Articles

Snooping on your staff? Make sure you know the rules

By James Willis, Head of Employment at stevensdrake

The extent to which you can (or should) be monitoring your staff when they are at work is a matter of ongoing debate.  More specifically, can you look at your employees’ internet history, emails and other electronic communications without getting yourself into trouble?  A recent Romanian case that found its way to the Grand Chamber of the European Court of Human Rights (ECHR) provides us with a good excuse to have a fresh look at this issue.

 

Bogdan Barbulescu’s ‘Beef’

In the course of his employment, Mr Barbulescu (Mr B) was required to set up a Yahoo Messenger account in order to communicate with his employer’s customers.  The account was meant to be used for business purposes only.  Indeed, the company had a strict rule that required employees to refrain from any personal use of its IT systems.

Problems arose when Mr B’s employer monitored his usage of the Yahoo Messenger account and found that he had been sending personal as well as business messages, some of which were to his fiancée.  His employer confronted Mr B with the allegations and ultimately dismissed him for breaking its internal disciplinary rules.  Mr B’s claims before a Romanian court were unsuccessful, so he ended up in front of the ECHR, arguing that his human rights had been breached; more specifically, he relied on his right to respect for his private life and his correspondence.

 

What did the Court say?

By a majority, the 17 (yes 17!) judges who heard this case concluded that Mr B’s human rights had been breached.  The court took particular note of the fact that Mr B had not been properly notified of the likely monitoring of his messenger usage.  He was not made aware of either the nature or the extent of any such monitoring.  The ECHR also noted a lack of justification for the level of monitoring used by the employer.  No apparent assessment was made of whether there was a less intrusive form of monitoring that might have achieved the same objective.  

 

What does this mean for employers here in the UK?

In some respects, this decision doesn’t change very much.  Few cases of this nature are likely to be argued on the basis of an alleged breach of human rights.  However, the case is a timely reminder of the general obligation imposed on employers under other laws, such as the Data Protection Act 1998.  In this regard, it is well worth looking at The Employment Practices Code, which is published by the Information Commissioner.  Here’s a link that will take you to it:  https://ico.org.uk/media/for-organisations/documents/1064/the_employment_practices_code.pdf 

Part 3 of the Code deals with monitoring staff in the workplace.  It is fairly easy to read and provides some very helpful guidance.  In summary, the Code says that you should only monitor your employees’ use of IT systems if they know what you are up to.  You should keep monitoring to a minimum and be clear as to the reasons why you are doing it.

Bearing the above in mind, before you start interrogating your employees’ email archives, it is essential to check that your policies give you the right to monitor them in this way.  Without clear policies, your capacity safely to monitor your employees may be significantly curtailed.

 

What else should you be doing to protect yourself?

Once you know what (if anything) your policies say on this subject, you should:-

  • update your policies (if necessary) in order to make staff aware of your right to monitor them;
  • make sure your policies are also clear on the extent to which employees can use your systems for personal purposes (if at all);
  • consider using a ‘pop-up’ message, to remind staff of your right to monitor their usage of your systems each time they log in;
  • consider requiring your staff to ‘consent’ to you monitoring their activities in your employment contracts; and
  • if you find yourself wanting (or needing) to ‘snoop’ on your employees, consider taking legal advice first.

 

Disciplinary suspension equals breach of contract, says High Court

By James Willis, Head of Employment at stevensdrake

Those of you with long memories may remember the case of Gogay v Hertfordshire County Council.  It involved a care worker who was suspended from work because of an allegation of sexual abuse for which it turned out there was no real evidence.  A court found the decision to suspend the employee to be a ‘knee-jerk’ reaction that fundamentally broke the terms of the contract of employment.  As a result, the employee was able to claim financial compensation for employer’s breach.

Against this backdrop, it is interesting to look at the much more recent case of Agoreyo v London Borough of Lambeth, which was heard a little earlier this year. 

The Facts

The Agoreyo case concerned a teacher, who was accused of using inappropriate physical force, when seeking to manage two of the pupils in her class.  Much like in the Gogay case, the teacher was suspended before any evidence to substantiate the allegations against her had been found, or even sought.  Ms Agoreyo promptly resigned.  Her resignation letter was polite and expressed gratitude for the guidance and support she had received during her employment.  Nevertheless, she later brought legal proceedings against her employer, arguing that the decision to suspend her amounted to a serious breach of her contract of employment.

