THE CONTRACT

The starting point whether acting for the employee or the employer is the contractual obligations that exist. It would be surprising if any newly promoted employee secured a year’s notice. Under the Employment Rights Act 1996 notice periods are capped at a maximum of 12 weeks.

A probationary period is merely a creature of contractual comfort for employees and employers in most contracts (were the employee in new to the business) because until the statutory employment rights accrue (unfair dismissal for example) the probationary period is a management tool. Here as a newly promoted internal appointment a probationary period was not only a way to ensuring performance but of giving senior management an essential tool if things did not go well.

A probationary period would have ensured that George Entwisle was capable of stepping up to become a leader of an organisation. A probationary period would have given the BBC the option of terminating his contract on shortened notice period. We draft our contracts to include a 6 month probationary period so employers can have the management tools and d time to manage under performance.

The next thing we would seek from within the contract would be good or bad leaver provisions. George Entwisle is clearly a good man who was unfortunate to be promoted to the wrong role at the wrong time. In another era without crisis’s he may have lead the BBC wonderfully as a programme maker. However the settlement reached should have recognised the failures of his ill-fated regime – including the recent scandals engulfing the BBC.

From an employer’s perspective they had a strong position to negotiate him from post based on performance issues.

TRIBUNAL

After considering the contractual position the next issue we would consider whether acting for the employee or the employer would be the Employment Tribunal risks and compensation level. Here the salary each year is significant because it exceed the unfair dismissal compensation cap is £72,300.00 hence settling for £450,000 appears fool hardy. In the absence of discrimination the BBC’s negotiating position should have been robust.

Any other factors?

This is the vague and bespoke bit! The bit that we spend hours advising both employers and employees on. There are no hard and fast rules but in some cases its £0 and in others in tens of thousands of pounds.

• What feels right?
• Why does it feel right?
• Is it in the best interests to settle?
• Are we better off progressing to Tribunal or Court?

In the BBC’s case compassion for a Corporation man in the wrong place at the wrong time might have prevailed but it does not justify the money agreed in reaching settlement with Mr Entwisle – failure has been rewarded as the BBC has shown itself to be lurching from crisis to crisis.

WHAT IS A SETTLEMENT AGREEMENT?

For now it’s simply a compromise agreement which ends employment and in which the employee waives specified claims before the Tribunal and Court in return for certain benefits such as:

• A tax free lump sum ( up to £30,000 of compensation);
• A reference;
• Use of a company car for a period of time;
• Continued access to benefits (from discount cards to private health insurance).

WHAT DOES THE SITUATION HIGHLIGHT?

Good legal advice is essential for both parties. The deal should be right for both parties and should make sense for both otherwise the deal should not be done.

We negotiate compromise agreement and settlement agreement packages daily on a UK wide basis – mainly from the City, London, Birmingham and Manchester – but occasionally from all corner of the country. Please contact us if you need assistance on Settle Agreements.

Here at Bennett’s Legal we advise our clients frequently on the need to utilise garden leave clauses in their employee’s contracts. Many of our clients underestimate the value of a garden leave provision and the impact it can have on their business. Whilst garden leave clauses are commonly used in contracts for more senior employees, it can be used in less senior contracts where employees have access to sensitive information.

LET US TELL YOU WHAT IS GARDEN LEAVE

When an employee’s position terminates within a Company (because the employee wishes to leave or the employer has terminated the employment) it may in certain circumstances be advantageous for the Company to seek to impose a garden leave clause which will prevent the employee carrying out their duties and attending their place of work during their notice period.

WHY AN EMPLOYER USE A GARDEN LEAVE CLAUSE?

Whilst working in their role for a company, employees have access to a great deal of confidential information. This may take the form of financial information, systems and procedures, client, suppliers or employee details etc. It is safe to say the majority of Companies would not want this information to become available to a competitor who may rely on this to the detriment of the Company.

By placing the employee on garden leave for the duration of their notice, this allows time for the information to either go out of date or for the company to protect the information and in some circumstances amend their systems. It also prevents the employee from utilising any Company information for their benefit i.e. copying databases of client’s details.

