This Newsletter is provided free of charge to business clients of Reynolds Parry Jones.
Its purpose is to briefly inform readers of topical legal developments so that business owners and managers may be made aware of issues which may affect their businesses.
Topics are listed as succinct headings. A click on any which appear relevant or interesting will reveal a short summary description which should confirm or otherwise the relevance to your business.
For most items a further click will reveal a checklist which will provide further details and, if relevant, advise further appropriate actions for your business. Here you will also find the appropriate Reynolds Parry Jones contact if you need further explanation or action.
The government has stated that it intends to bring into force a number of changes to employment law in 2012. For example, from April 2012, the qualifying period for unfair dismissal claims will be increased from one to two years.
This checklist sets out the key changes businesses need to be aware of.
A recent Court of Appeal decision illustrates the dangers for businesses of relying on conversations and unsigned draft agreements.
The parties in this case were involved in discussions regarding events management at a venue. During the negotiations, a draft agreement was produced, which included a two-year fixed term and a clause allowing termination on three months' notice.
After one meeting, various drafts of the agreement passed between the parties that contained a three-month notice provision, but nothing was signed. The parties argued about whether the contract could be terminated during the two years. The court held that the parties had concluded an oral contract for a two-year period but it could be terminated early on three months' notice.
Both parties spent time and money litigating the matter. The case underlines the importance of ensuring that key contractual provisions are always documented, especially those as fundamental as a termination right. This checklist highlights the key issues a business should consider when negotiating contracts.
The government has published further details of a package of credit-easing measures aimed at small and medium-sized enterprises (SMEs). The package of measures relate to the National Loan Guarantee Scheme and the Business Finance Partnership and include:
Eligibility criteria.
Outline details of how funding would be made available.
When the measures are expected to be operational.
This checklist provides details of both schemes for your business clients.
Assured shorthold tenancy converted into assured tenancy in error
A decision in the Court of Appeal provides a warning to landlords that have multiple residential properties on their books. The court held that a letter sent in error by a landlord's employee constituted a notice, the effect of which was to convert the tenant's assured shorthold tenancy (AST) into an assured tenancy.
In this particular case, the tenant had been granted an AST for a probationary period of one year. The AST stated that if the tenant successfully completed the probationary period, the AST would be converted to an assured tenancy. The tenant breached the AST and the landlord sought possession of the property before the end of the probationary period.
However, the landlord's housing manager was unaware of the chain of events and sent out a standard letter, stating that the AST had been converted into an assured tenancy due to the tenant's successful completion of the probationary period.
Landlords should ensure they have effective procedures in place to enable them to communicate with their tenants and avoid similar errors. This Information sheet highlights the details of the case and the major differences between an assured tenancy and an AST.
Often, the most effective way of realising value from the assets of a company in administration is to sell its business as a going concern. The High Court has recently held that a clause in a sale contract that provided for any liabilities of the seller or the administrator to rank as an unsecured claim against the seller (rather than, for example, as an expense of the administration) was valid and effective. It is the first time that the court has considered the effectiveness of such a clause (which is a common feature of administration sale contracts).
The effectiveness of the clause means that a buyer will typically have limited recourse should the administrator or seller breach their obligations under a sale contract. This underlines the need for thorough due diligence and for the buyer to take responsibility for as much of the process of perfecting the sale as possible.
This checklist sets out the key employment issues a buyer should consider before buying a business that is in administration.
Selecting the right reason when dismissing an employee
A case in the Employment Appeal Tribunal (EAT) highlights the importance for employers of carefully considering whether an employee's failure at work is misconduct or a lack of capability matter, before taking any formal action against them that could lead to their dismissal. The EAT held that an employment tribunal was entitled to find that an employer had fairly dismissed for conduct, despite the fact that it had pleaded capability as the reason for dismissal in its ET3 at the hearing.
In this case, the change in the reason for dismissal caused no prejudice to the employee and the tribunal was therefore entitled to find that the dismissal was fair. However, the employer was fortunate in this case. If the tribunal had found that the reason for the dismissal was capability and the employer had relied on misconduct, it is likely the tribunal would have found the dismissal to be unfair, as no capability procedure had been followed.
This checklist outlines the steps a business will need to take if they are considering dismissing an employee.
The information provided in this email is intended for general information and guidance purposes only and is not intended to constitute legal or professional advice. If you are concerned about the issues raised in this note and how it might affect you or your business you should contact us for specific advice on the details provided above. The information is based on the law and other circumstances in force at the date on which this email was sent. There may have been changes in the law since the date of this email. This email not may not have been updated to reflect such changes.
Reynolds Parry Jones Solicitors, 10 Easton Street, High Wycombe, Bucks HP11 1NP, Telephone: 01494 525941 Fax: 01494 530701 Internet: http://www.rpj.uk.comPartners: GM King, RR Hill, JR Scrace, RC McCulloch, MW Marshall, DM Maunder, CW Selby
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