The Decision

The employer’s case was that the suspension amounted to a ‘neutral act’.  The employee would have had the proper opportunity to respond to the allegations as part of the investigation process, had she not resigned.   The High Court judge disagreed and referred back to the decision in the Gogay case.  Mr Justice Foskett concluded that a suspension in these circumstances was not a ‘neutral act’.  He took account of the lack of evidence against Ms Agoreyo and the absence of any apparent attempt to obtain her version of events before implementing the suspension.  In effect, he found that the suspension was precisely the sort of ‘knee-jerk’ reaction that the Gogay case had identified and condemned.  As a result, the judge found in Ms Agoreyo’s favour and concluded that the employer had fundamentally broken the implied contractual term of mutual trust and confidence.  

Why is this case important?

You might ask why we are commenting on this case, when it simply seems to reach the same conclusion as an earlier case decided roughly 17 years ago.  Well the reason is that despite the earlier decision in Gogay, employers still commonly suspend their employees as a routine reaction to even the most minor allegations of misconduct.  Admittedly, in many cases, the employer experiences no ill-effects.  The employee takes it on the chin, accepts it as part of the process and gets on with it.  Yet the potential for an employee to react differently and resign in response the suspension still exists.  

In the circumstances, employers are well-advised to think carefully before imposing suspensions in cases such as these.  Ask yourself whether the suspension is truly necessary?  Is it proportionate?  Would the employee be prepared to agree the arrangements for the suspension with you? It’s worth considering these points very carefully before issuing the suspension letter.  You never know when you are going to be the one in a hundred who gets caught out!

 

Another holiday pay case to digest

By James Willis, Head of Employment at stevensdrake

It must be a good few months since I last did an article on holiday pay.  So to fend off those ‘working time’ withdrawal pangs, I will tell you about the recent decision in the case of Dudley Metropolitan Borough Council v. Willetts.

The Facts

The workers in this case were plumbers, electricians and other tradespeople, all employed by Dudley Council.  In addition to their normal working hours (which were about 37 hours per week), they would routinely be offered the chance to work overtime.  It was entirely up to them whether they signed up for these extra hours, although many employees regularly did so.

Unsurprisingly, when these workers went on holiday, they were only paid for their core working hours, without any regard for the overtime they commonly worked.  The workers claimed that this broke employment laws relating to the calculation of holiday pay.

The Decision

This case hinged on the question of whether the voluntary overtime pay could be said to amount to ‘normal remuneration’, for the purposes of working time laws.  The Council argued that it did not, as it was not connected with the tasks which the workers were specifically engaged to perform.  However, both the Employment Tribunal and the Employment Appeal Tribunal disagreed.  They found that the overtime payments were made with sufficient regularity as to amount to ‘normal remuneration’.  They also observed that if such payments were not made during periods of annual leave, workers might be discouraged from taking holiday at all, because of the financial ‘penalty’ that they would incur.  All in all, they concluded that the overtime payments should be factored in when calculating holiday pay.

 

So What Now?

The momentum has steadily (and seemingly decisively) built in favour of the worker in these cases.  It is now hard to see how any payments regularly made to workers in relation to the performance of their duties could lawfully be excluded from the calculation of holiday pay.  Nevertheless, we are still left with some residual problems: 

  • Which payments fall the other side of the line and are paid sufficiently irregularly as to fall outside the definition of ‘normal remuneration’?  For example, what about annual bonuses (whether discretionary or otherwise)?   
  • How should employers go about factoring in these additional payments, when calculating holiday pay?  Existing laws suggest that employers should average out the worker’s pay over a 12-week reference period.  In some cases, however, this simply doesn’t work; the period isn’t long enough fairly to reflect the worker’s overall level of ‘normal’ pay.  The ‘Taylor Review’ recently suggested extending the reference period to 52 weeks.  This sounds sensible, but will the Government follow up on this proposal and find the time to make it law?

 

All in all, whilst the legal landscape has certainly become clearer, there are still some significant ‘grey’ areas.  As a result, this is unlikely to be the last article I write on the subject of holiday pay.  So until next time…

 

Your invitation to our Employment Law Update Seminar

By James Willis, Head of Employment at stevensdrake

We will soon be holding our hugely popular annual update seminar, at which we will be discussing all the big changes to employment laws that we have seen over the course of 2017. 