TO ALLOW SUCCESSOR TO ESTABLISH POSITION:

When an employee leaves it is often the position that they will be replaced by a new employee or another member of staff. By utilising the garden leave provision, this allows the successor to take up the position earlier. Any clients will have time to adapt to the successor and the successor can get to grips with the working method of the role.

TO PREVENT THEM WORKING FOR A COMPETITOR:

Garden leave clauses can deter competitors seeking to poach employees as it may not be attractive to a competitor to have to wait for the employee to finish their notice period. It will mean that the employee may have been out of the work place for a long period of time and therefore their skills may have deteriorated or their knowledge of the market place may have diminished.

Additionally, clients become attached to dealing with one individual and often have built up a working relationship which takes time to develop. Where the employee is leaving to take up the same role in a new Company, clients may decide to follow the individual and this can be damaging to a company’s client base. Therefore whilst the employee is on garden leave, the client is prevented from communicating with the employee and is in a position where they have to deal with the successor. This allows time for the client to form a relationship with this person.

WHAT ARE THE DUTIES OF THE EMPLOYER?

It is important to remember however that if an employee is placed on garden leave, the contract between the parties still exists and the employer is still required to pay the employee’s salary, to perform all of the terms of the contract and to provide the employee with all benefits which they are entitled to under any Agreements. Therefore this may make the garden leave provision unattractive to many employers as you are effectively paying an employee to do nothing.

The benefits of protecting the Company by placing an employee on garden leave would need to be weighed against the financial impact of utilising the provision.

Advice for employers:

Here at Bennett’s Legal, we advise employers frequently on the impact of garden leave and draft the necessary clauses to allow employees to be placed on garden leave. We can offer advice and assistance on whether it is beneficial to use the garden leave provision for certain employees.

Advice for employees:

If you have been placed on garden leave and want to know the impact of this or; whether this is lawful based on the terms of your employment contract, please do not hesitate to contact our office.

On the 20^th July 2012 the Court dealt with the third company to be prosecuted under the Corporate Manslaughter and Corporate Homicide Act 2007.   Lion Steel Limited was convicted of Corporate Manslaughter and the guideline fine for a company is £500,000.  However, the Court made its largest fine to date, albeit still below the £500,000 stipulated in the guidance.  The fine imposed was £480,000.

CORPORATE MANSLAUGHTER & CORPORATE HOMICIDE ACT 2007

This third case was of particular interest as it is generally felt that the legislation and associated guidance has not yet been fully tested on a large scale company.  Lion Steel is the largest of the companies prosecuted to date.

By of comparison, Cotswold Geotechnical Holdings were the first company to be convicted under the legislation.  Due to their financial difficulties, Cotswold, with an annual turnover of only £300,000, were fined £385,000 payable over ten years.  Unfortunately, they went into liquidation shortly thereafter.

Even the conviction of JMW Farms Limited (County Armagh) but this did not provide any clarity on the approach to be adopted by the courts as they had a significantly higher annual turnover of £1,000,000 yet attracted a fine of £187,500 plus £13,000 in costs.  The courts in this case indicated they had applied 25% reduction to reflect the fact that the company pleaded guilty but it was not clear, and remains unclear, why the courts again are so far below guidance.

Lessons for Directors

1.         Investigation and prosecution is happening.   Your policies and procedures, therefore, need to reflect the risk.
2.         Health and safety, particularly surrounding possible death case, needs to be reviewed on a regular basis (how frequently depends upon the type of industry you are in).
3.         The financial impact upon businesses means that all directors and shareholders should be asking the question about safety issues on a regular basis.

How We Can Help?

We can provide training to shareholders and directors to help support companies bring in safeguards and avoid problems. Bennett’s Legal can take over and manage your response in the aftermath of an incident. We can provide advice for directors who are being interviewed under caution and represent the company or individual directors before the courts. To discuss any concerns you might have, please telephone us on 0844 472 2378

Law is a management tool but other tools are needed. We are delighted to have secured a guest blog from Alan Dring of the Mad Approach Ltd. Alan runs his own sales and marketing consultancy.

As many of you will know we run practical workshops and training courses of course but also publish occasional blogs from friends of the firm.

HOW COMMON IS COMMON SENSE?

