Member News

A recent decision of the High Court (Chancery Division) has upheld post termination restrictions contained in an unsigned contract of employment. Professional Support Lawyer Elizabeth Stevens and Trainee Solicitor Laura Tanguay report.

In the recent case of FW Farnsworth Limited v Lacy, the employee (Mr Lacy) had been promoted to the position of ‘site technical manager’ in April 2009 and was eventually (five months later) issued with a new contract of employment containing post-termination restrictive covenants. Mr Lacy did not sign or return his revised contract of employment; he briefly looked at it before putting it in a desk drawer, but he raised no express objections to the contract.

The new contract included a number of new employee benefits, including private medical insurance and a pension scheme, in addition to the restrictive covenants. Following his resignation in March 2012 in order to work for a competitor of his employer, Mr Lacy sought to argue that he was not bound by any of the restrictive covenants because he had not signed the contract of employment. His employer brought proceedings in the High Court to enforce the restrictive covenants, which would prevent him from working for the competitor for six months following the termination of his employment.

The Court held that Mr Lacy had impliedly accepted the new contract, as he had taken advantage of the enhanced employee benefits under the contract (including applying for the private medical insurance), without any protest or reservation, and was therefore bound by the agreement. The restrictive covenants were therefore enforceable.

Comment

Although the restrictive covenants were held to be enforceable in this instance, the case is a useful reminder of the importance of (1) issuing revised contracts of employment to employees who have been promoted, and (2) ensuring that revised contracts are signed and returned by the employee.

It is much easier to rely on signed contracts of employment than to succeed in arguing at a later date that a revised contract has been impliedly accepted by the employee. HR practitioners should therefore ensure that they diarise deadlines for obtaining signed contracts of employment from employees, and to actively encourage employees to raise any concerns about a new contract at the point it is issued. This will make it much harder for an employee to argue that they are not bound by any new terms under the contract at a later date.

Following the Government’s recent announcement that it was planning to introduce a new type of employment contract, conferring ’employee-owner’ status on individuals in exchange for giving up certain employment rights, a formal consultation on the proposals has now been issued. Professional Support Lawyer Elizabeth Stevens comments.

As we reported in our recent news briefing, the Government is intending to introduce a new type of employment status known as ’employee-owner’, whereby an individual is issued with shares in the business worth between £2,000 and £50,000 in exchange for forgoing certain employment rights.

A BIS consultation has now been issued on these proposals, with only a very short timeframe for responses (the consultation closes on 8 November 2012). The Government has already drafted the necessary legislative measures within the Growth and Infrastructure Bill, which had its second debate in the House of Commons on 30 October 2012. If enacted, this would introduce a new section under the Employment Rights Act 1996 setting out the provisions governing the employee-owner contract.

The Government has stated its intention for the ’employee-owner’ provisions to come into force from April 2013. It therefore seems almost certain that this new form of contract will take effect, although there remain a number of unanswered questions about how the proposals will work in practice.

The consultation itself provides very little extra detail on the proposals. In particular, it does not set out how the employee’s shares will be valued on the termination of an individual’s employment, when the employer will have to buy back the shares. The consultation likewise does not set out any mechanism for resolving disputes about the value of the shares on termination, which could prove to be an area of costly litigation for both parties. The Government has stated that it intends to consult separately on how to simplify the existing process for buying back shares from ex-employees under employee share schemes.

The consultation confirms that ’employee-owners’ will not be entitled to a redundancy payment or to bring a claim for unfair dismissal, unless the dismissal is for an automatically unfair reason or is discriminatory. However, the consultation makes no mention of what will happen in the event of a TUPE transfer, when the employee-owner’s employment transfers to a new employer.

It seems unlikely that the new ’employee-owner’ status will prove attractive to many businesses or individuals, and it is aimed principally at new and fast-growing companies. Such contracts can only be entered into with the agreement of both parties, meaning that it cannot be imposed on either existing or potential employees (although in practice, a new recruit will probably have little choice). In addition, the employer would need to put in place a qualifying employee share scheme, which would require specialist advice and careful drafting, before offering these new types of contract.

A copy of the consultation is available here

Leathes Prior are delighted to announce the appointment of Chartered Legal Executive Jill Wheeler, who joins the firm on 1st November 2012.