The seminar will be held on Wednesday 6th December 2017 at the Sandman Signature London Gatwick Hotel in Crawley.  Registration commences at 8:30am and the seminar starts at 9:00am.  I very much hope that you will be free to come along and learn about all the latest developments in the field of employment law, including:

  • the implications of the recent cancellation of the Employment Tribunal fees regime;
  • important case law on working time and the minimum wage;
  • key developments in discrimination law; and
  • significant issues relating to employment status and the ‘gig’ economy.

 

To book your place, simply email us at employment@stevensdrake.com with your details.  

I look forward to seeing you there!

Giving security is a complicated business

By Paul Dungate, Head of Business Law at stevensdrake

When client companies undertake a material acquisition of shares or substantial assets often they finance it through a Bank loan. There are myriad types of funding, but the essence is, of course, that a substantial sum is lent by the Bank for the company to use and the Bank takes ‘security’ over assets such as property or shares as a guarantee of getting repayment.

 

Many smaller client companies initially think it is a simple transaction – a loan agreement and then something akin to their house mortgage and similar to loans you get as a consumer/individual. As mortgages for houses are simple, many think it is just as simple in the corporate arena. Unfortunately, it is quite a bit more complicated and so I thought it might be beneficial to explain what is often required, particularly as the work of the Borrower’s solicitor can take a great deal of time and therefore be expensive. I’d like clients to understand why it can take significant time and effort to deal with.

The Bank and its solicitors have no pressing timescale like you may have, they just want everything done perfectly according to their preferred documentation text which we have to consider, make fit to the circumstances, negotiate and agree (often the initial drafting can be simply wrong). So they control the pace and dictate their requirements.

Let’s take an example: Alpha Ltd (owned by Mr Jones) is buying all the 100 shares in Omega Ltd from a single individual Seller, Mr Smith, for £2m with a loan from Bank A.  Omega Ltd owns a property worth £1m from which it conducts its business – and this has a mortgage on it with its day-to-day different Bank (which also provides overdraft facilities), Bank B.  Additionally, Alpha Ltd will also issue some new shares in itself to Beta Ltd to raise £500,000 extra capital so that the Bank borrowing is £1.5m.

So, how many documents do you think have to be drafted, negotiated and agreed and matters checked before the money can be released; and what information does the lending Bank A want in order to make itself comfortable that it has enough security for the loan?

 

It is likely that at least the following may be required, in addition to all the normal company share acquisition and due diligence process and ancillary documents, such as the Share Purchase Agreement, Disclosure Letter approvals, all property forms and other practical matters investigated etc:

  • An Investment Agreement between Alpha Ltd and Beta Ltd (20 to 40 pages);
  • Possibly a replacement set of Articles of Association of Alpha Ltd (5 to 20 pages);
  • Detailed Board minutes of a) Alpha Ltd and b) Beta Ltd approving the new issue and the new Articles of Association;
  • A Subscription letter for the new shares;
  • A waiver of Mr Jones’ pre-emption rights for new shares
  • Various Companies House share capital forms to be filed, sending full hard copy set of the new Articles to Companies House;
  • A Shareholders Agreement between Mr Jones, Beta Ltd and Alpha Ltd as to how they agree to govern Alpha Ltd (20 to 60 pages);
  • Written Special Resolutions for the share issue and new Articles by a) Alpha Ltd in issuing the shares and getting new Articles; and perhaps by b) Beta Ltd taking them and paying the issue price;
  • The Bank’s list of conditions and information requests, every single one of which has to be satisfied before setting a Completion date and organising getting the advance (these can number 100!), a major part of which is called the ‘Conditions Precedent’;
  • A Solicitor’s Undertaking to the Bank or its Solicitors from us concerning fees and other tasks we must do to satisfy their ‘Conditions Precedent’;
  • A Facility (or Loan) Agreement (50 to 80 pages) with Alpha Ltd (and perhaps Omega Ltd as well) which has various documentary attachments;
  • A Debenture given by Alpha Ltd (30 to 60 pages);
  • A Legal Charge given by Alpha Ltd over any real property it owns;
  • A Debenture given by Omega Ltd (30 to 60 pages), once the shares are bought;
  • A Legal Charge given by Omega Ltd over the property, once the shares are bought;
  • A Corporate Guarantee by Omega Ltd, once the shares are bought, guaranteeing Alpha Ltd’s repayments;
  • An Intercreditor Deed between Bank A, Alpha Ltd, Beta Ltd and perhaps Bank B, if different and if its security rights continue – this sets the precedence of the parties’ rights in order;
  • Various sets of Alpha Ltd board minutes, separately approving the purchase of the Omega Ltd shares, the terms of the Facility Agreement and the other security documents with commercial justifications, solvency statements;
  • Alpha Ltd Written Special Resolutions approving the same;
  • Various sets of Omega Ltd board minutes, separately approving the terms of the Facility Agreement and other security documents it has to execute with commercial justifications;
  • Omega Ltd Written Special Resolutions approving the same;
  • A Personal Guarantee from Mr Jones;
  • Possibly a Legal Charge given by Mr Jones over the shares he holds in Alpha Ltd;
  • A certificate of independent legal advice given to Mr Jones relating to his Personal Guarantee;
  • An Officers Certificate by Mr Jones as director of Alpha Ltd;
  • A separate Officers Certificate by Mr Jones when he is a director of Omega Ltd;
  • Companies House forms and Land Registry forms filing the Bank’s security there;
  • If a prior charge/debenture exists on either or both of Alpha Ltd or Omega Ltd and if they have to be removed on the grant of the new loan, the release documents relating to this (there may be several documents to do this for each); and
  • Ancillaries such as Funds Flow Statements, statement of solvency, anticipated balance sheets, specific insurance cover terms over a variety of things over several different policies.

 

All of these documents have to be drafted, reviewed, negotiated and agreed, and this is all in addition to the purchase of shares work.  Furthermore, much of our Due Diligence work is reviewed by the Bank’s solicitors.

 

I hope this gives just a flavour of the extensive work and time needed to sort out the security for the Bank funding being given, and why it may take time and incur significant cost.  Of course, the client has to pay Bank A’s solicitors’ fees, those of Bank B as well as its own solicitors’ costs relating to the acquisition work, the new shares issue work and of course all this security work and Due Diligence in relation to what may have been seen at the outset as a simple Bank Loan.

 

 

For more information contact Paul Dungate on 01293 596981 or email paul.dungate@stevensdrake.com

 

Employment Tribunal fees regime ‘quashed’ by Supreme Court

By James Willis, Head of Employment at stevensdrake

Over the last few years, UNISON (the union) has been making repeated efforts to have the existing Employment Tribunal fees regime declared unlawful. Until now, it has enjoyed little success. However, the landmark decision of the Supreme Court, published on 26 July 2017, has changed all that.

The seven Supreme Court justices who heard UNISON’s case unanimously concluded that the current Employment Tribunal fees regime is unlawful and should be quashed. This means that with immediate effect, Employment Tribunal fees are no longer payable. It also means that the Ministry of Justice (MoJ) will be obliged to facilitate the repayment of all ET fees paid over the last 4 years. The total bill is likely to amount to about £32 million. All in all, it was not a good day for the MoJ.

Lord Reed, who gave the leading judgment in the UNISON case, concluded that the ET fees regime has unfairly denied people access to justice through the Employment Tribunal system. At the same time, it has raised relatively little money for the public coffers and has done nothing to discourage ‘unmeritorious’ ET claims. To add insult to injury, Lady Hale found the fees regime to be indirectly discriminatory as well, tending to disadvantage more women than men.

Where now?

Precisely how the Government will react to this decision remains unclear. There is the prospect that the MoJ will move to introduce an alternative fees regime. They may set fees at a lower level and/or increase the range of circumstances in which no fee is payable. My own view is that they should give up the whole thing as a bad job. The uncertainty created by any new fees system would be considerable, bearing in mind the prospect that it too would be challenged. Furthermore, the Supreme Court judgment placed so much emphasis on the importance of access to justice that it begs the question of whether any fee is appropriate in cases such as these.

Lawyerly self-interest?

