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Stories included
- How should employers deal with staff stranded by volcano crisis?
- Print firm wins damages after receiving negligent advice
- Director wins right to buy out colleague who acted unfairly
- Bribery Act introduces new offences and 10-year jail terms
- Landlord must pay damages to tenant for wrongful eviction
- New regulations outlaw blacklisting of trade union members
- Husband didn’t reveal affair to wife when remortgaging home
- New legislation relating to trusts comes into effect
- Pre-nup agreements come under Supreme Court spotlight
- Hospital workers win discrimination claim over bonus payments
- Judge erred in favour of baby’s father in family proceedings
How should employers deal with staff stranded by volcano crisis?
The travel crisis caused by the Iceland volcano seems to be over but as the dust settles, many employers will now be wondering how to deal with staff who’ve been absent from work after being stranded abroad.
Thankfully, there are some common sense options that are fair to both sides.
Strictly speaking, failing to turn up for work after a holiday would be classed as unauthorised absence and so it would be possible for an employer to start a disciplinary procedure.
In reality, however, such action could end up in a tribunal which would probably find that disciplining someone caught up in a once in a lifetime event like a volcanic eruption was unreasonable.
Again strictly speaking, workers don’t have an automatic right to be paid when they fail to turn up for work - unless it’s provided for in their contracts. Firms that do feel the need to take a strong approach will therefore need to check their employment contracts and policies before docking wages or they could also face tribunal claims.
The best approach, however, is for both sides to show a little common sense and be prepared to reach an agreement. For while no company wants to pay people who fail to turn up for work, docking the wages of workers who’ve already suffered the stress and expense of being stranded abroad through no fault of their own may seem a little harsh.
It’s also unlikely to be good for morale.
There are a number of options available to deal with the situation. For example, employers could suggest that employees treat the unauthorised absence days as unpaid leave, or as part of their annual leave entitlement.
Another solution would be to pay the employee for the days they were absent but reach an agreement that the time will be made up in stages over the coming weeks or months. This might be particularly appropriate for staff who work flexible hours.
Whatever approach employers take, they must be consistent and they must follow the procedures and obligations laid down in their employment contracts. Treating two employees in the same situation differently could lead to a claim.
Employers should also be consistent in terms of how they dealt with similar crises in the past. For example, difficulties could arise if an employer had paid staff who were absent due to the heavy snowfalls during the winter but then refused to pay staff who were absent because of the volcano.
Much will depend on individual employment contracts, but whatever the technical position, a little goodwill and compromise on both sides will do a lot to prevent problems arising and help maintain a good working relationship.
Please contact us if you would like more information about this or any aspect of employment law.
Print firm wins damages after receiving negligent advice
A print firm has been awarded damages after receiving negligent advice when entering into a franchise agreement.
The firm had contacted a company which offered franchises to run design services under its name. The company identified one of its existing franchises which could be sold as a going concern.
Negotiations began and the printers were told that it would cost £15,000 to refit the premises once the business was purchased. This figure was then entered into the business plan.
The franchise company also told the printers that they would be given client data from the existing business prior to launch. The franchise agreement was then drawn up and signed.
However, the franchise company then refused to place the client data on to the new business’s computer system as agreed. The cost of refurbishment also turned out to be double the figure stated.
The printers claimed damages on the basis that the franchise company had failed to exercise reasonable care when providing important advice. If they had known the true cost of the refurbishment, they would have negotiated a lower purchase price.
The court ruled that the franchise company had been negligent and in breach of its duty of care when giving advice about refurbishment costs. It had also breached its contractual obligations by failing to provide the customer data as agreed and it was therefore liable to pay damages.
Please contact us if you would like more information about the issues raised in this article.
Director wins right to buy out colleague who acted unfairly
A director of a golf equipment company has won the right to buy out a fellow director who had acted in an unfair and prejudicial manner.
The two men had set up a new company in which they had one share each and were joint directors. The relationship then broke down with the first director making several allegations about the way his colleague was conducting business affairs.
He complained that the colleague had withdrawn a large sum of money illegitimately from the company account and had run up unexplained debts on the company credit card. He had also altered the share structure to give himself greater voting power and then removed his colleague as a director at a meeting that was inquorate.
It was also alleged that he had registered his home address as the company’s office address, and opened a new company bank account and wrongly paid company receipts into it.
