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Stories included
- Employer prosecuted under minimum wage legislation
- Changes to planning rules could help businesses
- Start-up companies show UK’s enterprise spirit
- Appeal Court upholds restrictive covenant
- Landlords sign up for tenancy deposit schemes
- Smoking Stones told to stub it out
- Husband gets divorce payment reduced
- Courts can order that children be told their father’s identity
- Cohabiting couples could get more protection
- Three out of four unprepared for mental incapacity
- HIPs move on to the second stage
Employer prosecuted under minimum wage legislation
A children’s nursery owner has been fined £2500 in the first criminal prosecution to be brought under the National Minimum Wage legislation.
Teresa Aguda, who owns the Rascals Day Nursery in Walthamstow, pleaded guilty to a charge of obstruction after she prevented HM Revenue and Customs officers from accessing her records so they could check if staff were being paid the minimum wage. She was also ordered to pay £500 costs.
Andy Millican, of the HMRC Criminal Investigation Team, said: “The majority of employers do assist us with our investigations, but if they don't we will pursue cases through the criminal courts. If employers obstruct us and refuse to comply with the law they could receive a fine and a criminal record."
Employers need to be aware that there are six criminal offences under section 31 of the National Minimum Wage Act. These are:
Refusing or wilfully neglecting to pay the minimum wage
Failing to keep or preserve records
Knowingly causing or allowing false entries to be made in records
Producing false records or information
Delaying or obstructing a compliance officer
Refusing to answer questions or produce documents for a compliance officer
Each offence carries a maximum fine of £5000 and creates a criminal record.
Changes to planning rules could help businesses
Research is being carried out to see how planning regulations could be changed to make it easier for businesses to build extensions and make improvements to their premises.
The Government has asked White Young Green Planning (WYGP) to investigate whether the need for planning permission could be removed from minor developments such as small-scale extensions or alterations to shop fronts.
A development could only be excluded from the planning system if it was clear that it had little or no impact on nearby properties and the environment. Any changes therefore will need to enable local authorities to retain the right to restrict planning permission if necessary to safeguard against eyesore developments.
The planning rules could also be changed to make it easier for businesses to install ‘green’ technologies like solar panels and wind turbines. The Communities Secretary, Hazel Blears, has asked the environmental and planning consultants Entec to develop a new set of regulations that will encourage the use of renewable energy.
A Government spokesman said that at the moment, businesses have to go through the planning system just to install a solar panel. This can cost up to £1,500 and take up to 16 weeks without any guarantee that it will be approved.
Entec has been asked to investigate how renewable energy equipment could be classified as ‘permitted developments’ which do not need planning permission as long as there is no impact on others. Any changes would have to include safeguards for cases where the benefit of the technology is outweighed by its impact on the local environment.
WYGP and Entec are expected to report back by the end of this year.
Start-up companies show UK’s enterprise spirit
The number of small and medium size businesses in Britain rose by 125,000 in 2005, the most recent year for which figures are available.
That was an increase of 2.9% bringing the total number of businesses in the UK at the start of 2006 to 4.5million. The research, published by the Department for Business, Enterprise and Regulatory Reform, shows that 99.3% of businesses are classified as small because they have up to 49 employees. Only 0.6% are medium size employing 50 to 249 employees and only 0.1% are large with more than 250 employees.
Small and medium size enterprises provide 58.9% of the UK’s employment and 51.9% of its turnover.
The figures show the vital role that SMEs play in the national economy and it is encouraging to see that more and more people are prepared to take the plunge and set up their own businesses.
It can be an exciting challenge but anyone contemplating starting a new enterprise should make sure they do all the necessary research in advance as there are several pitfalls that could easily stifle progress or lead to failure.
Start-up businesses may need to consider a variety of issues from employment matters to business contracts and leasehold agreements. There could also be concerns about how to structure the business and whether it is better to start as a sole trader, or form a partnership or a new company.
Getting good legal advice at the outset can prevent damaging problems emerging later.
Appeal Court upholds restrictive covenant
An investment group has won an Appeal Court ruling enforcing a restrictive covenant on two former employees.
Beckett Investment Management Group Ltd wanted to uphold a non-dealing clause which would prevent two of its former financial advisers from dealing with the clients they had helped while working for the company.
The High Court refused to enforce the covenant because it ruled that the clause related to clients of the parent company which had no business interests that needed protection, rather than its subsidiary companies which did have need of such protection and for which the two employees had done most of their work.
