the UK.

Not that the Government will be overly concerned about this.

With the EU currently threatening to sue the UK over its recently-signed tax agreement with Switzerland unless the Chancellor renegotiates it, the Government has more pressing things to worry about.

The introduction of a new-build indemnity scheme, aimed at increasing the supply of affordable mortgage finance for new-build homes will be welcomed by cash-strapped first-time buyers with little savings. The scheme will be available to all potential buyers, subject to appropriate mortgage underwriting criteria, except buy-to-let investors and second home owners.

Under the scheme, homebuyers will be able to purchase a new-build house or flat with only a five per cent deposit. Housebuilders and the Government will contribute up to 95 per cent of the cost of the home to an indemnity fund, which will be used to pay out to a lender if a buyer defaults and where there is a shortfall if the property is repossessed.

The scheme is open to all housebuilders and all lenders operating in England. Mortgages will be available under the scheme from March 2012.

According to the Government, the following lenders have agreed in principle to participate in the scheme: Barclays, HSBC, Lloyds Banking Group, Nationwide, RBS, Santander and Yorkshire and Clydesdale Banks.

The Government has also confirmed that more than 25 homebuilders have agreed in principle to participate in the scheme: Barratt Developments, Crest Nicholson, McCarthy and Stone Retirement Lifestyles, Bellway, Fairview New Homes, The Miller Group, Bloor Homes, Galliford Try, Persimmon, Bovis Homes Group, Gladedale Group, Redrow, Taylor Wimpey, Antler Homes, Grainger, Stewart Milne, Aquinna Homes, Jones Homes, Places for People Group, Banner Homes Group, Morris Homes, Strata Homes, CALA Group, Nicholas King Homes, Urban Renaissance Villages Ltd, Croudace Homes Group, Octagon Developments, William Davis, and Heyworth Developments

Also, social housing tenants will encouraged to buy their homes after the Government offered them up to a 50 per cent discount under the Right-to-Buy scheme.

However, as expected, the Government confirmed that the stamp duty land tax relief for first time buyers will end on 24 March 2012, as planned. The loss of this relief is disappointing. Although the Government said that the relief had been “ineffective” in increasing the number of first-time buyers entering the property market, it is highly probable that there would have been fewer first-time buyers if it hadn’t been in place.

The Business Secretary Vince Cable outlined the Government’s plans in a speech at the Engineering Employers’ Federation last week; there is some cross-over between these proposals and the ones laid out in the plans to reform the employment tribunal system. The key proposals are as follows:

1. Requiring complaints to be submitted to Acas for pre-claim conciliation before an employment tribunal claim can be issued;

2. Introducing “protected conversations” to allow employers to raise workplace issues “in an open way, free from the worry it will be used as evidence in… tribunal”. Further details are here.

3. Simplifying compromise agreements;

4. Creating a “Rapid Resolution Scheme” for “more straightforward” employment disputes, such as over holiday pay, so eliminating the need for expensive tribunal hearings’;

5. Carrying out a review of employment tribunal rules;

6. Introducing different fees for different types of employment tribunal claims. The Government will publish a consultation paper on introducing fees for tribunal claims, seeking views on (1) a system involving the payment of a fee to lodge a claim, and a second fee to take that claim to a full hearing; and (2) a £30,000 threshold, so that claimants seeking an award of more than this figure will need to pay a higher fee;

7. Amending whistleblowing legislation to prevent employees from being able to “blow the whistle” about breaches to their own employment contracts, which the Government says is not something that the legislation was designed to achieve;

8. Increasing the unfair dismissal qualifying period from one to two years;

9. Improving Criminal Records Bureau (CRB) checks by making them instantly accessible online. From 2013, once a CRB check has been completed, the results will be made available online for employers to confirm that no new information has been added since the check was originally conducted’;

10 Simplifying the UK’s recruitment sector by reducing complex rules on employment businesses and agencies;

11. Reviewing the Agency Workers Regulations 2010 in 18 months’ time;

12. Simplifying the 17 pieces of National Minimum Wage legislation into one set of regulations;

13. Extending the right to request flexible working to everyone; and

14  Creating a more modern system of parental leave so that it becomes “shared and flexible parental leave”, thus reflecting the greater involvement of fathers in childcare.

