What’s in a Name?

Sticks and stones may break your bones, but names will never harm you? Think again. Something you intended to be a joke or good-natured banter everyone at work would find funny might just create an intimidating, hostile, degrading, humiliating or offensive environment for one individual and therefore has the potential to amount to discrimination or harassment.

Take for example Mr Nolan’s work colleagues who nicknamed him Yoda and played a number of age-related pranks including changing his number plate for “OAB” to “OAP”. That, found the Employment Tribunal, demonstrated an age bias against an older worker and was age discrimination. Or the manager who called a young worker “teenager” and “kid” and the use of these words was found by another Employment Tribunal to amount to harassment. That cost the employer £2000 in compensation for injury to feelings.

What will turn a comment – either made in jest or the heat of the moment – from just a comment into harassment is context.  It must be unwanted, cause offence and relate to a protected characteristic (age, disability, sex, race etc.). So, despite there existing a bad relationship between two work colleagues where one would call the other a b***** and threaten to “rip his head off” it is still harassment for the other to retaliate by calling him, a wheelchair user, “Ironside”. Non-discriminatory offensive behaviour will rarely be a barrier to claiming harassment. This spat between feuding employees cost the employer £6,000 in compensation for injury to feelings.

However, where one individual, of mixed race, from a group of work colleagues, who all enjoyed an afternoon of exchanging jovial insults with each other (and had in fact been inviting insults) then complains that when he called one colleague a “fat b****** like Johnny Vegas” he retaliated by calling him “the monkey” from the T.V advert for PG Tips, he was not the victim of race discrimination or harassment.

Perhaps you recognise this type of banter and high jinks in your workplace and had thought nothing of it. But you can see just how easy it is for this to cross the line into unlawful conduct, especially when you have no control over whether or not it causes offence. And if you have not taken all reasonable steps to prevent the discrimination in question you will be liable for the acts of your employees when a claim is made.

On the other hand, if your workplace is genuinely one of the few where discriminatory nicknames are never used, don’t yet breathe a sigh of relief. In some circumstances, where name calling or pranks are going on, and they are persistent or targeted, it may amount to a breach of the implied duty of trust and confidence and could give rise to a constructive dismissal claim.

The answer is to take all reasonable steps to prevent discrimination, harassment and bullying. The name of the game is to have a Dignity at Work Policy, educate and train your managers and staff on its contents and enforce it. No-one wants to be a kill joy but when you’re facing uncapped compensatory awards at the Employment Tribunal lead by example and be aware of the potential for office banter to over step the mark.

Donna Reynolds is an experienced Employment Lawyer and expert HR Advisor helping SMEs throughout Fife, Edinburgh and Scotland.

April Fool? New outcome for Dilapidations: No laughing matter for Landlords!

In light of two recent Scottish cases, you could say that the joke is on landlords when it comes to dilapidations[1]. This could be good news for tenants as it gives them a better footing for negotiating, and landlords will have to be proactive so not to be caught out.

What are dilapidations?

Dilapidations are the repairs that are required during or at the end of the lease that the landlord requires the tenant to carry out, or that ultimately the landlord can carry out at the expense of the tenant. This can be a hefty responsibility for the tenant, especially in a long lease. When the lease comes to an end, it is common for there to be some dispute about the repairs due to different interpretations of the lease or to the extent of the disrepair of the premises.

After the property crash when landlords were desperate to attract tenants, they would often fall back on the money from the outgoing tenant and then give the new tenant a reduced rent while they did the premises up. The landlord would then keep the dilapidations money for themselves.

Fairer treatment for tenants?

It appears there is an emerging trend favours the tenants’ side of the fence and landlords can no longer get away with having their cake and eating it. The line of interpretation follows commercial common sense and suggests that tenants will only have to pay the dilapidation sums if the landlords can prove that they actually intend to carry out the repairs. Another tool (so long as the lease doesn’t say differently) tenants have, is the right to make the argument that an alternative measure of loss should be used to determine landlord’s true loss for breach of repairing obligations.

The moral of the story is, if you want to be clear about your position, make sure there are no grey areas, otherwise, the joke will be on you.

