June 2021 - MLP Law

Reminder Warning on Break Clauses


Following on from our series of observations on commercial property matters as the country moves further out of lockdown, tenants will already be thinking of the future and as to whether or not the current property “is fit for purpose”.  If property changes are needed and the tenant is lucky enough to have a lease with a break clause, then here are some reminders as to considerations affecting the effectiveness of the break clause.  These considerations will also apply where tenants are entering into new leases or renewing leases of which a break clause is part of the agreed terms.

We are finding that some clients are already in discussions with their landlords and agreeing terms.  We then see heads of terms in which the conditionality to break clauses need revision, as “traps have been sprung”. 

What to look for:
•           All rents – the conditionality that all rents have to have been paid by the break clause is adverse for a tenant.  Annual rent is defined.  You know when it is to be paid, and can police that.  Other sums due under the lease that may be defined as “rents” are perhaps not known.  Insurance rent should be known, although that will be dependent on being notified by the landlord.   Service charge payable on a quarterly basis will also be known and should be paid.  Other sums, such as ad-hoc service charge, or even interest payments on sums that may be late, are not necessarily known. 
–          There is no obligation on the landlord to remind the tenant of any sums potentially due under the lease and interest payments which have not been notified still remain due. 

•           Quarterly/monthly annual rent payments – the case of Marks & Spencer plc –v- BNP Paribas Securities Trust Company (Jersey) Ltd & Another (2014) illustrates when internal accounting practices may breach lease terms.  Once a break clause notice has been served tenants sometimes apportion the annual rent payable for the period from a particular rent payment  date to the break date.  Unless the timing is such that a full rent period (e.g. a quarter) expires on a  Break Date ( the date when the lease ends after a validly exercised Break Notice) apportioning the rent to be paid rather than paying the full rent due , is dangerous. .More often a break date would be within a particular rent period.  The apportionment of the annual rent payable on the rent payment  date immediately preceding a break date would mean the tenant has failed to satisfy the conditionality regarding payment of annual rents due.   The break clause would not have been validly exercised.
–          A full period’s rent should be paid to a landlord in accordance with the lease terms.
 –          A well-drafted break clause should provide that the landlord reimburses the tenant for any rents paid by the tenant to the landlord for the period post the break date. 

•           “To comply with all tenant’s covenants” – it is still surprising to see the conditionality that the tenant has to have had complied with all its obligations under the lease.  There is most likely something under the lease that the tenant has failed to do.  It could be decorating with two coats of paint rather than three, as an example.  The point on interest above is another example.  A tenant’s accounting department may not realise that the landlord has received the rent a day or so later than required. Due to the timing, interest may be due.
 
Unless a landlord is in a particularly dominant position in negotiations and can dictate this conditionality, the tenant should be aware that its effect could be to make the break clause exercisable and thus potentially worthless.

There are other considerations to be borne in mind, which we are happy to discuss further should any negotiations be ongoing. 

If you have any questions or queries in relation to this blog, please do get in touch – by telephone on 0161 926 9969 or by email to Johnl@mlplaw.co.uk

Dispute over George Michael’s Estate from former partner

It has been more than five years since George Michael’s death on Christmas Day 2016, yet the disputes regarding his estate are only just reaching an agreement.

Despite having left a Will leaving his estate being split between various family members and friends, his estate was contested by his former partners, Kenny Goss and Fadi Fawaz neither of whom were provided for under the terms of the late singer’s Will.

Fadi Fawaz issued a claim on the basis of maintenance to support the lifestyle which he became accustomed during the couple’s seven-year relationship. Previously reported, he had asked to remain in the £5 million property where George had allowed him to live.

The Inheritance (Provision for Family and Dependants) Act 1975 is designed to protect people who ought to have been provided for under a Will but for some reason, were not. Those individuals are entitled to make a claim against the estate for reasonable financial provision to be made. A category of persons eligible for making a claim are spouses or partners who had been living with the deceased in a loving relationship for two years prior to their death.

Fadi Fawaz were reportedly in a relationship for five years prior to George Michael’s death, so it is reasonable to believe that he was capable of bringing a claim against the estate if he could demonstrate this and that he was financially maintained by George prior to his death.

Meanwhile, Kenny Goss persevered in attempting to claim from the late singer’s estate. Following the bitter court battle the trustees of the estate agreed to an undisclosed settlement to Kenny.

Although the estate was left to family and friends, Kenny Goss claimed that he had been promised monthly maintenance to support him following their split in 2011. Kenny sought the sum of £15,000 per month, for life. Kenny argued that he was financially dependent on George during their relationship and he had given up his own career to focus on his relationship with George. Crucial to his claim, he stated that he had remained financially reliant on George even after they split and until George’s death in 2016.