The Government will also look at doing the following:

1. Reducing collective redundancy consultation periods from 90 days to 60, 45 or 30 days;

2. Simplifying the TUPE Regulations, which may be overly bureaucratic and “unnecessarily gold-plate” the EU Acquired Rights Directive. It has launched a call for evidence that is open until 31 January 2012;

3. Introducing a “compensated no-fault dismissals” for micro-businesses (i.e. those with 10 or fewer employees.) The Government will seek views on a proposal to introduce no-fault dismissals for these companies;

4. “Radically slimming down” the existing dismissal procedures, potentially by changing the Acas Code of Practice on Disciplinary and Grievance Procedures; and

5. Merging the national minimum wage legislation into one consolidated set. 

It has been well documented that there has been a lot of wrangling within the Coalition Government over how far workers’ right were hindering job creation, and compromises have been made by both Conservative and Liberal Democrat cabinet ministers. This package of proposed reforms reflects the Prime Minister’s and Mr Cable’s belief in deregulation and employers will welcome them. However, Liberal Democrat supporters will question whether a loss of workers’ rights will heighten employees’ fears at a time when unemployment is still rising.

It has now finalised the proposals that will form the basis of its “radical” legislative and policy change. These include the following:

1. Unfair dismissal. The Government intends to increase the qualification period for unfair dismissal protection from one to two years. It is hoped that this will improve business confidence in hiring people and thereby boosting economic growth;

2. Compromise agreements. The Government will create a “standard text” and guidance for parties to use in compromise agreements. It will consider amending the Employment Rights Act 1996 to enable compromise agreements to cover all existing and future claims without the need for a full list of causes of action; it will also change the name of compromise agreements to “settlement agreements” in primary legislation;

3. Protected conversations. The Government will launch a consultation next year to look at the introduction of a system of “protected conversations” that would allow either employers or employees to initiate a discussion about an employment issue. Further details are here;

4. Mediation and early conciliation. The Government intends to introduce a requirement for all potential tribunal claims to be lodged with the advisory service Acas, so that parties have the opportunity to resolve their dispute through early conciliation. The early conciliation period will be set at one month; if this offer of conciliation is refused or is unsuccessful, the claimant will be allowed to lodge his or her claim with the employment tribunal;

5. Modernising employment tribunals. The outgoing President of the Employment Appeals Tribunal, Mr Justice Underhill, will review the Employment Tribunal Rules of Procedure, and, by 30 April 2012, produce  a streamlined procedural code that will make the Rules less complex and unwieldy. The Government will also increase the limit for deposit orders from £500 to £1,000 and for costs orders from £10,000 to £20,000;

6. Financial penalties. The Government intends to introduce a discretionary power for employment tribunals to impose a financial penalty on employers, payable to the exchequer, who lose a claim. The financial penalty will be half of the total award made by the employment tribunal, with a minimum threshold of £100 and a maximum ceiling of £5,000. A penalty will be reduced by 50 per cent if payment is made within 21 days. An employer can appeal against the imposition of a financial penalty.

7. Rapid Resolution Scheme. The Government will launch a consultation on how to introduce a scheme that would be an alternative to the tribunal process and would provide quicker, cheaper determinations in low value, straightforward employment claims (e.g. holiday pay) with the intention of saving time and money. This scheme may not involve judges or oral hearings.

The Government is obviously determined to bring about a change in workplace culture. However, whilst it is promoting new ways of quickly resolving employment disputes (without the need for an employment tribunal hearing), it is questionable how successful these will be and whether Acas could cope with the extra workload.

There is a real risk that the changes may not benefit either employees or employers: employees may feel that these changes will reduce their ability to seek redress when their employment rights are breached, whilst employers may be faced with more regulations and red tape.

In March 2011, the Office of Tax Simplification (OTS) published its interim report on the simplification of the tax treatment of small businesses. In it, the OTS recommended that the income tax and NICs regimes should be amalgamated and that the Government should begin work towards this objective by the end of 2011.

Following the Government’s call for evidence on the matter in July 2011, it became obvious that there was a real desire for reform, with the majority of respondents stating that there are potential gains to be made from aligning income tax and NICs. Respondents recommended that (1) the system for calculating NICs should be altered to reflect how income tax is calculated, and that (2) the same employee earnings should be made subject to the calculations for both taxes.

However, any reform will take time (and will only happen if the benefits outweigh the costs of making the change.)

The Government intends to work with stakeholders over the next few months, with a view to identifying high level options for reform by Budget 2012. Even if this happens, the Government has predicted that, due to the number of consultations on reform that would have to take place and the need to give employers sufficient time to prepare for a new tax system, any reform would probably not take place until 2017. Also, it appears that any reform will focus on alignment, simplification or operational integration rather than a complete merger of the two regimes.