A criticism often levied at the directors of football clubs is that they leave the common sense aspects of their personal business success at the door of the stadium when it comes to managing the commercial needs of the club.

Some may say they are living their dream and their heads are in the clouds and as a result they do not function as they would if it was their company’s board room.

My criticism would be not against the club directors but against a majority of SME directors that leave their common sense at the breakfast table before leaving for work.

Over time my experience has directed me to discuss with companies 4 aspects of their approach to their business plans (for plans read ACTIONS) that have proven to be constructive and significant when it comes to GROWTH.

The first is ATTITUDE. Honesty is at the heart of this requirement and if the business really wants to succeed and gain competitive advantage the owners/directors need to have a very positive attitude to their support needs and to the potential lack of TALENT amongst their current resource.

COMMON  SENSE  should then kick in and  the business should  pose  those simple, but often ignored , questions…1) How good is our communication(internal & external)  2) How good do we know our competitors . Using the football analogy it is not rocket science that you have to know the opposition better than they know themselves and as a result you come out on top. 3) Are our staff capable of doing what their job description demands? Is our training robust enough? There are more questions that will be provoked by the answers to the posed.

With the analysis that follows the answers we then determine what KNOWLEDGE we need to have, how we determine how to get it and in what manner it is delivered. This area brings into focus the culture of the businesses and this in itself will be vital in establishing the foundations on which the businesses growth plans are built.

So if we have the right attitude, apply common sense, and acquire the knowledge we need, we can then tick off the 4^th aspect, CONFIDENCE.

The successful football team thrives on confidence, industry is no different. Confidence has to manifest itself from tea person to MD and be so infectious that all new starters get a whiff of it from the day of their interview.

If any of my comments have been thought provoking and you are serious about avoiding relegation, or retaining your Premiership Title, do ring for a chat

Alan Dring, www.themadapproach.com

Mobile 07528201244

The case contains a useful guide for regulators and the professionals they regulate.

SDT THROWS OUT CASE OVER SRA ABUSE

The Solicitors Disciplinary Tribunal (SDT) has taken the highly unusual step of throwing out proceedings taken against a solicitor, finding that the actions of the Solicitors Regulation Authority (SRA) constituted an abuse of process.

It is very rare that a Tribunal will find a regulator has abused their position so we thought we would look at the lessons because they are based a theme of communication which is regularly an issue in similar matters.

Whilst this case is recently published – it actually relates to a hearing and decision made a year ago – and the Tribunal said the solicitor would not have found himself before the SDT had the SRA (as Regulator and Prosecuting authority) not “moved the goal posts.” At Bennett’s Legal we had a “moving the goal posts” case recently before the GMC (General Medical Council renamed this month the Medical Practitioners Tribunal Service). In our work regulators not understanding the issues from a practitioner’s perspective is a common issue.

Dennis Brown, a sole practitioner Solicitor based in Colchester, was investigated over an allegation that he asked for costs from an unrepresented opponent when he should not have done. Mr Brown  disputed the allegation.

In 2009, an SRA adjudicator found him guilty of breaching the Solicitors Code of Conduct and warned him as to his future conduct. The SRA’s adjudicator’s findings were appealed by him.

The matter was therefore placed before an adjudication panel, which decided to pursue further investigation work. As a result of the new investigation, Mr Brown found himself referred to the SDT on charges of seeking to take unfair advantage of an unrepresented opponent and failing to deal with the SRA in an open, prompt and co-operative way.

However the SDT found that this further investigation covered matters which had existed from the start of the adjudication process.  It also found that the SRA had not been sufficiently clear in explaining to Mr Brown the possible consequences of exercising his right to appeal. It was noted:

“It was obvious that, had he been aware of the possibility of his case being referred to the tribunal, he would have accepted the first adjudicator’s decision and the matter would have been closed,” according to the SDT.

The decision continued:

“Based on the unique facts of this particular case, it appeared to the tribunal that the way in which the SRA had moved the ‘goal posts’ leading to the referral to this tribunal had caused significant prejudice to the respondent in that it had misled him and resulted in unfairness to such an extent as to constitute an abuse of process.”

As a result, the SDT struck out the proceedings.