Jill has previously worked at Eversheds and Fosters and brings with her many years’ experience. At Leathes Prior, Jill will work alongside Partner and Head of the Real Estate Team, Rob Sibley, to grow the firm’s residential conveyancing services, alongside the firm’s existing fee earners Liz Coleman and Sarah Waddington.

Jill comments: “I am very excited at the prospect of joining Leathes Prior. Buying or selling a property can be stressful and it is my job to take that stress away. Building a strong relationship with my clients is key to a successful resolution of a conveyancing transaction. I enjoy looking after my clients personally and ensure all of their needs are met. I pride myself in bringing back to basics the sort of qualities we all remember from “yesteryear”. I work to ensure 100% client satisfaction; I offer a high-quality bespoke, competitively priced service.”

Rob Sibley, Partner and Head of Real Estate comments: “Jill has been on our radar for a number of years and the partners are delighted to have secured her services against stiff opposition. Her experience and driving force will ensure that the Real Estate Team continues to thrive and further expansion is anticipated.”

Telecoms Disaster Recovery – How to take control Inbound telephone calls are the life blood of most businesses; yet very few Companies have a pre-defined disaster recovery plan. Being unable to either receive or efficiently handle calls can only lead to lost sales, lost revenue and lost customers. Most commonly businesses will have geographic telephone numbers pre-fixed 01 or 02. These will be delivered from the local exchange across either analogue or ISDN lines. If you have a line issue then you can call your Service Provide and as part of the fault reporting process request all calls to be diverted to another number such as a mobile or another landline. Let’s face it, unless you are fortunate enough to have a second multi line site; delivering all calls to a single mobile is really a “sticking plaster” fix. Worse still, the issue may not be a line fault. It may be a telephone system hardware issue, a power cut, a fire alarm or just bad weather stopping you from opening the office. Arranging a divert then becomes an extremely difficult process as the Faults department will often refer you to Sales who in turn have to raise orders which have lead times. All in all this is an extremely frustrating process especially when you are losing business and giving your valued customers poor service. Many customers have overcome this by using Non-Geographic numbers such as 0800, 0845 and 0870; more recently 0844, 0871 and 0333. These can be delivered to any landline or mobile number hence enhancing the ease of arranging diverts, especially in a “non-fault” scenario. In many cases there will still be a lead time to initiate and the calls will still only be delivered to a single number. However, Non-Geographic numbers are delivered from an “intelligent” network which can provide pre-defined disaster recovery routing plans that can be deployed within minutes rather than hours or days. Not only can you deliver your calls to multiple sites or numbers, you can also have pre-set voicemail messages to keep your customers informed. “That’s great” I hear you say, “But I don’t have a Non-Geographic number! I have been advertising the same 01603 Norwich number for 30 years and all my customers know it!” Well that’s OK, it can be ported to the same Non-Geographic network and receive the same benefits. This doesn’t necessarily mean moving to a VoIP solution as you can retain your analogue or ISDN lines on your existing system with “dummy” numbers. Now you can seriously look at efficient Disaster Recovery options such as mapping DDI numbers to individual’s mobile numbers and so on. This also opens up a whole raft of new benefits such splitting calls between sites based on a percentage of calls or number of lines. You can route callers based on their CLI; i.e. callers from 01603 are answered at your Norwich office and from 0207 at your London Office. Also, you have now ensured that you can keep your number even if you move to a different exchange. Even DDI numbers can be retained and mapped correctly to individuals without the need for change. This is a major benefit as the standard service for Geographic DDI numbers is a simple message that asks callers to dial a single number. Now, not many things in life are free and setting up this type of solution is no different. However, you may be surprised how little this can cost; especially when compared to the potential loss of business if you don’t! Using the intelligent call routing services of a Non Geographic network, coupled with a hosted VoIP solution really starts to build a powerful solution for any business. Not only can you instigate disaster recovery plans by making a simple quick phone call, you can now just log on from anywhere you have an internet connection and its business as usual. These are not “off the shelf” products so please feel free to call Kevin Cooper at Breakwater IT to see if a solution can be built for your Company.

On Friday, November 9th, Wymondham College is holding a “Futures” event at the Kings Centre in Norwich. This is a careers information day aimed at providing year 10 GCSE students (of three local schools) with information about routes into career opportunities in various sectors before they choose their post-16 study options.