In the past, governments have steered away from merging or integrating income tax and NICs, so it is surprising that reform is now a real possibility. However, the Government has accepted that there could be winners and losers even if there is just an integration of income tax and NICs, so it will need to fully investigate the impact any reform could have on individuals before deciding to proceed.

The Government has also published a discussion paper that outlines its proposals for simplifying the administration of personal taxes, by making tax information more accessible to taxpayers. It believes that online and mobile technology can help to improve taxpayer awareness of their tax liabilities. The discussion paper looks at systems in other countries, where taxpayers are able to access (and input) their own tax information online throughout the tax year. HM Treasury’s view is that a system that encourages greater taxpayer engagement also encourages greater taxpayer compliance.

Interesting times…

In its coalition agreement, published in July 2010, the Government stated that there was an urgent need to reform the social care system, so that individuals and carers had more control over care. Consequently, the Government set up a Commission on the funding of long-term care, led by the economist Andrew Dilnot, which investigated alternatives for funding long-term care.

After launching a call for evidence on ideas for a future social care funding system in December 2010, the Commission published its report containing the following recommendations:

1. Capping individuals’ lifetime contributions towards their care costs – which are currently potentially unlimited – to between £25,000 and £50,000, but ideally around £35,000. After the cap is reached, individuals would be eligible for full state support;

2. Means-tested support should continue, but the asset threshold, above which people are liable for their full residential care costs, should increase from £23,250 to £100,000;

3. Individuals should contribute a standard amount of between £7,000 and £10,000 to cover their living costs;

4. National eligibility criteria for social care service entitlement should be standardised, and a more objective eligibility and assessment framework should be developed by the Government;

5. Carers should be supported by improved assessments, which aim to ensure that the impact on the carer is manageable and sustainable;

6. The Government should run an awareness campaign to help people understand the system and to encourage people to plan for later life;

7. Those individuals who have entered adulthood with a care and support need should immediately be eligible for free state support, rather than being subjected to a means test; and

8. Local authorities should have sufficient government funding in order to implement these reforms.

The Dilnot Commission estimates that its proposals – based on a cap of £35,000 – would cost the State around £1.7bn per year. It believes that the combination of a cap on contributions and the higher means-tested threshold would ensure that individuals going into residential care would not have to spend more than 30 per cent of their assets on their care costs. Currently, some people can lose over 90 per cent of their assets.

The Government plans to consult on social care reform before publishing a progress report and White Paper in spring 2012.

Whilst the report is welcome and the Health Secretary, Andrew Lansley, described it as an “immensely valuable contribution”, we are in an era of public sector spending cuts and the Government will be aware of the significant costs (and year-on-year increases) of reforming the system and supporting an ageing population. Consequently, major change may still be some years away.

For the foreseeable future, individuals must consider the financial implications of meeting their care home costs and ensure that they protect their assets through careful tax and estate planning. If you would like to discuss your options, please contact me at iain.donaldson@mablaw.com.

Inheritance and gift tax in Spain are regulated at both state level and at the level of autonomous communities (i.e. local level.) Spain has 17 autonomous communities (or “Comunidades Autonomas”) and each has a territorial basis, their own government and Parliament, and broad legislative and executive powers. This legislation grants Spanish residents a number of tax benefits that, in practice, allow them to pay much lower taxes than non-residents. Consequently, Spain has been referred to the European Court of Justice on the grounds that this practice goes against the principle of free movement of people and capital within the EU, and breaches the Treaty on the Functioning of the European Union.

This is not the first time that Spain has been in trouble over this issue. In May 2010 and February 2011, the European Commission requested Spain to amend its legislation so that it complied with EU rules on inheritance and gift tax provisions. However, although Spain “tweaked” its laws, no satisfactory amendments have yet been made.

It remains to be seen how Spain will respond to the threat of legal action, and whether it will now satisfactorily change its inheritance and gift tax laws. According to the European Commission, approximately 95 per cent of infringement cases are resolved before they reach the European Court of Justice, so we shall wait and see…

The aim of the review is to:

* Understand how the Act is operating in practice;

* Assess how effective it is; and

* Determine whether the legal and regulatory framework for charities in England and Wales is fit for purpose, now and in the future, and whether further improvements could be made.