As previously mentioned, the 1975 Act allows certain categories of persons to bring a claim against a deceased’s estate. In this instance, Kenny would need to demonstrate that he was financially dependent on the deceased prior to his death.  Kenny also claimed that when George prepared his Will in 2013, there were questions surrounding his mental capacity.

Kenny based his lawsuit on two common reasons for making a successful claim for inheritance. As he was capable of demonstrating his financial dependency on the deceased he was able to reach an undisclosed settlement with the estate trustees.

The importance of a properly prepared Will offering you all the advice and guidance you need is vital in complex circumstances. Seeking advice from a specialist can avoid the need for lengthy and costly legal proceedings following the death of a loved one.  

MLP Law are advocates at ensuring our clients’ needs are provided for, including preparing them for events during lifetime as in death, to ensure peace of mind. At MLP Law our team of experts are here to talk you through the process, guaranteeing a service which is tailored to your individual needs.

How can MLP Law help me?

If you’re thinking about making or updating your will or require assistance with estate planning needs, please get in touch with our Wills, Trust and Probate solicitors. If you have any particular questions regarding dealing with claims for family and dependents are specialist solicitors can offer advice and guidance.

Our offices are open for covid-19 safe appointments, alternatively we can discuss your instructions via telephone, video call or email.

Contact Details for Wills, Trusts and Probate Team: 0161 9269969 or WTP@mlplaw.co.uk

Management Buyout Series

Part 1: The Pros and Cons

What is a Management Buyout?

A management buyout (MBO) is a transaction where the core management team of a company work together to buy a company, or part of it.

Advantages of an MBO

There should be a limited due diligence exercise as the management team already know the business

The sale process can often be quicker and easier than a third party sale

May be easier to agree a price for the business as the seller knows who they are negotiating with and the managers know the business

There is decreased risk of confidential or sensitive information passing to a third party

Warranties and indemnities given by the seller in the sale agreement are likely to be limited compared to a third party sale

Good option for sellers who have no succession plans or for businesses that are too small to attract a trade buyer

There is likely to be less disruption to the company as the business will effectively continue as usual with the same management team

There is generally better performance and commitment from members of an MBO team acquiring the business

Disadvantages of an MBO

Seller may get a lower valuation for the business than could be achieved through a trade sale

It is likely that the management team may struggle to raise sufficient finance between them

The management team will need to raise external finance through bank, equity investment or other means and often a combination of these

External funding will put financial pressure on the business

An equity team will want some control over what can/cannot be done without their consent and the team needs to be aware of handing over too much control to an investor

The team needs a good mix of experience at management level for the team to operate well as business owners

The team needs to be able to work together and agree how decisions will be reached, if there will be a leader (Managing Director) and what happens if someone wants to leave, etc.  Many of these issues should be dealt with in a shareholders’ agreement

There is potential for conflicts of interest if the managers become too concerned with their own investment and their role as shareholder rather than their role as employee and what is un the best interests of the company

If you have any questions on any of the above, please get in touch with a member of the Corporate team by emailing corporate@mlplaw.co.uk or calling 0161 926 9969.

Data Protection In a Post Lockdown Workplace: Are You Prepared?

As we contemplate a return to the office, we have noticed that a number of clients have not properly aligned their key policies. For example, their Return to Work Policy may provide that temperature checks may be taken to test for Covid-19 symptoms. However, we often find that clients fail to update their Data Protection Policy too, to take into account the increased use of sensitive personal data.

MLP can help you align your policies with each other to avoid any conflicts or non-compliance.

For the past year, remote working has become the norm in an effort to halt the spread of Covid-19. Now that the vaccine roll out is well underway, and cases are dropping significantly, a return to life as we knew it is looking more and more promising. To this effect, many employees will no doubt welcome an increased return to the office on a more regular basis.

Despite the vaccine rollout however, the fight against Covid is far from over.

It is still too early to ascertain just how effective the vaccine actually is. For instance, even though someone gets the vaccine, there is still a chance that they could catch Covid, have no symptoms, and pass it on to someone else.

As an employer, you will be required to implement measures to halt any future outbreaks of Covid among your employees, at least for the time being. This may involve ongoing testing – such as lateral flow tests, temperature checks, and employee declaration forms.

Needless to say, ongoing monitoring such as this brings with it a range of privacy issues, which must be considered.

See below for a few FAQs relating to employee data and your responsibilities.

Please also see our blog by our Employment Team for further information:  https://www.mlplaw.co.uk/coronavirus-and-the-gdpr-2/?sf_paged=2&_sft_category=employment-and-hr

1.If I carry out workplace testing, do I need to consider data protection laws?