The day runs from 10am-3pm, and we’re looking for speakers for thirty-minute slots in the afternoon which students would sign up to attend:

1.00 – 1.30 1.45 – 2.15 2.30 – 3.00

The aim of the talksare to provide students with information about the various routes into your sector of employment, from apprenticeships, A-levels, degrees and vocational qualifications through to the ‘soft skills’ they would need to succeed, such as communication or presentation skills.

Please get in touch if you are interested in speaking!

Callie Oatridge Marketing and Development 01953 609000 ext 4385Oatridca.staff@wymondhamcollege.org

Visit Tunisia for the best priced All Inclusive holidays from Norwich next summer.

Leading package holiday specialist Thomson Holidays NEW summer 2013 flight from Norwich to Tunisia is currently offering the best priced all inclusive deals from the airport. Available weekly on Thursdays from 23 May to 19 September 2013 packages start from £339 per person for seven nights all inclusive on 30th May and this price includes return flights, luggage and transfers. With a fabulous range of three to five star hotels to choose from, there is certainly something to suit all styles and budgets!

Savvy East Anglian holidaymakers are encouraged to book now to secure their holiday at a great price as the trend is switching towards some the best deals being made available for early bookings.

Andrew Bell, CEO of Norwich International commented “We are delighted that Thomson Holidays have added the new route of Tunisia to the fantastic range of destinations available direct from Norwich for summer 13 which will enable local holidaymakers to fly directly from Norwich to Tunisia with Thomson for the first time. We are certain this popular destination will prove a hit with our customers, with its beautiful beaches, great value package deals, fantastic climate and flight duration of under 4 hours, it is a perfect getaway for families, couples and groups alike. This development further demonstrates the strength of the growth in charter flights from Norwich International next year – our customers now have over twenty direct sun and city destinations to choose from with some of the leading tour operators and airlines”

For more information on great value package holidays from Norwich to Tunisia please call Travel Norwich Airport on 01603 428700, visit www.thomson.co.uk or see your local travel agent.

Epic is hosting an evening where you can be sure to be delighted and surprised.

Cocktails & Confusion promises to be Norwich’s most exciting night out this Christmas. We have assembled a dazzling array of comedians, magicians, vocalists, performers and topped up with a stunning live music finale from top band The Collective.

And that’s only what we’re admitting to, there’s plenty more hidden up our sleeves… follow us on twitter @cocktails_confu or #tag #cocktailsandconfusion.

It will be a mesmerising mix of entertainment served up in a truly stylish fashion. Simply let the evening happen around you while you enjoy good food, great cocktails and a fantastic night out.

We promise to confuse, delight and entertain you as never before.

Be a part of something special this Christmas… Limited tickets available.

Tickets £60 including canapé supper, live band and as much entertainment as you can squeeze into one night.

Bigfork were commissioned by Norwich based marketing agency, oneonone communications, to design and build a new website for luxury hotel, Barnham Broom as part of a new overall marketing strategy. The brief was to produce a new website that positioned the hotel at the luxury end of the hotel market. oneonone communications carried out target audience research and a user experience audit to develop a website plan.

Using this successful approach to website design a content plan was produced that focused on the key offerings of the hotel. Calls to action such as online bookings were added along with a content management system that allows the Barnham Broom team to manage content in-house. The final design, combined with new photography, is modern and contemporary and can be seen at https://www.barnham-broom.co.uk

Millions of households will receive letters from HMRC over the next few days about changes in Child Benefit which could affect tax codes, according to leading accountants and business advisers PKF.

From January 7th, 2013, an element of means testing will apply to Child Benefit administered by HMRC – and PKF’s Norwich-based Director of Tax Andrew Robinson warned that some families could be hit hard by the changes.

“There are doubts about the fairness of the system and the risk of some conflict where the person entitled to Child Benefit will have to ask a partner details of their income,” he said. “It seems to completely ignore the concept of independence and confidentiality on incomes. Questions have even been raised on whether it impinges on human rights.”

The HMRC letters will go out to all claimants who might be impacted by the law changes – although Child Benefit will remain distinct from the child and working tax credits (and the universal credit when this is eventually introduced).