However, the Court of Appeal considered that view to be too narrow and overturned the ruling.
Lord Justice Maurice Kay said the subsidiaries were in fact the agencies which allowed the parent company to conduct its business and so the restrictive clause should stand.
Although the company was successful in this case, it would be wise for employers to get a contractual agreement with staff that such restrictive covenants covered not only the parent company but all its subsidiaries as well.
Landlords sign up for tenancy deposit schemes
Thousands of landlords are now taking part in the Tenancy Deposit Protection schemes, according to figures released by the Government.
The Department of Communities and Local Government says that 66,000 deposits worth a total of £58m were protected in the first two months of the scheme – that’s 1,500 a day.
The new system came into effect on 6th April this year. Landlords and agents now have to sign up to one of three Government-backed schemes when they take a deposit. The idea is to prevent rogue landlords retaining a tenant’s deposit unfairly.
Communities Minister Baroness Andrews said: "It's particularly pleasing to see strong support for the schemes from landlords and agents, as it highlights the growing recognition that the initiative will also benefit landlords by bringing about a fair and sustainable rental sector. We're confident that take up will continue to rise."
However, the Government’s view is in contrast to that put forward by the Association of Residential Letting Agents which said recently that thousands of landlords were still unaware of the scheme and so risked facing substantial fines if they didn’t take the necessary steps to protect a tenant’s deposit.
It urged those who hadn’t yet familiarised themselves with the new system to do so as soon as possible to avoid financial penalties in future.
Smoking Stones told to stub it out
There’s no escape from the new smoking legislation – not even for ageing rock rebels like the Rolling Stones.
Band members Keith Richards and Ronnie Wood were seen puffing on cigarettes during a concert at Greenwich before being told to stop by anxious officials. They both complied immediately.
The prompt action by the concert organisers seems to have been mirrored throughout the rest of the country. Data published by the Department of Health shows that 97% of premises inspected in the first two weeks of July after the ban was introduced were smoke free.
During those first few weeks there were more than 88,000 inspections, indicating just how seriously the ban is being taken. Among the business targeted were 1,090 hotels, 6,783 restaurants and 9,568 licensed premises.
Any firm that hasn’t yet implemented a no smoking policy should do so as soon as possible. Failure to comply could lead to fines of up to £2,500.
Husband gets divorce payment reduced
A man has been allowed to reduce the amount he agreed to pay his former wife even though the original divorce settlement was part of a court order.
The couple had been equal shareholders in a computer software business. When they separated in 2001, the business was sold to a large conglomerate. The husband was to remain with the business on a two-year contract earning £200,000 a year. He was also entitled to receive further payment in three lump sums.
The divorce settlement ordered by the court stipulated that he should pay a share of these lump sums to his former wife. He did pay her the first two amounts but then he resigned from the business because he found his new working conditions unacceptable.
This meant he did not receive his third lump sum and so wasn’t in a position to provide his former wife with her share which amounted to £200,000.
The initial court order said that the husband’s liability to pay the lump sums to his wife depended on him receiving the money in the first place from his firm. If he didn’t receive the money then his liability would be rateably reduced.
The wife argued that this should not apply because he had chosen to leave the firm and so had lost the money through his own choice rather than for reasons beyond his control. She took the matter back to court but the ruling went against her.
The judge ruled that the original order had been clearly worded and if the wife had wanted to include a provision for what should happen if her husband chose to resign then she should have done so at the time.
The husband had resigned despite the financial consequences to both of them, not just her.
However the order had provided that the husband’s liability should be rateably reduced so that there should be overall parity between them in the division of their assets. Therefore, he was ordered to pay a reduced sum of £81,000 rather than the expected £200,000.
Courts can order that children be told their father’s identity
A court order that two children should be told the identity of their natural father has been upheld on appeal.
The man made an application for a declaration of parentage after a DNA test showed that he was the father of eight-year-old twins. However, the twins regarded a man who had been living with their mother as their father.
The natural father obtained a court order saying the children should be told about him. The mother appealed saying the matter did not come within the jurisdiction of the court and that a decision about whether or not to inform the children should be made by the parents.
However, the Court of Appeal ruled that the judge had been justified in making the order and so the children should be informed.
Cohabiting couples could get more protection
The Law Commission has put forward a set of proposals that would provide cohabiting couples with more legal protection.
There are more than two million unmarried couples living together in the United Kingdom. Many believe that they have a common law marriage which provides them with the same rights as they would have if they were formally married. This is not the case.