Yes. By undertaking testing, you will be collecting and processing data relating to your employees’ health. Under the GDPR, this is considered to be sensitive personal data, which requires additional safeguards. For example, you should implement security measures to ensure that such information cannot be made available to unauthorised individuals.

At the very least, all data must be handled lawfully, fairly, and transparently. We recommend providing any employees who are tested with a privacy statement setting out how their data will be used and how it will be protected. If you are planning to undertake workplace testing, we recommend you update your privacy policy accordingly; please let us know if you would like assistance with this.

You may also want to consider undertaking a Data Protection Impact Assessment, particularly if you have never processed sensitive personal data such as health data before. Again, we can assist with this and advise on the additional steps which you can take to ensure this data is processed in accordance with the GDPR.

2. Am I allowed to ask my employees if they have symptoms?

Yes. The Information Commissioners Office (ICO) has stated that you may ask your employees about symptoms if you have a good reason to do so. However, you should bear in mind the ‘data minimisation’ principle; only collect the minimum amount of information you actually need. Again, consider setting this out clearly in your privacy policies.

3. Can I ask my employees if they have Covid symptoms?

Yes. Under the ICO’s guidance, given the current circumstances, it would be reasonable to ask your employees to let you know if they have symptoms. On a wider note, you should consider the regulatory guidance as issued by the government in relation to your particular sector when deciding whether to ask your employees if they have symptoms. Again, from a data protection point of view, you still need to bear in mind the data minimisation principle – i.e. only collect the minimum amount of data that is needed. For example, only ask your employees to disclose if they have symptoms of Covid, rather than about their health in general.

Conclusion


As it is likely that many of us will be making a more frequent return to the office over the next couple of weeks and months, we recommend that you consider how you will ensure the ongoing protection of your employees. If you are required to monitor your employees through health checks or declaration forms, we strongly advise you update your data protection policies and procedures to ensure full compliance with the GDPR.

How can we help?

If you think you may need assistance with updating your data protection policies, or if you require advice on the nature of data you should (or should not be) collecting from your employees, please contact our Commercial and IP team on 0161 926 9969 or commercial@mlplaw.co.uk  to receive expert legal advice for your business.

Recruitment in the New Normal

Welcome to our series of blogs, addressing post-lockdown issues from a legal perspective. This week we hear from our Employment law experts discussing recruitment in the new normal.

Given the cautious air of optimism for many businesses as lockdown continues to ease, thoughts are turning to growth and change, with a focus on recruitment.  Not only do some organisations want to take this opportunity to expand, others simply want to reinstate the status quo, having seen staff levels plummet over recent months as employees have left to work elsewhere during lockdown (to avoid being furloughed or long-term uncertainty) or have been made redundant.

Furthermore, with increasing numbers of employers and employees embracing remote working, the pool of potential candidates has widened, with candidates happy to look for jobs beyond the boundaries of their normal commute.  Therefore, for certain roles, candidates are becoming increasingly ‘location-agnostic’, giving greater choice to employers who are recruiting.

Whilst most employers have efficient recruitment processes in place, many are concerned about whether such procedures are still fit for purpose, for recruitment in the ‘new normal’, psot-lockdown landscape.  With that in mind, the employment law team at MLP have set out some guidance, to help employers avoid pitfalls in their hiring process over the coming months.

Recruiting after making staff redundant during lockdown

Employers can recruit to fill vacancies that have arisen as the result of making previous staff redundant. Provided that your business can point to commercial factors for the change in approach (such as improved conditions in the market or new business from clients) then previous redundancies are not a bar to hiring new staff.  Clearly, the shorter the period between making redundancies and recruiting to fill those same or similar posts, the more difficult it will be to justify the original redundancies, leaving your business open to claims of unfair dismissal.  A claim for unfair dismissal can only be brought 3 months (less a day) from the date of termination.

Be clear about your expectations when advertising

It’s sensible to clearly set out as much detail as possible about the role, early in the recruitment process – if remote working is a possibility, make it clear in the job advert.  This avoids awkward (and potentially discriminatory) conversations later in the process, on issues like working patterns and homeworking.  A blanket refusal to consider remote or homeworking may disproportionately affect female candidates, who are more likely to have childcare responsibilities, potentially making such a decision indirectly discriminatory.  It can therefore be useful to consider flexible working at the outset.