The second director disputed the allegations and the court held that, given the direct clash of evidence, deciding the facts of the matter would come down to appraising each director’s credibility.
The judge said that the court preferred the evidence of the first director who was making the complaint. He answered questions in a frank and straightforward way and had tried to provide an accurate account.
His colleague, however, had been evasive and had lacked credibility. When pressed, he had made admissions that were against his own interest. The court held that he had conducted the company’s affairs in a way that was prejudicial to his fellow director.
The court therefore held that the director making the complaint was entitled to buy his colleague’s share of the company at a value to be agreed.
Please contact us if you would like more information about issues relating to company law.
Bribery Act introduces new offences and 10-year jail terms
The Bribery Act, which introduces the threat of unlimited fines and 10-year jail terms for offenders, has now received the Royal Assent and is expected to come into effect by October.
The new Act covers the general offences of offering or accepting a bribe and creates the specific offence of bribing a foreign public official.
It also introduces a corporate offence of failing to prevent bribery by people working on behalf of a business.
The maximum penalty for bribery increases from seven to 10 years’ imprisonment. Corporate offences of failing to prevent bribery are punishable by unlimited fines.
Companies that fall foul of the new law may be able to avoid conviction if they can show that they had put adequate procedures in place to try to prevent offences occurring.
The Ministry of Justice is expected to publish guidelines within the next few months as to what these procedures might entail. The new guidelines are likely to cover areas such as anti-bribery policies, staff training, corporate entertainment and due diligence relating to business associates.
We shall keep clients informed of developments.
Landlord must pay damages to tenant for wrongful eviction
A landlord who repossessed and sold a property while the tenant was in prison has been ordered to pay damages for wrongful eviction.
It’s an unusual case but a timely reminder of the dangers of taking the law into your own hands.
The landlord first re-entered the property and changed the locks while the tenant was away from home. The tenant returned and was able to gain entry, but shortly afterwards he was sentenced to a term in prison.
The landlord then entered the property again and sold it with vacant possession.
The tenant sought damages for wrongful eviction under the Housing Act 1988 on the basis that the landlord had wrongfully deprived him of the occupation of the premises.
The landlord put forward the defence that he believed that the tenant had abandoned the property and surrendered the tenancy. He submitted a counter claim to recover rent arrears.
The judge held that the tenant had not abandoned the premises and that the landlord had taken a calculated risk in re-entering and changing the locks. He had no reasonable grounds for believing that the tenant was no longer at the premises.
That decision was upheld by the Court of Appeal which agreed that the tenant had not done anything that could amount to a surrender of the tenancy.
The case highlights the need for landlords to seek legal advice when faced with situations like this. In order to mount a successful defence, the landlord would have to be able to prove that he believed and that it was reasonable to believe that the property had been abandoned.
If he is unable to do this then he is likely to be found liable for wrongful eviction. A more certain approach would be to seek a possession order.
Please contact us if you would like more information about landlord and tenant issues.
New regulations outlaw blacklisting of trade union members
New regulations have come into effect making it unlawful for companies to use blacklists to deny employment to trade union members.
It is now unlawful for organisations to dismiss employees or refuse to employ them because they appear on a blacklist. Employment agencies can not refuse to provide their services to a person because of blacklists.
Employees and trade unions can also claim compensation against those who “compile, distribute, or use blacklists”.
The measures have been introduced after the Information Commissioner reported last year that 40 construction companies were subscribing to a database to vet workers. The database was closed down under data protection law. The person who operated it was fined £5,000.
The new rules have been introduced under the Employment Relations Act 1999 which gives the Government the power to introduce regulations to prohibit the blacklisting of workers for their union membership or activity.
Husband didn’t reveal affair to wife when remortgaging home
A wife has prevented her home from being repossessed after a court heard that her former husband had not revealed that he was having an affair when they remortgaged the property.
The couple had lived together in the family home with their children. The husband got into financial difficulties after overspending on credit cards. He persuaded his wife to agree to remortgaging the home so he could clear his debts.
Shortly afterwards, she discovered that he had been having an affair and this led to them divorcing. The husband then lost his job and was later made bankrupt.
The wife acquired the home for £1 from his trustee in bankruptcy. However, she then found she could not pay the instalments due to the company which had financed the remortgage.