It’s fair to say that Employment Tribunal fees have never been particularly popular with employment lawyers (regardless of whether they predominantly act for employers or employees). Many will say that this is because of the impact it has had on our workload and our livelihoods. There is bound to be a degree of truth in this; I won’t pretend otherwise. Nevertheless, I like to think that our collective view is primarily formed on the basis of a more principled conclusion that access to justice is a cornerstone of our legal system and that tribunal fees have created an unfair impediment. No doubt, you will form your own view on whether you believe this to be true.

Parental Responsibility – When does a harmless trip abroad turn into child abduction?

By Kamal Vasdev, solicitor at stevensdrake

It is fair to say that summer is in full swing. We have had our customary fortnight of hot weather and not much sleep at night, Wimbledon is well under way and many of us are eagerly looking forward to holidaying abroad.

For most people, the process of organising a holiday consists of booking flights, arranging accommodation and packing a suitcase. For most at least.

However, if you are planning to travel outside of this jurisdiction (ie England and Wales) for a harmless getaway with your child(ren) and you are separated from your partner or spouse, there is one further step you must take which could be the difference between two weeks of bliss and spending time in police custody. 

Before even clicking that confirmation button to book your flights, you must ensure that you have obtained the consent (preferably written) of anyone who holds Parental Responsibility (PR) for the child/ren. For reference purposes, biological mothers automatically obtain PR. Biological fathers who were married to the mother at the time the child was born also hold PR as do unmarried fathers who are named on the birth certificate (of children born after 1 December 2003). 

So as not to cause undue stress and anguish to all separated parents, I hasten to add that if you have secured a Child Arrangements Order (formerly a Residence Order) stipulating that the child/ren live with you, you are entitled to take them out the jurisdiction for up to 28 days without the consent of the other parent with PR (although it is always advisable and good practice to notify the non-resident parent).

If no such Child Arrangements Order exists however, and if the non-travelling parent who holds PR refuses to give their consent, you must not proceed with your intentions to travel outside of this jurisdiction as to do so is a criminal offence and tantamount to child abduction. To put this into context, simply taking a child to Scotland for the day without written consent of the non-travelling parent with PR would mean that you are breaking the law.

What happens if I decide to leave the jurisdiction without obtaining written consent?

Quite often when I advise clients of the requirement to obtain written consent before making any travel plans, I am met with responses consisting of the following:

  1. He/she won’t do anything to stop me if I go.
  2. I am only going to Spain, not half way across the world
  3. I have taken the child out of the jurisdiction before and he/she has never said anything.
  4. If he/she tries to stop me once I have gone, I will just say that I did not know that consent was required.

Despite these points, my advice always remains the same. The Courts in this jurisdiction are indiscriminate as to what may or may not happen or what has happened in the past. Ignorance of the law is not a valid defence and simply asserting that one was unaware of the legal requirements will not wash with the Courts.

If the non-travelling parent has genuine concerns that the travelling parent intends to imminently remove a child from this jurisdiction without their consent, then depending on the destination in question and the risk of non-return, they can apply to the Court for orders ranging from a Prohibited Steps Order to a Wardship Order (in the High Court) which, if granted, will mean that the travelling parent will be prohibited from removing the child from England and Wales without the permission of the Court for the duration of the Order. In addition to this, the Court can implement port alerts and confiscate the children’s passports to ensure that they do not leave this jurisdiction. This in turn will mean that an application to the Court will always be required for any proposed holidays in the future (and can remain in place for the remainder of the child’s minority!) This can be an arduous task to look forward to each and every year especially if the children are some way off their 18th birthday.

If the travelling parent successfully removes a child from this jurisdiction without consent, the Court’s powers are wide ranging and depending on whether the country to which the child has been removed is a signatory to the Hague Convention, the travelling parent can be arrested in that country and immediately returned to this jurisdiction. To make matters worse, once back in this jurisdiction, the Courts have the power to impose anything from a hefty fine to a prison sentence or a change of residence in extreme circumstances. When considering this thoroughly, I once again ask; is it worth the risk?

What can I do if I do not receive written consent?