The Charities Act 2006 made a number of changes to the legal framework for charities, but Parliament agreed that the Act should be reviewed after it had been in force for five years, so it could assess whether it was an effective piece of legislation.  

The review’s Terms of Reference include 14 specific issues that need to be considered, which were brought to the attention of the Government by the charity sector, lawyers and other interested parties. These include the following:

1. The definition of “charity” and the changes made by the Act in relation to the public benefit requirement;

2. The licensing regime for public charitable collections – are the Act’s provisions workable and do they represent value for money?;

3. UK cross-border issues;

4. Self-regulation of fundraising (as delivered by the Fundraising Standards Board (FRSB));

5. The success of the First-tier Tribunal (Charity), particularly the range of Charity Commission decisions that are appealable to, or reviewable by, the Tribunal;

6. Measures to reduce bureaucracy on charities;

7. The objectives, functions and structure of the Charity Commission, including relevant recommendations from its strategic review;

8. Measures to facilitate social investment or “mixed purpose” investment by, and into, charities;

9. The operation of the charity merger provisions in the Act;

10. Exempt charities, including the policy approach to the regulation of exempt charities;

11. The transparency and accountability of the charity sector, including current accounting and reporting/audit procedures;

12. Thresholds for registration of charities, including the £5,000 general registration threshold and the £100,000 registration threshold for excepted charities;

13. The effectiveness of organisational forms available to charities, including the Charitable Incorporated Organisation; and

14. Methods of supporting and encouraging individuals to volunteer as trustees, recognising concerns about trustee liability.

Full details are here.

Lord Hodgson is to publish a call for evidence from charities and other stakeholders in due course. He aims to complete his review before summer 2012, and a report will then be laid before Parliament.

The change was initially mentioned by the Deputy Prime Minister late last month, when he unveiled a raft of new measures designed to reduce bureaucracy and restrict inspection for businesses.

Under the proposals, employers and employees could, at either’s request, have frank discussions about issues such as underperformance and retirement plans. These conversations would be inadmissible in employment tribunal proceedings.

The announcement will be welcomed by business groups, which have long called for the introduction of protected conversations as a means of informally resolving workplace disputes.

The Prime Minister also reiterated that the Government will be increasing the qualifying period for unfair dismissal claims from one year to two years from 6 April 2012. Click here for full details.

Also, from 6 April 2013, employees will have to pay £250 to apply for an employment tribunal hearing and a further £1,000 if a hearing is granted. The money will be refunded if the claimant is successful, but will be forfeited if they lose. Click here for full details. Since the announcement, the Government has said that “poor claimants” will not have to pay the fees, although we are still awaiting clarification as to how a claimant qualifies as being “poor.”

It has not yet been confirmed when the consultation on protected conversations will take place.

These changes could affect all commercial property owner-occupiers and investors.

HMRC intends to do the following:

1. Require all taxpayers to claim capital allowances within one or two years of when the money was spent, or no capital allowances claim will ever be allowed for any current or future owner. This will apply to all new construction expenditure (e.g. new-builds, extensions, refurbishments, etc) as well as purchases of second-hand property. Historic expenditure made before April 2012 is also likely to be subject to the new rules.

2. Require the buyer and seller of a second-hand building including fixtures to submit a formal ‘Record of Agreement’, showing how much of the purchase price is attributable to the fixtures (and notify this to HMRC within one or two years.)

If these changes do go ahead, buyers of plant and machinery fixtures will need to ensure that they notify HMRC of the expenditure within the required time limit in order to claim capital allowances. Also, the buyer and the seller will have to agree on the sale value of the fixtures within the requisite time period if the buyer is to be able to claim capital allowances in relation to the fixtures.

Draft legislation will be included in the Finance Bill 2012, with the changes expected to take effect from April 2012.

As a matter of urgency, if you have not yet claimed for fixtures, or believe that capital allowances might have been under-claimed, please contact either me at david.marsden@mablaw.com, or our property tax specialist Shimon Shaw at shimon.shaw@mablaw.com, as any additional claim should be made before the rules change in April 2012.

The couple had been married for over 25 years and had two adult children. Some years ago the wife had a windfall of some £500,000 on the lottery. She used part of these funds to purchase a home for herself and her family, including her husband. He lived in the family home for about three years and the couple then separated.

Within the divorce proceedings, Mr Mostyn was asked to decide whether the lottery win was a matrimonial asset or not. If it was, arguably it was available for division in the usual way with the starting point being a 50:50 split. If not, then arguably it could be ring-fenced.   