Cohabiting couples in fact have very few rights under current law and this often leads to hardship when they split up. The Law Commission has tried to improve the rights of these couples without doing anything to undermine marriage.
The result is a set of proposals which try to remove the worst injustices. Couples who split up would be able to go to court if necessary to obtain a financial settlement that took into account how much they had put into the relationship. To qualify for these limited new rights they would have to have children together or live together for a minimum period. It’s recommended that this should be between two and five
years.
The person making a claim would have to prove that they had made a “qualifying contribution” and they would have to show that this put them at a long term disadvantage or gave their former partner a financial benefit. The Commission gives examples of a couple who would be unable to make a claim and one who would.
Example One: A couple live together for just under two years in a flat they rent from a private landlord. They have no children, they both work full time and they keep their finances separate. They split all the bills 50-50.
It’s unlikely that this couple would be affected by the proposals. For one reason, they may not have lived together long enough to qualify but in any case, neither has benefited or been put at a disadvantage as their relationship has been financially neutral.
Example Two: A couple had been living together for three years in the man’s house when they decided to start a family. They decide that the woman should stay at home to look after the baby. Two years later they decide to separate.
In this case the woman would be able to make a claim because she had lost out on earnings, possible pension rights and career prospects. Her partner would also have to help pay for childcare if she needed to return to work and share the costs of bringing up the child.
Please contact us for details about the rights of cohabiting couples.
Three out of four unprepared for mental incapacity
Research by the insurance company Standard Life shows that three out of four people have made no arrangements to enable someone to manage their financial affairs should failing mental health make it impossible for them to do so themselves.
This is in spite of the fact that it can be difficult and time-consuming to unfreeze the assets of a family member who suddenly becomes mentally incapacitated.
It’s hoped that a new system of granting someone power of attorney over your affairs will make more people come forward to prepare for the possibility of future ill-health. The Mental Capacity Act, effective from 1st October, brings with it a raft of new measures which radically change the system.
The old Enduring Power of Attorney, which has been around for the last 20 years, is being replaced by the new Lasting Power of Attorney. EPAs concentrate on such things as financial matters, property and business affairs. They are are drawn up by many people at the same time as writing a will.
The new LPAs are much more extensive and come in two forms. The property and finance LPA is similar to the old EPAs in that it allows you to appoint attorneys to look after financial matters. The personal welfare LPA breaks new ground by allowing you to appoint attorneys who can make decisions about your future health care. You can even stipulate whether or not you should be given life-saving treatment.
Your instructions will be honoured as long as they are in writing, signed and witnessed. If the decision applies to the refusal of life-saving treatment then there must also be a statement that it stands even if your life is at risk. You can choose both LPAs or just select the one that suits you most. Lasting powers of attorney have to be registered at the Office of the Public Guardian. The new system will be more wide-ranging and offer people more choices.
Please contact us if you would like more information.
HIPs move on to the second stage
Home Information Packs may have been changed, delayed, watered down and weakened over the last 12 months but despite all the controversy, they have now come into force.
The new system is being introduced in stages because there still aren’t enough trained energy assessors available to make the system work across the whole housing market. The first phase began on 1st August when anyone selling a house with four or more bedrooms was obliged to provide a HIP for potential buyers.
Now the Government has taken the next step by extending the scheme to include three bedroom properties from 10th September. The packs must contain an index of contents, an Energy Performance Certificate (EPC), a sale statement, standard searches by local authorities or evidence that a search has been requested, evidence of title and information on leasehold or commonhold sales.
The Energy Performance Certificates are considered the most important new element of HIPs. The certificates provide houses with an energy rating - similar to the ratings fridges get – and enable buyers to assess the energy running costs of the property. Until the end of the year, people will be allowed to market their properties as soon as they have commissioned a pack rather than wait until it is ready.
The implementation of HIPs will be re-assessed towards the end of the year and it is intended that they will be phased in for smaller properties as more energy assessors become available.
After all the changes, HIPs have arrived more with a whimper than the expected big bang. This has led some people to speculate as to whether they will survive and whether some sellers may decide to ignore the law and not bother to provide the packs. However, the Department for Communities and Local Government has stressed that anyone selling a house with three or more bedrooms risks a penalty notice of £200 if they don’t provide a pack. These penalties can be repeated as many times as the offence is repeated.
Please contact us if you would like more information about HIPs.
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