Rather than taking a chance and potentially incurring the Court’s wrath, if it is simply not possible to resolve matters through discussions or via correspondence and mediation proves unsuccessful or is unsuitable (where a relevant exemption is applicable), the correct approach to take is to apply to the Court for permission for temporary removal from the jurisdiction under the Children Act 1989. As is the case in all Children Act applications, the welfare of the child/ren involved is the Court’s paramount consideration. In considering an application of this nature, a Judge will look at numerous factors including but not limited to:

  • The purpose of the proposed trip (ie a holiday, to visit family or to broaden the child/ren’s knowledge and appreciation of a parent’s cultural and religious background)
  • The reasons for refusal of the non-travelling parent (ie whether the refusal is based on trivial issues between the parents or whether there are genuine concerns behind the refusal), 
  • Whether the child/ren will benefit from the holiday (which in most cases they do).
  • The proposed destination.
    • Clearly a Court is more likely to look favourably on a short trip to a country which is signatory to the Hague Convention in comparison to a visit to non-Hague Country where it is far more difficult to instigate the return of the child if subsequent issues arise
  • An assessment of the risk of breach/and magnitude of the consequences of a breach of an undertaking by the travelling parent to return with the child (Re K (Removal from jurisdiction: Practice) [1999]).

It is always advisable to get the process of resolving any travel arrangements started well in advance to avoid the panic of legal intervention days or weeks before the flight is due to take off. At stevensdrake, our specialist family team can advise you on the correct approach to take if consent of the non-travelling parent with PR is not forthcoming. Whilst we always aim to resolve matters in an amicable fashion, we are aware that the need to litigate in the Family Courts can often arise due to urgency or the failure of the non-travelling parent to compromise. As such, we are able to take the necessary steps when required to promptly apply to the Court and advocate on your behalf. 

If you would like advice on Parental Responsibility, then please contact Kamal Vasdev on 01293 596959 or kamal.vasdev@stevensdrake.com

Taylor Report

Towards the end of last year, Theresa May appointed Mr Matthew Taylor (a former adviser to Tony Blair) to head up a review of modern working practices.  He was asked to consider whether our current laws are ‘fit for purpose’, having regard to the modern, flexible and diverse way in which people earn a living.  

Mr Taylor’s report was published, to some fanfare, on 11 July 2017.  In an effort to save you the job of reading all 115 pages yourself – surely life’s too short – I have put together this thumbnail sketch of what it’s all about.

What’s he trying to achieve?

In a nutshell, Mr Taylor’s ambition is to ensure that all work in the UK economy is “fair and decent”.  Who could possibly disagree with such an admirable ambition?  Of course, a report of this nature needs to come up with concrete proposals, as well as high-minded ideals.  In the remainder of this article, I will set out some of the more significant policy ideas that Mr Taylor advocates.

Clarity of status

It might seem strange, but lawyers and judges can still struggle to agree on who is an employee and who is not.  Add into the mix the fact that as well as ‘employees’ and the ‘genuinely self-employed’, we also have the intermediate legal status of ‘worker’, and it can all become very confusing.  If employers categorise people wrongly, the implications for both the business and individual can be significant.  Look no further than the high-profile claims recently brought against Uber, CitySprint and Pimlico Plumbers for evidence of this!

Having considered submissions from a wide range of interested parties, Mr Taylor is inclined to retain the 3-tier status system currently in place.  However, he recommends introducing:

  • a new and more detailed statutory definition of what amounts to ‘employment’ (to be supplemented by regulations and guidance, where appropriate);
  • the term ‘dependent contractor’, as an alternative to ‘worker’; and
  • a definition for ‘dependent contractor’ that focuses on the level of control exercised over the person concerned, reducing the potential for businesses to wrongly categorise people as self-employed.

Mr Taylor has also recommended unifying the way in which we categorise people for both employment law and tax purposes.

Where disputes arise regarding a person’s status, Mr Taylor suggests that Employment Tribunals should be in a position to make swift determinations, without the claimant having to pay a fee.  The burden of proof should be on the business to substantiate the status of the individual.

Clarity of terms

Mr Taylor has recommended that businesses should be required to provide a written statement of main terms and conditions to both employees and ‘dependent workers’ from day one of their engagement.  Businesses that fail to provide such statements would open themselves up to claims for financial compensation.

Fairer pay

Mr Taylor has suggested that the Low Pay Commission consider whether employees on ‘zero hours’ contracts (or contracts with few guaranteed hours) should be entitled to a higher national minimum wage.  He has also advocated looking at novel ways in which fair rates of pay can be calculated for workers in the ‘gig economy’.  For example, could their pay be calculated by reference to their output, rather than the time spent working (so-called piecework)?  There are already provisions within the national minimum wage legislation that allow for this.  However, they may require some tweaking, in order to apply them to the novel working arrangements that we see nowadays.