If you would like some advice about a new or existing lease, don’t hesitate to give our commercial property team a call!

Sophie Graham is a trainee solicitor in our commercial property department specialising in commercial leasing, property disputes and commercial conveyancing.

[1] Grove Investments Ltd v Cape Building Products Ltd [2014] CSIH 43, @SIPP (Pension Trustees) Ltd v Insight Travel Services Ltd [2014] CSOH 137.

Stranger than fiction?

It seems somehow appropriate to be writing this shortly after Terry Pratchett’s death was announced. If, like me, you are a fan of his writing, he will be sorely missed. If you have never heard of him, you’ll wonder what on earth I am talking about (and, yes, not for the first time). But what is the connection between those fantasy novels and business law, even as we approach April Fools Day?

I do appreciate that this may sound a bit tenuous – well, OK, more than a bit – but part of the job of lawyers and others advising businesses is to think of just those odd or unlikely circumstances that can and do crop up in real life. So, which of these are stranger than fiction?

  • The bank that holds the money – say for the business you have just sold – going bust.
  • A husband and wife who own a company 50/50 getting divorced
  • People who are facing bankruptcy and who have nothing to lose signing up to obligations than so rational (and solvent) person would agree to.

I could go on (and on) but my point here is that the unforeseen does happen – regularly. And thinking about, or anticipating, the unexpected is part of the professional adviser’s job and the experience that he or she should bring to the table.

So, when more and more obscure or unlikely possibilities are being discussed and you begin to think “that’ll never happen”, if you had sold that business before 2008 you would have been happy for that cash to be deposited in Northern Rock, wouldn’t you?

None of us can anticipate every possible eventuality nor eliminate every risk. Often, the attempt to do that can result in more and more time, effort and cost being spent on less and less likely events. But the thought process does need to be gone through, the risks assessed and an “informed decision” made about which need protected against – and which don’t.

Many years ago, a French colleague – a member of our Avrio network –  said that all legal work was about the control and management of legal risk. At the time I disagreed, but now I am not so sure (although, of course, won’t tell him when I next see him…).

Back to Terry Pratchett. If you haven’t read and of his books and if you are a Scot and have a sense of humour (I know – a high threshold) have a read of The Wee Free Men. Val McDermid loves it: rare praise indeed, particularly from a Raith Rovers supporter.

And finally to be serious for one minute, take time to think business deals through. Ask yourself

  • what might go wrong?
  • What are the known unknowns (because you can’t really know the unknown unknowns)?
  • And, can you mitigate the risk?

Get in touch to chat any of this through – even if you aren’t a Pratchett fan!

John Clarke is an exert lawyer assisting SMEs dealing with growth, acquisition, sales, franchising, and in difficulties throughout Fife, Edinburgh and Scotland.

Should an employer announce the suspension of an employee?

The BBC has released a statement saying that “Jeremy Clarkson has been suspended pending an investigation”. Can an employer announce the suspension of an employee to other members of staff or to the world at large, as in the case of Jeremy Clarkson?

Yes, but only if by doing so the employer does not breach the implied duty of trust and confidence.

Care should be taken to avoid any suggestion of guilt because not only could this breach the duty of trust and confidence, it may also raise questions about the perceived fairness of any subsequent disciplinary proceedings. It’s not uncommon for employees to argue that the outcome of a disciplinary hearing was predetermined and an ill-thought-out statement may just give him or her the ammunition they need to support their assertion.

Employers could instead consider telling colleagues that the employee in question is absent or on leave, or even agree the reason with him or her. This would be advisable where the allegation is particularly serious and one that would be difficult for the employee to bounce back from, including working with their colleagues again, if the allegation is not upheld.

Donna Reynolds is an experienced Employment Lawyer and HR Adviser helping SMEs throughout Fife, Edinburgh and Scotland.

Employment Law Basics: top 10 tips

Here are our top ten tips for avoiding costly and time-consuming workplace disputes and Employment Tribunal Claims.