The company then began legal proceedings and the court decided that it was entitled to repossess the house.
However, that decision has now been overturned by the Court of Appeal. It held that when the wife was asked by her husband to remortgage the home she was entitled to be given all the relevant information that might influence her decision.
In agreeing to her husband’s request, she was working on the assumption that he was as committed to their marriage as she was. Had she known of her husband’s affair she would probably have reached a different conclusion.
The affair should therefore have been disclosed. The husband’s failure to make that disclosure amounted to undue influence on his wife which was sufficient to invalidate the mortgage transaction between them.
Her appeal was therefore allowed.
Please contact us if you would more information about remortgaging a property or issues relating to matrimonial law.
New legislation relating to trusts comes into effect
New legislation governing the administration of trusts has now come into effect.
The Perpetuities and Accumulations Act 2009, effective from 6th April this year, abolishes the long-established 21-year limit during which private trusts could accumulate interest without having to distribute it to beneficiaries.
The change was made after the Law Commission argued that there was no good reason for restricting a settler’s ability to direct or allow for the accumulation of income. In fact, such restrictions could create problems by obliging trustees to distribute income once the 21-year limit had been reached.
This meant money could be given to beneficiaries who were too young to receive it or incapable of dealing with it properly because of health or other issues.
Many experts believe the changes will make it more attractive to set up trusts because people can have more confidence that money will not be settled on beneficiaries when they are too young or if they are incapable of dealing with it for any other reason.
Charitable trusts will be still be subject to the 21-year limit, however, to ensure that income is spent for the public benefit rather than be allowed to accumulate indefinitely.
The Act also simplifies the rules relating to perpetuities by introducing a single 125-year period for all new trusts.
Please contact us if you would like more information about the changes or any aspect of setting up trusts.
Pre-nup agreements come under Supreme Court spotlight
The legal validity of pre-nuptial agreements has come under the scrutiny of the Supreme Court.
Nine justices have been considering the case of the heiress Katrin Radmacher and her former husband Nicolas Granatino who drew up a pre-nup agreement before they married. The question for the justices is whether that agreement should be considered legally binding following the couple’s divorce.
It’s hoped the ruling when it comes will help clarify the legal position for thousands of couples throughout the UK.
Some guidance would be very helpful because while pre-nups tend to be legally binding in America and most of Europe, the position in the UK is less clear. Until recently, the courts would certainly take them into account in the event of a dispute but would disregard them if the judge thought it appropriate.
This could happen if there were compelling reasons to doubt their validity. Doubts might arise if one party signed without getting proper legal advice or if someone failed to disclose all their assets when the contract was being drawn up.
The status of pre-nups took a major leap forward with the case of German heiress Katrin Radmacher and her former husband, Nicolas Granatino, who is French. When they married they drew up a pre-nup saying that he would not make a claim on her money if they ended up divorcing.
The High Court decided that it would be unfair to hold Mr Granatino to the pre-nup agreement and awarded him £5.8m from Miss Radmacher’s fortune.
However, that ruling was then overturned by the Court of Appeal which cut the payment to £1m – a figure Miss Radmacher was prepared to accept. In giving his judgment after the hearing, Lord Justice Thorpe said it was becoming “increasingly unrealistic” for courts to disregard pre-nups. He believed that a “carefully fashioned contract” could provide a valuable alternative to the “stress, anxiety and expense” of going to court.
“There are many instances in which mature couples, perhaps each contemplating a second marriage, wish to regulate the future enjoyment of their assets and perhaps to protect the interests of the children of their earlier marriages upon dissolution of a second marriage.”
That ruling put pre-nups on a much stronger footing but then Mr Granatino took his case to the Supreme Court. He says he didn’t know the full extent of his former wife’s wealth when he signed the pre-nup and will suffer personal hardship if the agreement is upheld.
His lawyers argued that the Court of Appeal had created a revolutionary piece of legislation instead of applying existing case law. Miss Radmacher’s counsel countered by saying that the court should uphold the principle “that people should not easily be able to escape their bargains”.
Whatever the Supreme Court decides, its ruling will be final and have serious implications for pre-nups in the future.
If Miss Radmacher wins the case then pre-nups will have to be taken far more seriously by the courts and be considered legally binding, unless there are strong reasons to doubt their validity.