The Judge decided that at the time it was received it would have been a non-marital asset, but that immediately it had been used to purchase the family home, that element of the windfall had been converted into a marital asset. Luckily for the wife, the Court used its discretion to take into account the fact that the husband had made no contribution to this asset and had only lived in the house for three years. He was therefore awarded only £85,000 out of a potential £500,000 asset. 

The question is, where does this leave us?  

The case seems to suggest that if the wife had not used the money for her family, she would have been able to retain the money on divorce. Taking it one step further, does it not suggest that a husband using money to gamble - rather than to provide for his family - could then benefit from the subsequent windfall at the expense of his family? Even more concerning, does it not suggest that whilst the legal profession are doing their best to avoid conflict, this decision rather suggests that the arguments over who should be financially responsible for the family should start whilst they are still happily married?

This important judgment has understandably provoked a lot of interest and concern amongst lawyers and the general public alike (particularly if you happen to be a lottery winner!)

Following the publication of the judgment, I was asked by The Daily Telegraph newspaper to comment on the decision (click here to read it) and on Tuesday 18^th October discussed the case and its implications with Vanessa Feltz on her BBC London radio show.

We will have to wait a while to discover the full consequences of this ruling, but it may very well encourage individuals to keep their assets separate from their spouses/partners.

If you have any concerns about non-matrimonial property and/or how the judgment may affect you, please contact me at amanda.melton@mablaw.com.

Well, the county of Cornwall will shortly launch a scheme of its own.

Their scheme is similar to FirstBuy, but is tailored to Cornwall only. Rather than seeking contributions from developers through section 106 agreements, Cornwall Council will offer the developer the option to sell homes at a discount of up to 40 per cent. This discount will then be passed over to the Council as an equity loan to the purchaser. (First-time buyers would have to take out a mortgage to cover the rest of the cost.) When the home is eventually sold, the Council would be repaid this percentage of the market value by the homeowner. This money will then be used to help other purchasers in the county.

The Council has said that the new scheme will also enable small and local developers to get involved (rather than just volume housebuilders, who are predominantly used in the FirstBuy scheme.)

Any scheme to help first-time buyers and housebuilders should be supported, and Cornwall Council is showing that local authorities can get involved in helping local people.

Although the Equality Act 2010, which came into force on 1 October 2010, implements the principle that men and women should receive equal pay for equal work, there is still a significant gender pay gap: women who work full time are paid on average 10 per cent less than men in the public sector, and 19.8 per cent less in the private sector.

The new guidance will assist private sector and voluntary organisations that want to address gender equality issues, but who are unsure about how to proceed. It provides practical advice on tackling inequality between men and women in the workplace and gives information about the Government’s new voluntary initiative “Think, Act and Report.”

Although employees face difficulties in enforcing the law, comprised with the fact that most equal pay claims are currently brought in the public sector, private sector employers should not be complacent – there are several reasons why private sector employers may soon be facing multiple equal pay claims:

1. Employees are more aware of the equal pay gap following the introduction of the Equality Act 2010;

2. The Equality Act 2010 has made it easier to bring equal pay claims;

3. The Equality and Human Rights Commission has taken a number of steps aimed at addressing the gender pay gap, including a code of practice on equal pay, and employers need to be aware of these; and

4. “No-win no-fee” lawyers are now more active in the private sector.

To avoid any potential claims, employers should identify whether potential gender pay disparities exist within their businesses and act accordingly.

If you have any concerns regarding equal pay, or anything else employment-related, please contact me at michael.delaney@mablaw.com.

EPCs provide information on how energy-efficient a building is and make recommendations on how to reduce that building’s energy use and carbon dioxide emissions.

Subject to Parliamentary approval, the Government intends to make the following changes:

1. The duty to commission an energy performance certificate (EPC) before marketing a property will be extended to the sale and rent of residential and non-residential buildings;

2. The current 28-day period within which an EPC should be obtained using “all reasonable efforts” will be reduced to 7 days. (However, there will be an additional 21-day period during which the EPC can be obtained if it has not been secured within the initial 7-day period);

3. The requirement to include an EPC with written particulars will apply to all residential and non-residential buildings, whether offered for sale or rent. It will not be possible to only include the asset rating;

4. The powers of Trading Standards Officers (TSOs) will be increased so that they can force estate agents and letting agents (and not just landlords or building owners) to prove that an EPC has been commissioned and to produce a copy of it for inspection. This will mean, for example, that TSOs will be authorised to require estate/letting agents to produce evidence that an EPC has been commissioned in circumstances where they are marketing a building without one;

5. An air-conditioning inspection report (if required) will have to be lodged on the central EPC register. (This will no longer be voluntary); and

6. Regulation 5 of the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007 will be amended to make it clear that the provision of the EPC cannot be delayed until shortly before the parties enter into a contract for sale or rent.