  1. Issue written contracts of employment and tailor your staff handbook to your business. Keep both up to date.
  2. Ensure the contract gives you the right to deduct or withhold an employee’s wages.
  3. Keep up to date with new employment laws by regularly checking Acas’ website (www.acas.org.uk). For example, are you up to date on the new right to request flexible working for any reason, not just to care for a child?
  4. Always follow the Acas Code of Practice on Disciplinary and Grievance Procedures or any compensatory award made against you by the Employment Tribunal could be increased by 25%.
  5. Don’t try and dress up the real reason for dismissing someone as something else even if it makes life easier or avoid a difficult conversation. It’s only storing up future trouble.
  6. Never, ever sack someone on the spot.
  7. Keep detailed absence records and conduct return to work interviews after any period of absence. It will highlight any potential problems sooner.
  8. Have a social media policy and put clear guidelines in place as what you consider to be acceptable behaviour when using social media.
  9. Understand what discrimination means and how to avoid it.
  10. Don’t initiate a without prejudice discussion or protected conversation with any employee without first taking advice.

Donna Reynolds is Partner with CCW Business Lawyers and an Employment Law and HR Expert with over ten years’ experience of advising employers employing from 1 to over 300 employees

Employment Law Basics: disciplinary issues

The single biggest piece of advice for any employer who is considering taking disciplinary action against is an employee or need to deal with a grievance is to get themselves a copy of the Acas Code of Practice on Discipline and Grievance. And then read it and, most importantly, follow it.

The Acas Code is intended to help employers deal effectively with issues of alleged misconduct or poor performance in the workplace. It’s easy to read and it sets out in clear detail every step an employer should take if it wishes to ensure that any decision is takes is not found to be unfair by an Employment Tribunal on grounds of procedure.

Not all breaches of the Acas code will render a dismissal unfair. For example, a failure to send witness statement to the employee prior to the disciplinary hearing is a breach of the Acas code but it will not render a dismissal unfair if it made no difference in real terms. However, the Acas Code is not onerous  and could save employers a great deal of time of money in unnecessary Employment Tribunal claims.

Donna Reynolds is Partner with CCW Business Lawyers and an Employment Law and HR Expert with over ten years’ experience of advising employers employing from 1 to over 300 employees

Employment Law Basics: social media

Social media and its use has grown rapidly and has fundamentally changed the way many businesses operate. One of the biggest issues facing employers is confidentiality of customer contact lists and their ownership. LinkedIn for instance, creates a list of business contacts – to whom do they belong, is this information still confidential when made public in this way and what can an employer do to ensure it can access this information?  Employers can answer many of these questions for its employees with clear provisions in its contracts of employment, policies and post-employment restrictions; contacts remain company property,  information stored on such media must be returned and then deleted, passwords must be handed over and traditional  post-termination solicitation and dealing with clients and prospects clauses adopted for the risks posed by social media.

Donna Reynolds is Partner with CCW Business Lawyers and an Employment Law and HR Expert with over ten years’ experience of advising employers employing from 1 to over 300 employees

Employment Law Basics: The contract of employment

A contract of employment exists for every employee from the moment they accept their offer of employment. It can be written down or agreed verbally but either way its importance can’t be underestimated; it forms the basis of the employment relationship. Get it right from the outset and you can prevent future problems. Unfortunately, it’s only when things go wrong that an employer discovers how weak their contract actually is.

If you only do one thing make sure you give your employees the written statement of employment particulars they are entitled to. It is not, in itself, a contract of employment, but it is evidence of the contract’s main terms and it is better than having a verbal contract which only leaves you in the difficult position of trying to prove what the precise terms of employment are. Acas provide a good example of a written statement which you can find download at www.acas.org.uk. Make sure you issue it within 2 months of their start date.

Donna Reynolds is Partner with CCW Business Lawyers and an Employment Law and HR Expert with over ten years’ experience of advising employers employing from 1 to over 300 employees

A general rule or a rule for football clubs?

I never thought I would say this as a woman who (sorry) has very little interest in the sport, but thank goodness for football because it provides such rich pickings for employment lawyers. You may recall the Keys and Grey scandal involving allegations of sexual harassment at Sky Sports? Well, the  recent case of Williams v Leeds United [2015] EWHC 376 (QB) involves not only offensive sexual imagery and the spectre of sexual harassment,  it also raises an interesting question as to whether an employer can rely on information it has obtained after dismissing an employee to avoid paying notice pay,

Mr Williams had been made redundant and proceeded to pursue the club for wrongful dismissal, claiming the money he would have been entitled to during his notice period.  The law in this area is fairly simple on the face of it;  an employer doesn’t have to pay notice if an employee has breached his employment contract.