If Mr Granatino wins then the position will be less clear, but hopefully the court will give some guidance when giving its judgment which will help clarify the situation for the future.
We shall keep clients informed of developments.
Hospital workers win discrimination claim over bonus payments
A group of hospital workers have won their claim that they were the victims of indirect sex discrimination when their employer cut their bonus payments.
The women all worked as hospital domestics for Newcastle NHS Hospitals Trust. They brought their claim after the Trust cut their bonus payments but continued giving bonuses to male porters who carried out work of similar value.
The Trust said it had to remove the women’s bonuses in order to compete with outside bidders in a tendering exercise for domestic services. That bid did not affect portering services and it had not been possible later to remove the differential that had been created.
It put forward a “genuine material factor” which tried to show that the difference in bonus payments was due to genuine, practical factors which were unrelated to the sex of the employees.
However, that defence has been rejected by the Employment Appeal Tribunal. It held that the withdrawal of the bonuses was designed to bring the women’s pay into line with the market rate for domestics.
However, that in itself was discriminatory because, as would be obvious to the Trust, that sector was made up almost entirely of women who received less than men who did jobs of equal value.
Please contact us if you would like more information about employment law issues.
Judge erred in favour of baby’s father in family proceedings
The Court of Appeal has ruled that a judge had erred in favour of a baby’s father when deciding the terms of an interim contact order.
The case involved a married couple who separated shortly after their baby son was born. The father remained in the family home in Essex and the mother went to live with her relatives in Lancaster, taking her baby with her.
A judge granted an interim contact order saying that it was appropriate for the baby, who was born with the congenital condition known as club foot, to stay with his father for recurring five-day periods. This meant the baby would be with the father for a quarter of the duration of the interim order.
The judge said he had reached his decision after carefully considering the baby’s wellbeing in accordance with the welfare check list set out in the Children Act 1989. He considered that the father, who was a GP with paediatric experience, would have the necessary skills to look after the baby.
The judge also felt it was important for the baby to spend time with the father to get to know him.
However, the Court of Appeal has ruled that the judge had failed to apply the welfare checklist properly. He had not given sufficient regard to the fact there was little evidence to suggest that the father would be able to look after the baby for the length of time provided by the order. The father had no other children and had not looked after the baby since the birth.
It was also the case that the baby was still being breastfed and had specific health needs. The mother might also suffer anxiety during the baby’s absences and this in turn might be imparted to the baby and have an adverse effect on him.
The Appeal Court quashed the order and replaced it with one that allowed for contact between father and baby at a contact centre in Lancaster. This could then be followed by further contact and overnight residence in Lancaster.
Please contact us if you would like more information about family law issues.
Case List for May Combined Website Articles
Print firm wins damages after receiving negligent advice
MGB PRINTING & DESIGN LTD v KALL KWIK UK LTD (2010)
[2010] EWHC 624 (QB)
QBD (Penry-Davey J) 31/3/2010
Director wins right to buy out colleague who acted unfairly
IN THE MATTER OF HEDGEHOG GOLF CO LTD sub nom DENIS LANTSBURY v (1) FRANK HAUSER (2) HEDGEHOG GOLF CO LTD (2010)
[2010] EWHC 390 (Ch)
Ch D (Companies Ct) (G Moss QC) 12/3/2010
Landlord must pay damages to tenant for wrongful eviction
KALAS v FARMER (2010)
CA (Civ Div) (Jacob LJ, Lloyd LJ, Stanley Burnton LJ) 29/1/2010
Husband didn’t reveal affair to wife when remortgaging home
JAYNE HEWETT v FIRST PLUS FINANCIAL GROUP PLC (2010)
[2010] EWCA Civ 312
CA (Civ Div) (Jacob LJ, Leveson LJ, Briggs J) 24/3/2010
Hospital workers win discrimination claim over bonus payments
NEWCASTLE UPON TYNE NHS HOSPITALS TRUST v S ARMSTRONG & ORS (2010)
EAT (Underhill J (President), A Harris, BM Warman) 22/2/2010
Judge erred in favour of baby’s father in family proceedings
RE H (A CHILD) (2010)
CA (Civ Div) (Arden LJ, Leveson LJ, Sir Scott Baker) 19/2/2010
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