These changes were supposed to have been implemented in two stages – on 1 July 2011 and 6 October 2011, so we will have to wait and see whether the Government sticks to its new April 2012 date. It certainly seems strange that the Government is pressing ahead with these changes in spite of their stated intention to reduce the burden of red tape on businesses.

In the paper, the RICS suggests that a home’s sustainability features should be reflected in its market value. Consequently, when assessing a property, residential property valuers will need to be fully aware of both sustainability policy and each building’s “sustainability characteristics”, such as its energy efficiency rating; the materials used in its construction; its energy-efficient features; its proximity to public transport links; and its potential to be adapted to occupiers’ changing needs in the future.

The launch of the paper indicates that sustainability is likely to become an increasingly important factor in residential property valuation.

1. The unfair dismissal qualifying period will rise from one year to two years; and

2. Fees will be introduced for employment tribunal claims.

Since the speech, the Department for Business, Innovation and Skill (BIS) has confirmed that the change to unfair dismissal law will take effect on 6 April 2012. However, as yet, no further detail has been given. The Government claims that increasing the period to two years will help to reduce the number of unfair dismissal claims by approximately 2,000 per year, saving businesses £6m per year.

Fees for claimants lodging employment tribunal claims are expected to be introduced from 6 April 2013. The introduction of the fees are an attempt by the Government to reduce the number of “vexatious” claims which cost employers millions of pounds each year. Details of how much the fees will be set at are expected to be included in a consultation paper, due to be published by the end of November 2011. There have been reports in the press that employees will have to pay £250 to apply for a tribunal hearing, and pay a further £1,000 if a hearing is granted. The fees would be refunded if the claimant was successful. However, these are only suggested figures, and we will have to wait for the consultation paper (or further announcements from the Government) to find out for sure.

UPDATE: Since this announcement, the Government has said that “poor claimants” will not have to pay the fees, although we are still awaiting clarification as to how a claimant qualifies as being “poor.”

During the presentation and in the following questions session, there was much debate about Regulation 10 of the Agency Workers Regulations (AWR). This Regulation has the potential to exclude the operation of the AWR in respect of pay. Compliance with the various provisions outlined by Regulations 10 and 11 are essential to avoid the equal treatment provisions in respect of equal pay.

Some temporary work agencies have been putting in place contracts with their agency workers, whom they have placed purporting to amount to a contract of employment wherein such contracts set out minimum rates of pay, location where the agency worker may be expected to work, the expected hours to be worked, nature of the work and a statement to the effect that during periods of absence of any assignment the agency as an employer will pay the agency worker a minimum amount of remuneration. The minimum amount of pay is calculated by reference to Regulation 11 and will generally be not less than 50 per cent of the pay paid to an agency worker during a relevant pay period. Furthermore any pay made will not be less than the national minimum wage and any pay due during a period where no work is undertaken must not be less than four weeks’ pay. 

One of the principle issues that have arisen is whether or not a temporary work agency can be an employer for the purposes of satisfying Regulation 10. This is because it is unlikely that such an arrangement would amount to a relationship of employer and employee. This is because based on tests laid down by case law, an employer must be in a position to exercise a sufficient degree of control over the worker, there must be mutuality of obligation and that the provisions of any contract must be consistent with it being a contract of service.

Umbrella companies have also been considering putting in place permanent contracts of employment so as to potentially exclude the operation of the Regulations in respect of pay. Remember umbrella companies are classed as intermediaries under Regulation 4.1.b and are potentially liable for any breaches of the AWR. I made a point during the session that again umbrella companies may find it difficult to persuade an employment tribunal that they are genuine employers. Whilst HMRC readily accept umbrella companies as having employer status, Leading Counsel instructed by us had expressed reservations as to whether or not a temporary work agency or an umbrella company could amount to a proper employer in these circumstances for the purposes of avoiding liability under the AWR.

The response from the floor was that an umbrella company is a proper employer and could put in place contracts of employment so as to exclude obligations insofar as they related to pay under Regulation 10. However, it will almost always be a question of fact in each case as to whether the arrangements put in place with agency workers amount to an employment relationship and not merely a device to get around obligations as to pay under the AWR.