Be creative about incentives

For many, daily working life changed dramatically during lockdown and this has triggered an appetite for different ways of working going forward.  If remote or homeworking is something that may apply to the new role there are various innovative ways to financially reward employees and encourage them to become part of your business.  You could, for instance, consider stipends for employees who want to work in co-office spaces, instead of entirely from home, or offer contributions towards home office furniture or IT equipment.  This can encourage loyalty from the outset, as the new employee feels that you have invested in them.  If, however, the role requires the more traditional patterns of working, you can emphasise the benefits of a collegiate atmosphere and support within the workplace.  The key is to ensure that, whatever creative ways you choose to financially reward employees, the terms are reflected in the contract of employment, to avoid any dispute at a later stage.

Asking a candidate if they have had the Covid-19 vaccine

In general terms, questions about any aspect of a candidate’s health during an interview should be avoided until after the individual has been offered the job.  If, therefore, you consider that a vaccine is necessary for the relevant role, it can be a condition of any subsequent job offer.  If, however, you can’t demonstrate that asking staff to be vaccinated is a reasonable management instruction, you cannot insist that either existing or new staff provide you with this information.

Job offers conditional on having the vaccine

Making any offer of a position conditional on having the vaccine is also likely to fall foul of discrimination laws in the majority of situations.  Instead, support and encouragement by the employer – in the same way as for existing staff – is preferable.  There are circumstances, however, where an employer may be able to justify this approach, particularly if the role will involve working with the clinically vulnerable.  The Government is currently considering making the vaccination compulsory for care home staff but until a clear decision is reached, employers wanting to require employees to have the vaccine as a condition of employment should exercise caution.

Data privacy in recruitment

Employers should also be mindful of data privacy and security concerns if virtually interviewing and inducting candidates, but they must also consider their own risks.  For instance, how can a candidate prove they are who they say they are?  Organisations must verify a candidate’s identity to make sure they’re always dealing with the same person — not just during the recruitment process, but also when that individual attends training sessions and starts their first day of work.

Offering new starts less generous terms than those enjoyed by existing staff in the same role

Employers can offer whatever package they feel is sufficiently competitive, to attract high calibre candidates.  The key is ensuring that you comply with equal pay legislation requirements.

Hiring someone from outside of the UK

The way employers hire someone from outside the UK changed on 1 January 2021, when the Brexit transition period ended.  There is now a points-based immigration system. This means that:

  • You’ll need a sponsor licence to hire most employees and workers from outside the UK.
  • Anyone you recruit from outside the UK will need to meet certain requirements.
  • You should plan ahead if you want to offer a job to someone from outside the UK as it may take longer than it used to.

You can also remind and encourage existing employees who are EU, EEA or Swiss citizens, to apply to the EU Settlement Scheme by 30 June 2021. Once they have applied, and are in receipt of settled or pre-settled status, they will have the right to continue to live and work in the UK.

If you have any questions about the above please contact the MLP Law Employment team at employment@mlplaw.co.uk or 0161 926 9969. Please also keep an eye out on our Twitter feed @HRHeroUK and for our regular blogs on all things Employment Law and HR.

What was in Princess Diana’s Will?

Princess Diana died on 31st August 1997 in a tragic car accident in Paris, however, there are thousands of conspiracy theories that dispute this and argue it wasn’t an accident. We will resist the urge to delve into some of those conspiracy theories, and instead take a look at Princess Diana’s Will.

Diana’s estate was valued by The High Court of Justice at £21,711,485.00, however, Diana’s estate was liable for Inheritance Tax and the ultimate value of the estate once Inheritance Tax was paid was around £12-13 million.

Executors

In a Will you appoint people you trust, usually up to 4 people, to act as your executors and administer your estate upon your death. The executors will apply for a Grant of Probate (if necessary), collect in the estate assets, pay any debts and then distribute the estate to the beneficiaries.

In Diana’s Will, she appointed her mother, The Honourable Frances Ruth Shand Kydd and her sister The Lady Elizabeth Sarah Lavinia McCorquodale to act as her executors.

Gifts

Diana made various gifts of money and personal items in her Will:

  • The sum of £50,000.00 was left to Paul Burrell, Diana’s butler from 1987;
  • The sum of £100,000.00 and Diana’s clothes (including her wedding dress) were to be held in a discretionary trust for the benefit of Prince William and Prince Harry, their future family members and special charities. Royalties from authorised use of intellectual property (items containing Diana’s photo, name, etc.) and the accumulated interest of these assets was also to benefit the discretionary trust; and
  • Personal effects (including photos, paintings and china) were to be left to her 17 godchildren.

Residuary Estate

The remainder of Diana’s estate, once all debts had been paid (including the hefty Inheritance Tax bill) and gifts had been settled, was to be divided equally between Prince William and Prince Harry.