Claimants will be asked if they wish to opt out of receiving the benefit. HMRC will also have to warn those who maintain their current claim that the benefit will start to be clawed back through claimant’s tax codes or tax assessments where annual income exceeds £50,000. The clawback will be at 1% of the benefit for every £100 of income over £50,000, so that when income reaches £60,000, the financial benefit of the claim is lost.

Andrew explained: “For many couples where the £60,000 earnings threshold is expected to be exceeded by one person, it is likely to prove simpler to opt out of receiving Child Benefit initially rather than risk errors arising through a tax code adjustment. But even here there can be complications with National Insurance issues to consider for those who give up work to look after children.

Controversially, the clawback rules apply to the claimant’s partner (spouse, civil partner or cohabitee) as well as the claimant. For example, if a person claims Child Benefit and has an annual income of £25,000 but the person’s partner has income of £65,000, the benefit will be paid direct to the claimant’s bank account as now, but clawed back from the partner via the tax code applied to his or her salary (the clawback charge will always fall on the higher earner).

This new high income child benefit charge will be collected by HMRC through PAYE adjustments in 2013/14 or through the tax return of the higher earner of an affected couple. However, if both partners can reduce their taxable income for the current year to less than £50,000, they will get to keep the full value of their child benefit.

“There may be a number of options for reducing taxable income to make the anomalies in the rules work in your favour,” said Andrew. These include making pension contributions, using a salary sacrifice arrangement if offered by your employer, transferring income producing assets and even getting your parents to make pension contributions on your behalf. But it is important to take special advice to make sure your plans are cost-efficient.

“In other cases, where incomes are variable or fall into the £50,000 to £60,000 band, where domestic partnerships end or new partnerships are created, there are bound to be difficulties and under or overpayments may well arise. Here the best option will probably be to claim the payments but report any income fluctuations or changes to HMRC as soon as they arise (as with the tax credits system, it is up to you to report any changes).

“The Government has sought to resolve the longstanding problem that parents who give up work to look after children create a gap in their National Insurance contributions record and miss out on a full state pension on retirement.

“Now, a parent who stays at home to look after a child under the age of 12, and who registers for child benefit, will qualify for Class 3 National Insurance credits to maintain his or her contributions record.

“Fortunately, those who register for Child Benefit can also now elect for benefit payments not to be made, and thus can avoid the need for claw back from a spouse or partner earning over £50,000.

Andrew concluded: “Clearly these changes will have an adverse impact upon some households with lower incomes than others due to the anomaly of the income threshold. You may find a household with a combined income of £99,999 does not lose child benefit whereas one with a single income of just over £50,000 will lose out. As ever it is important not to ignore any letters which HMRC issue and to seek advice if you are confused about how these changes will affect you and how to limit the damage.”

For further information, please contact Andrew Robinson, Director of Tax (t: 01603 756911, e: andrew.robinson@uk.pkf.com)

The Government has proposed further amendments to the Enterprise and Regulatory Reform Bill, in order to repeal certain provisions under the Equality Act 2010. Professional Support Lawyer Elizabeth Stevens reports.

The Government has confirmed its intention to repeal the provisions in the Equality Act 2010 relating to third party harassment and the discrimination questionnaire procedure. It has also introduced new powers for tribunals to order a compulsory pay audit.

Third party harassment

Currently, employers can potentially be held liable for the harassment of their employees by a third party (such as a client or supplier), if harassment has taken place on at least two previous occasions and the employer has failed to take reasonably practicable steps to prevent the harassment from occurring (Section 40 Equality Act 2010).

The Government has recently published a response to its consultation on proposals to remove these provisions. Only 20% of respondents agreed with the proposal, with 71% opposing it. However, the consultation response highlights the lack of specific or quantifiable evidence to support the views of those who responded to the consultation, and the Government believes that both the concept and the intention behind the provisions are widely misunderstood. The Government has therefore concluded that it is not necessary to retain the third party harassment provisions.

Amendments made to the Enterprise and Regulatory Reform Bill will repeal the relevant sections of the Equality Act 2010. We do not yet have a date for when this will take effect, and in the meantime the third party harassment provisions will remain in force.

A copy of the Government’s response to the consultation on third party harassment is available here.