Abuse of process remains a limited remedy but the SDT is to be commended for navigating the facts in this issue and seeing the poor communication and approach as prejudicial.

An SRA spokeswoman said: “The tribunal’s views were expressly stated to be based on the unique facts of this particular case and its reasons are clearly set out in its judgement.”

However we suggest that the decision highlights, persuasive arguments when a regulator has not set our clearly the effects for professionals who contest allegations. Those facing adjudication in relation to their professional registration need to consider very carefully the advice they need and ensure that it meets their needs.

Our Experience:

Bennett’s Legal has experience of advising professionals in relation to the following:

• Solicitors Disciplinary Tribunal (SDT);
• Solicitors Regulation Authority (SRA) investigation and authorisation issues;
• General Medical Council (GMC) Investigations
• General medical Council (GMC) Interim Orders Panels
• General Medical Council (GMC) Fitness to Practise Panels;
• Nursing and Midwifery Council (NMC) Investigations;
• Nursing and Midwifery Council (NMC) Fitness to Practice Panels;
• Health Professions Council (HPC) Investigations;
• Health Professions Council (HPC) Fitness to Practice Hearings;
• ACCA Investigations and Hearings;
• IWECA Investigations and Hearings;
• Financial Service Authority (FSA) Investigations and Hearings

We prefer to advise from the investigation stage of matters but are happy to assist those whose hearing dates have already been set please call our Managing Director, Paul Bennett, on 0844 472 2378 to discuss your needs.

Please note the GMC was superseded by the Medical Practitioner Tribunal Service with effect from the 11^th June 2012. We are familiar with the procedures and process of the Medical Practitioner Tribunal Service which sits exclusively in Manchester. We are just over an hour away from the hearing centre.

WHEN IS A CONVICTION, NOT A CONVICTION, FOR EMPLOYMENT PURPOSES?

In this case the GMC were pursuing a doctor for failing to disclose a previous conviction when he applied for registration with the GMC.  The GMC’s case was however substantially flawed – they did not know the legislation in this area.

Those facing a Fitness to Practice Hearing may want to note that it is frequently the case that the GMC (and other regulators) regularly make very basic errors in the preparation of their cases.  The same can of course be true of any party bringing a case whether they a solicitor, barrister, Crown Prosecution Service or other prosecuting authority.  At the outset of the case there is a mass of information and sometimes very basic points can be overlooked – often due to human error.

ABSOLUTE DISCHARGE & CONDITIONAL DISCHARGES ARE NOT CONVICTIONS

A previous conviction which leads to the imposition of an absolute discharge will not be a conviction once the person has left the court room where they have received an absolute discharge.  For those working in the professions, and subject potentially to Fitness to Practice Hearings, the imposition of an absolute discharge is the ideal outcome in a criminal prosecution.

A conditional discharge will be a period of time whereby a person is not punished further by the court provided they do not re-offend within the time specified.  This period can be up to 3 years.

In our recent case before the GMC Fitness to Practice Panel the doctor had been convicted and conditionally discharged for a period of 12 months.  His registration was not applied for until 7 years later and therefore there was no obligation on him to declare the court proceedings as a conviction when applying for registration.

A conviction therefore for an offence which leads to an absolute discharge or a conditional discharge can have a complex outcome in terms of what needs to be disclosed to a regulator.

The phrasing of each regulator’s questions will be different.  The question asked will determine what, if anything needs to be disclosed to the regulator.

No doubt the GMC will learn from this basic error and will amend their own form and requirements.

In our recent case they amended the charge from conviction to a finding of guilt. In doing so they enabled their case to continue. However notwithstanding this the doctor was found not guilty of dishonestly failing to declare the matter following our submissions on both the law and the evidence.

If you would like expert representation before a Fitness to Practice Panel you should contact Paul Bennett, our Managing Director who heads the Fitness to Practice Panel Team, at Bennetts Legal Limited for advice.

Please note that we offer a fixed fee review of your prospects. Moving forward other fees would apply but you can get an understanding of your prospects before you commit to anything for a fixed fee.  We usually only operate on a private paying basis but in some cases we are happy to take on cases funded by insurers.  We do not offer pro bono, legal aid or no win no fee in respect of Fitness to Practice Panels.