Fairer holiday

Mr Taylor has recommended allowing businesses to provide casual workers with a ‘rolled-up’ rate of pay, inclusive of their normal basic pay and any accrued holiday pay.  In this way, they would receive holiday pay as they go along, rather than when they actually take their leave.  This is a practice already widely used in relation to casual workers; the problem is that it does not currently comply with the provisions of the Working Time Regulations 1998.

New ‘rights to request’

Mr Taylor suggests that agency workers who have worked on the same ‘assignment’ for 12 months or more, should be entitled to request a direct contract of employment with the business for which they work.  In a similar vein, ‘zero hours’ workers should be entitled to request a contract with guaranteed hours after 12 months’ service.  Mr Taylor is not the first person to suggest such measures; will he succeed where others have failed? 

So what now?

Many organisations have been quick to criticise Mr Taylor’s report.  Unsurprisingly, business groups have suggested the measures go too far, whilst trade unions feel they do not go far enough.  Of course, reports of this nature are only as good as the efforts made to implement their findings.  Some commentators are already questioning whether Mr Taylor will garner sufficient political support to turn his ambitions into government policy.  When politicians of all persuasions are so distracted by ‘Brexit’, what are the chances of Theresa May (and friends) finding the time or the inclination to roll out the sorts of policies that Mr Taylor has in mind?

I remain unconvinced about the chances of many (if any) of the Taylor recommendations being put into practice any time soon.  However, I would be very happy to be proved wrong!

James Willis
Head of Employment

What should you consider before issuing a claim?

By Lucy Penfold, solicitor at stevensdrake

Asking yourself: “what should I consider before issuing a claim” is a very good question and the answer may not be straightforward, as Lucy Penfold explains:  

This article explores some of the different questions you should be asking yourself before jumping into issuing a claim against another person, or company. 

1 – Who is the other party?

This is one of the first things to consider if you have a dispute, before you even contact the other side. For example, if your claim is against a company, you should consider whether you ought to sue any of the directors personally at the same time. 

Perhaps your claim is against multiple people. Perhaps your claim is against just one person, but they have no money, no job, and no assets, thus you would have no way of enforcing your judgment if you were successful. 

You also need to look at where the other party is located. If they are not located in the UK but proceedings must be bought in the UK, you may need to make an application to the court asking permission to serve your claim outside of the jurisdiction.

2 – Do I have good evidence to support a claim?

To bring a claim, you will need to prove you have a claim by relying on evidence. For example, in a breach of contract case, you would be expected to rely on the contract itself, and then prove that a particular clause in the contract has been breached. You would then have to prove your loss, for example, if you have had to pay money to someone else to complete or redo work which they should have done. Loss can be shown by receipts, invoices, quotations etc. 

You should calculate exactly what your claim would be. If your claim is to recover loss, can you include loss of profit? Can you add interest? If yes, how much? 

Your solicitor should review the documents at the beginning to see if you have a claim, what your claim can be and whether the documents contain any agreements as to how disputes should be resolved. 

At this stage, it’s also important to consider any limitation periods.

3 – Have you complied with the pre-action protocols? 

You may not be familiar with the pre-action protocols. These are contained in the rules which we all have to follow in any litigation: the Civil Procedure Rules. Pre-action requirements vary depending on what claim you are bringing. In a money claim for example, one of the requirements is to send the other side a letter before commencing proceedings, called a Letter before Claim. The purpose of this is to put the other side on notice that you are contemplating issuing a claim if the issue cannot be resolved, this prompts settlement negotiations and attempts to limit any issues before proceedings are issued. 

If you do not comply with the pre-action protocols, you could be penalised by the court when it comes down to the question of costs. 

4 – Should you make any pre-action applications or are there any other remedies available?

There may be other interim remedies available, instead of a court claim, via an injunction for example. You may want to consider applying for pre-action disclosure if you consider the other party has key documents relevant to your claim. Or, perhaps there is a reason to believe that the other side will dissipate their money and assets, and therefore not be able to pay the judgment amount; in this situation you could consider a security for costs application. 

