Member News

Ed Savory, an Associate in Leathes Prior’s Franchising Team, attended the bfa London & South East Regional Forum. Each quarter, franchisors and advisers in the Franchise Industry meet to discuss the current “hot topics” in the market.

The following issues were discussed:

Updating franchise documentation – how, when & why? It is important to keep documentation under constant review and this does not just mean the Franchise Agreement. In particular, think about marketing materials, website, Franchise Information Memorandum (FIM) and Manual. The risk for franchisors is being sued by a franchisee for over selling the business proposition. This is not helped by any provisions of the Franchise Agreement which are out of date being unenforceable.

Franchisors would be well advised to appoint one person to be responsible for reviewing and updating documentation and, of course, advice from their solicitors should be at hand.

Protection of franchisor Intellectual Property (IP) First of all a reminder was given of exactly what IP is – essentially the brand and the unique franchised business system, all know how as set out in the operations manual. The registration of trademark(s) is an important initial step – remember that the correct class(es) should be applied in order to make the registration fully effective. If your business used a designer (or some other third party) to create the brand then you should ensure that all rights in the design rights have been duly assigned. The franchisee’s employment contracts should also contain relevant restrictions.

Franchisee improvements – embrace or dismiss? Franchise success is about both consistency and constant development. Whilst all franchisees must adhere to the system if any of them have any suggestions for improvements then these should be embraced. Furthermore, the proposing franchisee can act as a guinea pig for trying out a certain idea before full roll-out across the network.

How to educate the general public about franchising The bfa is looking closely at how to educate the general public about franchising – that is business format franchising. The next bfa Chairman (Sir Bernard Ingham retired this year) should be a generally recognisable figurehead. Franchisee membership should also assist.

Franchisee recruitment – what are franchisors experiencing? The evolution of online marketing has meant that most franchises are now using a “mix of media” in order to promote sales both in terms of new franchisees and business generally. The current market trend is that the time taken to recruit is slowing as prospective franchisees are more cautious about taking the leap.

bfa Natwest survey The bfa survey (as previously reported on) shows that the franchising industry in the UK is stable and growing. 80% of franchisees are generally happy, 929 franchises in operation in the UK with franchisees in 40,000 locations with a total turnover of £13.5bn.

Section 73 of the Charities Act 2006 (CA 2006) requires the Minister for the Cabinet Office to appoint a person to review the operation of CA 2006 within five years of its commencement. Lord Hodgson of Astley Abbotts was appointed as the reviewer and on 16 July 2012 his report, Trusted and Independent: Giving charity back to charities, was published and presented to Parliament. The 159 page report contains over of 100 detailed recommendations.

Insofar as disposals – the sale, leasing or mortgaging – of land or property by charities are concerned, the report has concluded that the current regime is disproportionate. It recommends complete deregulation, leaving charity trustees to instead act under their general duty of care and with reference to Charity Commission guidance. However, sensibly, it has also recommended that charities continue to obtain the Charity Commission’s consent for the sale or leasing of charity land and the granting mortgages and other charges to “connected persons”.

While most practitioners will agree that the current restrictions on disposing of charity land and mortgaging can be cumbersome and add unnecessary time delays and costs to transactions, Lord Hodgson’s proposal to entirely deregulate these areas is a little surprising. Deregulation may give practitioners freedom to give more appropriate and proportionate advice on charity land transactions, but it would also scrap rules that help to reinforce the duty of charity trustees to make properly informed decisions before committing to transactions that are often vital to their charity’s activities.

It remains to be seen which of Lord Hodgson’s recommendations are implemented and how quickly, but watch this space.

Steeles Law’s Michael Fahy looks at some of the more contentious property aspects surrounding wind farms.

Click here to view the article in full published by Local Government Lawyer.

Do you know the latest position on sickness absence and holiday entitlement? When it is safe to dismiss an employee accused of criminal activities? Are you confident about when and how to hold ‘without prejudice’ discussions with your employees?

Steeles Law is proud to be sponsoring and hosting the Norfolk Chamber of Commerce HR Forum on Wednesday, 12 September 2012. Expert speakers from the Steeles Law employment team will be covering a number of notoriously tricky issues in the workplace at this HR Forum:

• Sickness absence and holiday: the latest position on holiday entitlement during sickness absence, including the latest court rulings and proposals for amending the Working Time Regulations 1998.• ‘Without prejudice’ conversations: when and how to go about holding these difficult conversations, including new proposals for ‘protected conversations’ under the Enterprise and Regulatory Reform Bill.• Bonuses and maternity leave: considering the legal position in relation to the entitlement to bonuses of women on maternity leave.• Criminal activities: dealing fairly with an employee accused of a criminal offence outside the workplace.• Bank holidays: how to calculate bank holiday entitlement for part time employees• IVF treatment: looking at the legal position in relation to female employees undergoing IVF treatment.