Bennett’s Legal Limited gives Commercial and Employment law advice to directors, shareholders and business partners. We advise both employees and employers.  Paul is the founder and Managing Director of a small team of expert Solicitors.

SOLICITORS IN SHREWSBURY

The blog covers business and social life in Shrewsbury and explains what Solicitors do.
Social Life
The end of England’s Euro 2012 involvement came as predicted some weeks ago at the quarter final stage.  We remain a good but not world beating team. It’s hard to accept but a semi-final has not been achieved now for 16 years and counting.

The first England game I watched with the guys from MakeMyPhoneRing and Ryminster in the Bull in Butcher Row. The loss of England means a semi-final repeat will not now occur.

A camping trip needed to be cancelled to Church Stretton last weekend due to the rain over the last 10 days or so. I was delighted. The kids less so but it meant I go to see the football over the weekend which was a result!

A recent trip to see Coldplay was amazing. I am not a huge fan (my wife is) but can honestly say they were the best live band and I have ever seen – awesome.

Spinning twice a week remains very enjoyable and seeing younger people struggle at first is a welcome change since I started 3 months ago.

We are currently planning a boy’s from school night out in September with Simon, Steve and Rich. We missed out on cricket tickets this year so need to get our annual trip in somehow.
Working Life
A delayed start this week to the work with a sports day for one of my daughters. One first and one second place so it was fun to watch.

Once the week is underway it is rather full on:

• Advising a law firm of termination of an employee;
• Preparing Tribunal case for a law firm defending discrimination proceedings;
• Reviewing medical evidence in a Tribunal case;
• Advising a high earner on a termination package.

Discrimination and bulling remains a constant theme within employment law and the last few months have seen us talking to distressed employees and HR Directors (or their team) who need support.

Often our independent eye soon gets to agreed solution but discrimination hurts both individuals and businesses. Avoiding it is far better – we offer in house training for a nominal fee and I would encourage local businesses to take advantage of the training service to reduce their exposure to this risk – it’s quicker, cheaper and far better for business.

Other work this week includes repairing the damage of poor advice from a HR Consultancy (wrong in law and procedure) and supporting a client’s claim by conducting e-disclosure against a leading UK bank.

We are still seeing lots of compromise agreements and enhanced redundancy packages. If you are offered one of these then please call us immediately for a free initial discussion. We often negotiate enhancements to the package offered and ensure a reference is included in the compromise agreement offer meaning life moving on is much easier.

Employers thinking of offering packages for the certainty of avoiding Employment Tribunal claims should also get in touch as we can advise on the package to offer, structure for tax efficiently and all for a fixed fee.

I qualified with the London School of Mediation earlier this year as a commercial and civil mediator. I have also undertaken mediation advocacy so if you know anyone involved in a mediation who needs advise please refer them to me. I really enjoy the mediation side of things as the mediator training really enhances the client’s position and many lawyers find the process difficult.
Employment Law – Fixed Fee Clinic
We are getting lots of enquiries about employment rights and redundancy which is a sign of the times. We advise employers and employees so can give rounded legal advice.

Our Friday clinic enables  everyone to access expert employment law advice from Shrewsbury’s only boutique employment law firm.

Employment Law Clinic – Fridays 09:30-15:30 – £175 (inc VAT) for a one hour session, written advice and without further obligation.

Please book your slot to guarantee a specified time. We have multiple Solicitors available to advise.

Jimmy’s actions were lawful but available only because of the wealth available and the long term planning to be undertaken. In the attached article we comment on tax planning for individuals and small companies rather than the super wealthy.

Here at Bennett’s Legal we have a Chartered Tax Advisor on our team, one of the few law firms to do so and therefore can advise high earners and those wanting to mitigate tax within the legislation.