Importantly, the matter could also be resolved by alternative dispute resolution. Court proceedings should be a last resort. Sometimes settlement negotiations can go on for long periods of time, but sometimes they are necessary to limit the issues involved and reduce the claim. 

In Summary

The above are just some of the questions you should be considering before issuing a claim. It is important to fully understand what is involved in the dispute resolution process, the time and costs involved, and any alternative methods of dispute resolution which may be available to you. 

If you have any questions surrounding disputes, stevensdrake can review the documents and assess whether you have a claim, what options are available to you, and whether court proceedings are the correct method of dealing with the dispute. 

We ensure we have a suitable case management approach for each individual case, from the outset, and that any surprises which may arise during pre-action conduct, or proceedings themselves, are dealt with efficiently and effectively. 

If you would like to speak to our litigation team, you can contact Lucy Penfold on 01293 596984 or email lucy.penfold@stevensdrake.com

Does making a settlement offer weaken your case? And a look at ‘Part 36’ Offers

By Lucy Penfold, solicitor at stevensdrake

Making settlement offers can be a tactical way of ‘getting what you want’. However, persuading someone to say yes, instead of no, can be tricky.

Everyone has participated in negotiations at some point in their life, some more than others. This could vary from persuading your children to eat their vegetables and as a ‘reward’ they can have pudding, or negotiating a pay rise at work and in return you’ll increase your target for the next year.

Whatever the dispute, each person has their own side and opinion, and each will have to make a compromise to reach a middle ground. Perhaps you reach an agreement, perhaps you don’t.

How to settle it will depend on the type of dispute. For example, a big family disagreement might benefit from engaging in mediation, as one party may just be looking for a simple apology. This method however may not be suitable for a multi-million pound corporate dispute, where the issue is purely about money. In that situation, the parties could engage in written negotiations, aiming to limit the areas of dispute, and then consider making tactical offers under Part 36 of the Civil Procedure Rules…sorry stepping into some legal speak. To explain, a Part 36 offer is an offer to settle the claim which complies with the requirements set out in the rules which all lawyers and courts follow, the Civil Procedure Rules. This rule provides for specific cost consequences where there has been a Part 36 offer that was not accepted and the party to whom the offer was made then fails to achieve a better result at trial.

Part 36 offers are tactical because they can put pressure on the other side to settle, but also protect you with regard exposure to costs. As with the rest of the Civil Procedure Rules there are strict requirements that you must comply with if you intend your offer to have the consequences of Part 36. These are outlined in detail in the Rules, for example, the offer must clearly state that it is made under Part 36 of the Civil Procedure Rules.

There may be times where a Part 36 offer may not be suitable for your case, or perhaps you are not yet in a position to make a Part 36 offer. There are other types of offers you can make. For example, simple ‘without prejudice save as to costs’ offers, otherwise known as ‘Calderbank offers’. My clients often ask me whether it will weaken their case if they make a settlement offer. The short answer is no, providing it is made without prejudice. This means, that if the matter did escalate to court, all without prejudice correspondence and negotiations are kept private from the judge, so the judge’s decision is not swayed either way. It is common ground between lawyers and judges that court action should be a last resort. You could face cost penalties if you took a matter to court and refused to engage in some form of alternative dispute resolution, such as mediation or written negotiations. If you mark your settlement letters ‘without prejudice save as to costs’ you can bring that letter to the judges attention, once judgment has been given, so any offers can be considered when it comes down to the question of who pays what costs.

Our litigation team at stevensdrake can advise you on which methods of settlement are appropriate for your case, and give you advice as to when the best tactical time will be to make settlement offers. We can liaise with the other side, and attack their merits, rather than attack them. Depending on your goal, stevensdrake can work towards a suitable process for dealing with any differences you may have with the other side and find comfortable methods of settlement for you. Sometimes settlement does not work. Sometimes the other side might be stubborn and not give in at all. In those situations, stevensdrake will advise you on the best methods of settlement negotiations, which may not result in a settlement, but may protect you when it comes down to costs. The art is to encourage the other side to agree with what you want, while making them believe they are getting a good deal.

If you have a dispute, or would like advice on settling disputes, then please contact Lucy Penfold on 01293 596984 or lucy.penfold@stevensdrake.com.