Discrimination questionnaires

The Government has also issued its response to the recent consultation on proposals to repeal the provisions under the Equality Act 2010 that currently allow individuals who believe they may have been discriminated against to obtain information (by issuing their employer with a discrimination questionnaire), and to remove the ability for employment tribunals to make wider recommendations in successful discrimination claims (recommendations applying to the wider workforce rather than just the individual claimant).

Only 15% of respondents were in favour of repealing the questionnaire procedure, but in the Government’s view it is “prescriptive and potentially threatening to employers”, and it plans to proceed with the repeal of section 138 Equality Act 2010.

The Government has indicated that the removal of the formal questionnaire procedure will not prevent any individual from seeking pre-claim information through a more informal route. An employment tribunal may still draw adverse inferences from an employer’s refusal to respond to a request for information, or from evasive answers.

It appears that the Government is not yet proceeding with its proposal to remove the ability for employment tribunals to make wider recommendations. A copy of the Government’s response to the consultation on discrimination questionnaires and the power for tribunals to make wider recommendations is available here.

Equal pay audits

The Government has made a further amendment to the Enterprise and Regulatory Reform Bill, to give employment tribunals a new power to order compulsory pay audits where an employer has lost a claim for equal pay. Regulations will set out further details of the content of such audits and the extent of the tribunals’ powers and duties in relation to them.

The Enterprise and Regulatory Reform Bill reached the Report stage and had its third reading in the House of Commons on 16 and 17 October 2012. It will then have its first reading in the House of Lords. It is not yet known when the Bill will receive Royal Assent.

The winner of our Kindle Prize Draw held at the Chambers B2B exhibition is Talib Fehlhaber, owner of The Rapid Defence Martial Arts Academy in Norwich. Congratulations to Talib who assures us the Kindle will disappear as soon as his wife tries it! His new Kindle will also be ideal for previewing his forthcoming book “Kickstart Your Own Martial Arts School”.

Thanks to all who entered the draw and it was great to meet so many new people and Bigfork clients who visited our stand at the B2B exhibition.

KLM INCREASES SERVICES FROM NORWICH – Fourth daily frequency commences from start of Summer Schedule 2013 –

KLM Royal Dutch Airlines will add a fourth daily flight from Norwich International Airport (NWI) to Amsterdam Airport Schiphol (AMS) from Sunday 31 March, 2013. The new frequency will offer a more flexible and business friendly schedule and increase long-haul connectivity via KLM’s Amsterdam Schiphol hub.

The new frequency will be bookable from 20 October, with travel from 1 April 2013 and will increase capacity on the route by 33%. Return flights from Norwich to Amsterdam begin from just £119 return including all taxes. The increased frequency on the route cements Norwich International Airport’s position as one of the building blocks of KLM’s extensive UK network. Load factors on the route have increased year on year with average load factors now running at 73.3%, one of the highest across KLM’s UK network. Forward bookings to Amsterdam are also up by 4% year on year.

Comments Henri Hourcade, AIR FRANCE KLM, General Manager UK & Ireland: “The addition of a fourth frequency from Norwich demonstrates our commitment to the region. The increase in frequencies will streamline the region’s worldwide connectivity via Amsterdam Airport Schiphol and provide passengers with a more flexible service. For businesses, the extra frequency will allow for swifter connections to our long-haul network and in addition, it will give far greater flexibility to travellers doing business in Amsterdam and Europe who need to return to Norwich on the same day.”

The most popular long haul destinations from Norwich are Bangkok, Dubai, Hong Kong and New York, whilst popular European routes include Berlin, Billund, Frankfurt and Trondheim. The new flight schedule will be:

From Norwich International Airport to Amsterdam Airport Schiphol:

• KL1502 06.15 08.10
• KL1506 09.45 11.40
• KL1508 13.55 15.50
• KL1512 17.15 19.10

From Amsterdam Airport Schiphol to Norwich International Airport:

• KL1505 09.20 09.10
• KL1507 13.30 13.20
• KL1511 16.50 16.40
• KL1515 21.15 21.05

For further information, please contact Samantha Darlaston, Danielle Wright, Niamh Commins or Camilla Jenkin at Consolidated PR on 020 7781 2300; email klm@consolidatedpr.com