Lorna Townsend, Principal in the Steeles Law employment team comments: “HR professionals frequently have to grapple with tricky areas of law for which there is not necessarily a black and white answer. At this Forum, through a number of practical case studies, we will tackle some of the tricky questions on which we have previously been asked to advise by our clients. We hope to provide some clear, practical advice on these topics together with the most up to date legal position, including future proposals for reform”.

The HR Forum will be held at Dunston Hall near Norwich, from 2.00pm to 5.00pm on 12 September 2012. Further information, including details of how to book, is available from the Chamber of Commerce website

Lexia Media is celebrating a successful start to the summer with new client wins.

The company has been selected by Echo Barrier to help enhance the company’s trade and national profile.

Echo Barrier is at the forefront of noise-reduction and is becoming internationally recognised for its acoustic barrier technology. The company’s product designs are helping construction and high footfall sites throughout the UK to achieve significantly reduced noise issues – benefiting both contractor and nearby communities.

The firm approached Lexia Media to take part in a competitive tender, before selecting them for the creativity of their proposals and their established credentials with trade and national PR.

Lexia has also been selected by SO ACTIVE, a social enterprise that helps people with their physical and mental health through sport, outdoor and leisure activities. Lexia will be helping SO ACTIVE increase brand awareness across Suffolk and throughout the UK, as they continue their successful growth.

Managing director Deborah Watson said: “We are very excited to be increasing our portfolio of clients with a range of national and local, trade and consumer clients. The team is looking forward to implementing some creative campaigns for these organisations. We’re delighted to have been chosen for these contracts and we’re excited to get started.”

Employment Principal Lorna Townsend considers a recent decision of the Employment Appeal Tribunal (EAT), in which it was held that a diminution in work alone did not result in a redundancy situation when there was no reduction in the number of employees required to carry out the work.

In this case (Welch v Taxi Owners Association (Grangemouth) Ltd), the claimant, a radio controller, brought a claim for constructive dismissal after her employer sought to impose a reduction in her hours. She argued before the tribunal that her employer should have approached the issue as a redundancy situation.

The tribunal hearing her claim concluded that there was no redundancy situation, since the company’s requirements for radio controllers had neither ceased nor diminished at the relevant time. It held that the claimant’s dismissal had been fair for ‘some other substantial reason’, namely the company’s genuine business need to reduce the hours of its radio controllers following a downturn in business.

The EAT has since upheld this decision, confirming that the claimant’s dismissal was not by reason of redundancy. In accordance with long-established case law authority, it was satisfied that for a redundancy situation to arise there must a diminution or cessation in the employer’s requirement for employees (i.e. the number of employees) to carry out the work in question, rather than merely a diminution in the work itself.

Comment

The difficulty with this decision is that it appears to directly conflict with the recent EAT decision in Packman t/a Packman Lucas Associates v Fauchon (see our previous briefing). In that case, a different division of the EAT concluded that an individual who was dismissed as a result of refusing to accept a significant reduction in hours was redundant, regardless of the fact that there was no reduction in the requirement for the number employees to carry out the work.

However, the present case was principally concerned with whether the claimant had been constructively dismissed, rather than the EAT considering in any detail the question of whether it could be interpreted as a redundancy situation.

In light of the apparent conflict between these two EAT decisions, an appeal to the Court of Appeal in either or both cases is desirable in order to clarify the position. In the meantime, employers should exercise caution in seeking to make any significant reduction in hours and be prepared for affected employees claiming a redundancy payment.

A copy of the EAT judgment is available here

Acas has issued new guidance for employers on managing redundancy for pregnant employees or those on maternity leave. Employment solicitor Sam Greenhalgh reports.

The new guidance, issued in conjunction with the Equality and Human Rights Commission, is a ‘good practice guide’ that is intended to dispel some of the myths that exist about making pregnant employees (or those absent on maternity leave) redundant.

This can be a tricky area for employers to negotiate their way through. The guide makes it clear that provided a fair procedure is followed, with appropriate criteria for selection and proper consultation carried out (adapted if necessary to take account of an employee’s absence), it is possible to carry out a fair redundancy process for those who are pregnant or on maternity leave.

The guidance highlights some of the necessary considerations to take into account in relation to pregnant employees and those on maternity leave, including the requirement to offer such employees any suitable alternative employment that may be available, in preference to other employees.

A copy of the new guidance is available here

The Court of Appeal has handed down its judgment in the case of NHS Leeds v Larner, dealing with the issue of carrying forward accrued holiday entitlement during sick leave. Professional Support lawyer, Elizabeth Stevens, reports.