If a temporary work agency or an umbrella company wish to argue that they are true employers, then they will need to satisfy the employment tests which I have referred to above and laid down by iMcKenna J in Readimix Concrete (South East) Limited v Minister of Pensions and National Insurance (1968), which still remains good law and has been cited in a number of recent Court of Appeal decisions.

Furthermore the guidance issued by BIS, published in May 2011, states on page 6 that an individual is not prevented from being an agency worker under the Regulations simply because they work through an intermediary body. It cites the example of an individual working through an umbrella company who finds work through a temporary work agency will normally have an overarching employment contract with the umbrella company with full employment rights.  In such circumstances, according to the BIS guidance, this would not prevent the individual from benefiting from these Regulations.

This is a very grey area which no doubt will be an issue that will come before the employment tribunals for determination in due course.

The guidance applies to high street and online estate agents, property auctioneers, buyers’ agents, and solicitors and online property sites which offer services that count as estate agency work.

The new guidance focuses on two important pieces of legislation: (1) the Consumer Protection from Unfair Trading Regulations 2008, which prohibit traders/estate agents from engaging in commercial practices that are unfair to sellers, buyers, potential sellers and potential buyers of residential property, and (2) the Business Protection from Misleading Marketing Regulations 2008, which prohibit traders/estate agents from using misleading marketing when they advertise services to potential business clients or market commercial property for sale.

The draft guidance seeks to clarify how these two Regulations apply to estate agency work. It contains examples of trading practices that could breach the Regulations, and offers practical steps that businesses can take to comply with the law when they do any of the following:

1. advertise for new business, including through flyers, websites, newspaper advertisements and verbal discussions;

2. provide advice to new clients and take new instructions;

3. market properties, including when property details are put on the Internet;

4. negotiate and make sales; and

5. deal with complaints.

Currently, if you are convicted of committing a criminal offence under the CPRs or BPRs, you could face a fine not exceeding the statutory maximum , which is £5,000 (if convicted in the Magistrates Court), or an unlimited fine and/or imprisonment for up to two years (if convicted on indictment in the Crown Court.)

Also, under the Estate Agents Act 1979, if the OFT deems a business to be unfit to engage in estate agency work, it can issue a prohibition order banning the business from doing so.

The deadline for responding to the consultation is 9 December 2011. After this date, the OFT will publish its final guidance and a summary of the responses received.

1. The Agency Workers Regulations 2010 come into force

The Agency Workers Regulations 2010 (AWR) will establish new rights for temporary agency workers from 1 October 2011.

After a 12-week qualifying period, agency workers will be entitled to “basic working and employment conditions” that are no less favourable than if the worker had been recruited directly by the hirer. These entitlements include pay, annual leave, duration of working time, rest breaks, rest periods, and night work.

NB: The right to equal treatment in relation to pay after the 12-week qualifying period includes fees, bonuses linked to individual performance, commission, vouchers and holiday pay.

From the beginning of an assignment, a hirer must ensure that all its agency workers have access to information about its job vacancies and that they can access its facilities and amenities (e.g.  canteens, gyms, transport and parking facilities), unless the hirer can justify exclusion on grounds other than cost alone.

It is possible for hirers to be ordered to pay compensation to agency workers if inequality of treatment in relation to employment conditions arises due to the hirer supplying inaccurate or no information to the agency about its terms and conditions.

2. National Minimum Wage rises

Following an announcement by the Government on 7 April 2011, the new rates for the National Minimum Wage will increase on 1 October to the following:

* Adult rate (21 years old or more): £6.08 an hour (an increase of 15p an hour);

* 18-20 year olds: £4.98 an hour (an increase of 6p an hour);

* 16-17 year olds: £3.68 an hour (an increase of 4p an hour); and

* Apprentices: £2.60 an hour (an increase of 10p an hour.) This applies to those who are under 19 years of age, or those aged 19 and over but in the first year of their apprenticeship. All other apprentices will continue to receive the national minimum wage at the appropriate age rate.

Over the past few months, Matthew Arnold & Baldwin have hosted and taken part in a number of seminars on the AWR, explaining to hirers what they need to do in order to be compliant from 1 October. We will be taking part in a further two seminars this month.

I will be the guest speaker at recruitment specialist Hay’s breakfast seminar, discussing the implications of the AWR, on Tuesday 20 September in High Wycombe. Full details of the seminar and how to attend are here.