THE IMPORTANCE OF 3RD PARTY RIGHTS

In considering the application of the 1999 Act to a particular contract, it is important to:

• Identify relevant contracts. “Contract” is not defined by the 1999 Act and should be construed widely, subject to the exceptions.
• Identify potentially relevant third parties, whose rights you want to preserve or on whom you want to bestow an enforceable right. Common examples include:
  • Group companies or affiliates;
  • Employees, officers and agents;
  • Funders, banks or others with security interests;
  • Insurers; and
  • The ultimate client, for example, the original supplier in respect of a supply contract between a retailer and a customer, or the head franchisor in a franchise agreement between franchisee and sub-franchisee.
• Consider whether third parties should be given enforceable rights. It might be a question of:
  • Preserving an existing mechanism that circumvents the privity doctrine and confers a right on a third party;
  • Making the third party a contracting party in the first place; and
  • Making use of the 1999 Act, either to give a third party the right to enforce a positive obligation or to give a third party the benefit of an exclusion or limitation of liability.

In the case of an ultimate client, it may be more a question of considering whether, for example, in a contract between an original supplier and a retailer, the original supplier should require the retailer to include in its contract with its customers a right for the original supplier, as third party, to enforce certain terms.

• Where third parties are given enforceable rights, consider whether there should be any restrictions on their ability to enforce such rights:
  • Should there be provisions regulating the conduct of claims?
  • What about jurisdiction?
  • What about arbitration?
  • Should the third party have a right to assign the benefit of its rights?
  • What about restricting defences, set-offs and counterclaims?
• Consider whether it is appropriate to exclude the operation of the 1999 Act. There is a rebuttable presumption under the 1999 Act that a third party right will arise unless it is clear from the construction of the contract that the parties did not intend to confer such a benefit on the third party. Consider also whether it is appropriate to leave in place existing mechanisms for third parties to enforce rights or whether these should be excluded as well.
• Think where it will be appropriate to protect (in whole or in part) the contracting parties’ right, by agreement, to rescind or vary the contract without the consent of the third party. Remember such consent will be required where a third party right has been granted and has crystallised, unless express provision is made to the contrary.

HOW MANY OF US ARE PREPARED TO INVEST IN OUR OWN SURVIVAL PLANS?

So why are we reluctant to invest in survival plans? We need to be convinced that the investment will bring a return.

Most businesses are started in the belief that with their determination and TALENT their investment will pay dividends. That is not enough.

Businesses owners should ask themselves ‘’If I am expecting my customers/clients to invest in me should I not be investing in myself to ensure their trust is well placed. For a modest amount (often with subsidised support) a business can achieve a great deal if they secure the services of an experienced business growth consultant who has the skills and experience in those areas of business management that are lacking amongst their current resource. An external perspective can also add to a well structured action schedule, just by bringing a broader experience to the process. Choosing the right personality mix is also important

A few questions?

1. What does your business action plan look like?
2. Do you need help with it?(Be honest)
3. How do you target business objectives in a competitive environment?
4. Do you need help in this aspect of your business?
5. Do you recruit the right staff?
6. Do they have a natural flair for innovation and change?
7. Would help with recruiting save you money and increase your profits?
8. Are you honest and open minded enough when it comes to change and to inviting external influences to review your plans
9. DO YOU NEED HELP IN YOUR BUSINESS PLANNING?

A good business action list will focus your mind and should embrace

• Agreeing  your Business Objectives
• Marketing your Business Objectives
• Identifying Target Markets
• Developing Relationships
• Developing  a Partnership Business model
• Building a culture within the business and establishing the training infra structure.
• Budgets

Small businesses need short and specific objectives based on an understanding of the market and the products you are selling into it. Regular reference to the actions and amendments reflect a professional approach to business but just as important it will ensure you are keeping up with market developments and will put you in an advantageous position as many of the competition will fail to follow a similar route.

Most of us will be familiar with the criticism often levied at football club chairmen and their boards, in that they are accused of leaving their successful business heads back at the office and not till it is too late do they realise they have lost their Premier status. Just like Blackburn Bolton and Wolves 3 in 20 businesses in 2012 will cease to trade …a sobering thought

I have met so many honest hard working business owners in my 40 years in business but those that have applied a structured business planning approach to their business have been in the minority and I have to say the majority have got by on a wing and a prayer. Today’s climate does not accommodate crossed fingers.

Actions speak louder than words ….what are you DOING to survive ….and GROW?

Alan Dring: www.themadapproach.com do get in touch for a chat.

About Bennett’s Legal.