In this case, the Employment Appeal Tribunal (EAT) had ruled that an employee who was dismissed after a long period of sickness absence was entitled to be paid in lieu of all her accrued holiday. The EAT was satisfied that she was entitled to be paid in lieu of the full amount, including in respect of the previous holiday year, even though she had not made any request to carry the leave forward (see our previous briefing).

Following this decision, the case of Fraser v Southwest London St George’s Mental Health Trust was heard by a different division of the EAT, which concluded that in order to be entitled to carry the leave forward to a subsequent holiday year, the employee must expressly request to take the leave (see our previous briefing).

As a consequence of these two EAT decisions we had conflicting authorities on the issue. The case of NHS Leeds v Larner was then appealed to the Court of Appeal and was heard on 27 March 2012. The decisions was handed down on 25 July 2012.

The Court of Appeal has upheld the EAT decision, meaning that a worker who has been on long-term sick leave can claim a payment in lieu of his or her accrued holiday entitlement in full, regardless of whether they made any request either to take the leave or to carry the leave forward to the next holiday year.

In handing down its judgment, the Court reviewed the numerous European decisions on the issue of statutory holiday entitlement during sickness absence under the provisions of the Working Time Directive (WTD). The Court was satisfied that Article 7 of the WTD, which provides the right to paid annual leave, does not impose any requirement for the worker to make a prior leave request in order for the holiday entitlement to be carried forward to a subsequent holiday year.

Crucially for private sector employers, the Court also ruled that it was possible for the Working Time Regulations 1998 to be interpreted in light of the European rulings on Article 7 WTD. This means that employees working in the private sector, as well as those in the public sector, can rely on these European decisions to pursue a claim for any unpaid holiday entitlement on termination of their employment.

Comment This decision means that, subject to any further appeal to the Supreme Court, employers will now have very little scope for refusing to pay employees in respect of their accrued holiday, if their employment is terminated following a long period of illness.

The Government is due to be issuing draft amendments to the current Working Time Regulations in order to take account of the European decisions on the issue of annual leave entitlement and sickness absence.

A copy of the Court of Appeal judgment is available here

From 6 April 2013, a new statutory test will replace the existing rules fordetermining if you are UK resident. While the test will provide clarity, it isimportant to understand it now so that you can plan ahead.

Take a look at our detailed flyer, which includes the test to see if it will affect you.

The firm’s Franchising Team recently enjoyed an evening’s sail on White Moth, a Norfolk Wherry Yacht. Wherries were originally trading vessels which used to sail the Norfolk Broads. Subsequently, some were developed to carry passengers and the Wherry Yachts were built as pleasure yachts early in the last century.

Jonathan Chadd, partner in the Franchising and Intellectual Property Team, advised on the purchase of White Moth by Andrew Scull. Mr Scull generously loans White Moth to the Wherry Yacht Charter Charitable Trust (WYCCT) so that she can be enjoyed by others. At the kind invitation of owner Andrew Scull and under the steady hand of skipper Peter Bower and his dog Sam the Team enjoyed a marvellous sail in perfect weather out from the Trust’s base in Wroxham and on to Wroxham Broad. Leathes Prior is proud to support the restoration and preservation work carried out to White Moth and other Norfolk Wherries. For more information about the WYCCT including the work it carries out and details of the yachts available for private charter, please visit: www.wherryyachtcharter.org

The Franchising team works closely with other departments within the firm to be one of very few firms which is able to offer the full complement of legal services to its franchising clients. 9 members of the firm, including members of the employment, commercial property, intellectual property, debt collection and dispute resolution teams accompanied the Franchising team on the trip. Jonathan Chadd thanked colleagues for their continual support of the Franchising team:

“The Franchise Team just wanted to thank all of you for your assistance to us and hope you enjoyed it.” Vicki Mitman, added: “It is great to have the assistance of other specialist teams within the firm as they ensure we are able to offer a comprehensive and competitive service.”

Lee is a FA and FIFA Licensed Football Agent, and joins Leathes Prior to work in Dan Chapman’s Sports Team, which trades under the style Full Contact (see www.fullcontactlaw.co.uk).

Lee will head up Full Contact’s player representation and agency division, acting for football players throughout the UK, Europe and beyond.

Lee brings vast experience as both a professional footballer and an agent and he will work closely with his legal, commercial and mentoring colleagues within Full Contact and Leathes Prior to allow us to offer players a service which truly is second to none.

Lee, whose background is steeped in football (his father was a football manager), decided to become a football agent once his playing career ending prematurely due to injury, and over many years he successfully built up an impressive roster of clients.

Adam Blenkinsop and Katy Kidd report on Lambeth Council’s recent success in obtaining injunctions against unlicensed ice cream traders in London’s South Bank, and outline the legal framework for local authorities bringing such actions.

Click here to view the article in full published by Local Government Lawyer.