Also, in collaboration with Scottsdale Consulting, Matthew Arnold & Baldwin will be hosting a legal workshop on 22nd September 2011 in Newport Pagnell. This workshop will cover the AWR and pensions auto-enrolment, due to take place in 2012.  Full details of the workshop and how to attend are here.

If you have any concerns regarding the AWR, or anything else employment-related, please contact me at michael.delaney@mablaw.com.

We now hear that the Chancellor has ordered an investigation into how much the tax brings into the national coffers. HMRC has been told to report back by January.

This shows us the power of the people (well, a very select group of the people) to get the Government to take action.  Or does it?  The Chancellor has done nothing but buy himself some time here. 

Time to think has to be a good thing, and it is commendable that there hasn’t been another knee jerk reaction of “yes” or “no”.  What is glaringly obvious, to me, is that whilst economists may be in a position to opine as to how measures such as the 50% rate of tax affect the economy, this is only part of the picture.

The other part is politics; and it is the politicians who are responsible for making changes.  The damage which could be done in being seen to favour the rich at a time when unemployment is high and growth is flat lining means that the merits of the 50% rate are of secondary importance to “how it looks”. 

Just listen to the news and take note of how often you hear the phrase “send a message”.  Policy seems to be more about messages sent than the merit of the measure. 

I fully expect that when the Revenue report back on this next year, the results will not show a strong case for the 50% rate.  I’ve helped enough clients to shape their affairs to reduce the impact of the 50% rate to form my own view on the matter. 

Whatever the outcome of this review, my personal opinion of this is that it won’t matter.  It’s the politicians that shape the policy.  Call me cynical if you will, but the bottom line is that any changes made by politicians are going to be based more on politics than economics

According to Acas, almost six out of 10 workers now use social media at work, either on their computers or their mobile phones. However, whilst some employers encourage their employees to use social media for business development and marketing during work time (and others ban it altogether), many employers are naturally concerned that workers may be spending too much of their working day looking at personal-interest webpages, ‘tweeting’ or blogging; and it would appear that these concerns are well-founded, as Acas claims such behaviour costs the UK economy up to £14bn per year. However, despite these concerns, research has found that fewer than one in ten employers actually have a social media policy.

Through this new guide, Acas aims to provide guidance to employers about what they should be doing in regard to social media. The guide is split into the following areas:

1. Managing performance;

2. Recruitment;

3. Discipline and grievances;

4. Bullying; and

5. Defamation, data protection and privacy.

Acas recommends that employers should consult with staff and trade unions, and make it clear what employees can and can’t do when using the internet and social media (including the consequences of breaching its social media policy.)

The use of social media presents both risks and opportunities for companies. As well as a loss of productivity in the workplace, legal liabilities can arise from the use of social media – for example, discriminatory online comments made by one employee about another, leaks of confidential company information, the use of online information when recruiting new employees, data protection, and loss of company reputation.

With the use of social media still growing rapidly, employers must ensure that they act within the law and do not leave themselves open to a claim. An effective workplace social media policy is the first step.

If you would like any advice on this issue, or anything else employment-related, please contact our head of employment, Michael Delaney at michael.delaney@mablaw.com.

Munir Yakub Patel is due to appear before Southwark Crown Court on 14 October 2011 for allegedly “requesting and receiving a bribe intending to improperly perform his functions” (a breach of section 2 of the Act.) It is alleged that Mr Patel told an individual, who had been summonsed to court for a motoring offence, that he could influence the course of the proceedings in exchange for £500.

The Bribery Act, which came into force on 1 July 2011, increases the maximum penalty for bribery from seven to 10 years imprisonment. Further details of the Act are here.

The Act has also introduced a corporate offence of failure to prevent bribery by persons working on behalf of a business. To avoid breaching the Act, employers must demonstrate that they have adequate procedures in place to prevent bribery. For more details of what employers should be doing to avoid breaching the Act, please click here to read an article by our head of employment, Michael Delaney.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “The Bribery Act is the biggest legal development of the year and given its very wide reach and political force behind it, it is no surprise to see a prosecution so soon after it came into force.  What this prosecution shows is that the law is there not just to catch big businesses on complex international deals, but also small payments made on a local level too.  Prosecutors will take action regardless of size.  Every business should be aware of the Act and should take appropriate steps to stop its employees, agents and other representatives from breaking the law, particularly as their actions can in turn leave their business criminally liable too.”