However, it just so happens that the club had been looking for an excuse to dismiss the director, without having to pay him notice, after he was made redundant and had instructed a firm to investigate the contents of his computer. It was discovered that Mr William had forwarded an email using a work account containing offensive pornographic images to email accounts outside of the club and to a junior female employee. This, asserted the Club, was a breach of contract.

It was held by the courts that it was immaterial that the Club was trying to avoid paying notice pay or that Mr Williams was not aware of the Club’s code of conduct. Someone in his position should have been well aware of the potential for loss of reputation for the club if the emails were made public and that the sending of such emails to a junior employee left the club open to claims of sexual harassment.

Employers looking to rely on this case should however treat it with caution.  The first point to note is that this was a case for wrongful dismissal in the High Court and as a result, Leeds United were able to rely on information that they obtained after dismissing Mr Williams.  If Mr Williams had claimed unfair dismissal in the Employment Tribunal his employers would not have been able to rely on the emails.  Another key element was the combination of football and sexism.  The potential for negative media exposure if the emails were to be made public, not to mention the costs (reputational and otherwise) associated with a sexual harassment claim, meant that the High Court looked more kindly on the employer in this instance than would perhaps be the case in other circumstances.

Donna Reynolds is an experienced Employment Lawyer and HR Advisor assisting SMEs throughout Fife, Edinburgh and Scotland.

Spring into action – Small Business, Enterprise and Employment Bill

The Government is out to do some overdue Spring cleaning with this Bill, with one stated, general aim being to increase transparency about who really owns companies. Though not law yet, the Bill is huge and it is on the way with broad cross-party consensus on many provisions. It affects many areas, so we will be drip feeding the impact in our newsletters and on our website.

Facilitate and rejuvenate receivables finance contracts? Invigorating invoice factoring?

In many ways, the most useful change under the Bill for hard-pressed and cash-strapped SMEs and very much the one to watch is the proposal in the Bill to allow the assignation of customer debts due to SMEs – even when the relevant customer contract prohibits such assignation without customer consent or at least intimation to customers. The effect could be enormous for those businesses who have shied away from assigning their customer debt book to their banks or invoice factors for fear of unsettling their customer base. In many ways this, at a stroke, could achieve what providing for statutory interest on the late payment of debts has failed to do in ongoing supplier-customer contracts and, if this proposal gets through, and it could yet be stymied or made useless by amendments which defeat its apparent benefits, it could have a massive effect on cashflows as there may no longer be a need to seek consent or even advise customers that such income streams have been assigned. As ever, though, the devil will be in the detail that emerges in any final enactment.

Are you a ‘spotless’ shadow director?

Though plenty of case law exists in relation to so-called shadow directors, the Bill now states that the general duties of directors expected by the Companies Act 2006 will apply to shadow directors. An exemption exists for advice given in a professional capacity, but those who run businesses though, or with regular advice and support from, family or friends should take care.

Time to clean out corporate directors?

The Bill proposes that all directors should be individuals, and the use of corporate directors (typically other limited companies) will be prohibited (with a few exceptions). So far, the Bill has set a provisional implementation date for the prohibition of October 2015. The exact exceptions to the rule are still being debated – watch this space. Companies will have 12 months from the provision coming into effect to appoint a natural director.

Nowhere to hide if you are a ‘person with significant control’ aka a PSC?

Companies will be required to obtain information about who owns (directly/indirectly) more than 25% of the shares or voting rights of the company; who has the ability to appoint the majority of the board; and who can exercise significant influence /control over a company. This information will then need to be kept in a public register (known as the PSC register) from January 2016. Criminal sanctions can be faced by the company and the PSC if there is a failure to comply with the new rules.

Emma Arcari is an experienced corporate and commercial solicitor with CCW Business Lawyers Limited  advising businesses on contract law, transactions and disputes across Edinburgh, Fife and Scotland.