Letter of Wishes

Diana wrote a Letter of Wishes, which is not legally binding, to accompany her Will and requested that 75% of her personal belongings be inherited by Prince William and Prince Harry and the remaining 25% was to be distributed between her 17 godchildren.

Variation of the Will

In December 1997, shortly after Diana passed away, the executors obtained a “variation order” to vary the distribution of Diana’s Will.

Prince William and Prince Harry were to receive their share of the residuary estate upon reaching 30 years old, however, they could receive income from the estate at 25.

Rather than 25% of Diana’s personal belongings being distributed between her godchildren, the godchildren were instead allowed to pick one item chosen by the executors upon Prince Harry turning 30 in 2014.

The reasons for the executors wanting to vary Diana’s estate are unknown.

If you would like advice on Inheritance Tax planning, preparing your Will or administering an estate, please get in touch by email to WTP@mlplaw.co.uk or phone 0161 926 9969 and we can help.

We are offering COVID safe appointments at our Altrincham and Lymm offices, or telephone and Zoom appointments – whatever is best for you!

Nursery worker sacked after revealing pregnancy awarded £40,000

A former nursery manager, described by an Employment Tribunal Judge as having been dismissed because she was pregnant, has won her claim for unfair dismissal and discrimination, receiving nearly £40,000 in compensation.

Facts

Following the announcement of Ms Cousins’ pregnancy she was accused by her line manager of falsifying wages and was then deducted 95 hours without warning or explanation (although these were later repaid).  She was then sacked for gross misconduct on grounds that she falsified the hours worked and failed to use the sign-in book.  Until that point, Ms Cousins had described having a good working relationship with her manager.  

Furthermore, during disciplinary proceedings, Ms Cousins’ manager emailed her 90 questions about her time-keeping records at 5pm and demanded written explanations for them by 10am the following day.

Moreover, when Ms Cousins announced that she was pregnant, she was also denied her requests for important hospital appointments and was made to change the times of some of the visits, which later caused her problems.

Decision

The Employment Tribunal ruled that Ms Cousins had been unfairly dismissed and was subject to discrimination on the grounds of her pregnancy, describing the disciplinary process as ‘oppressive and high handed’.  It was determined that the reason for the Ms Cousins’ dismissal was her pregnancy.

Comment

This is a timely reminder to employers that any disciplinary action, however well founded, must be fair, reasonable and procedurally sound at all times but particularly so when the employee in question is pregnant.

If you have any questions about the above please contact the MLP Law Employment team at employment@mlplaw.co.uk or 0161 926 9969. Please also keep an eye out on our Twitter feed @HRHeroUK and for our regular blogs on all things Employment Law and HR.

Marriage under 18 to be Outlawed

It has been reported that the government have pledged to raise the minimum legal age to marry to 18 years old. Currently in England and Wales 16 and 17 year olds can marry if they have parental consent.

It is said that the government does support raising the age in order to protect vulnerable children and enable children to grow in order to maximise their potential life chances. It is thought by some that this legal loophole has been exploited to coerce young people into marriage. Forced child marriage has for sometime been a hidden and harmful practice

It is reported that the will be a private members bills introduced to make it illegal for anyone under 18 to marry.

If you have any questions or queries related to the above please contact Rachael Wood who is the head of our Family team on 0161 928 1581 or email rachaelw@mlplaw.co.uk.

Worker Status

Following the verdict in the recent case by Uber drivers – it is becoming increasingly clear that worker status is more dependent on the day to day reality of working life, rather than the wording of any contract.

With Uber drivers being defined as workers, they acquire certain legal rights, including the right to receive the National Minimum Wage and holiday pay.

Given this new focus on facts rather than contractual arrangements, businesses should review the relationship they have with all individuals that perform work or services for them and who are not currently regarded as either employees or workers, for example agency workers.

The employment law team at MLP consider that the key questions to ask are:

Who exercises day-to-day control over those individuals?

Are they in a position of dependency?

Who determines how much they are paid?

Who is responsible for their working conditions?

If you would like us to examine the status of staff in your business, contact the MLP Law Employment team at employment@mlplaw.co.uk or 0161 926 9969. Please also keep an eye out on our Twitter feed @HRHeroUK and for our regular blogs on all things Employment Law and HR.

The Pandemic and Annual Leave

Recent travel chaos has not dimmed the desire of many to travel abroad this year, leaving some employers concerned over how to operate a fair system of annual leave for all employees, whilst also continuing to ensure staffing levels are sufficient to efficiently run their business.  The employment team at MLP Law have therefore outlined answers to some frequently asked questions on this topic:

What should I do if lots of members of staff request annual leave for the same dates?

Remember that annual leave has to be approved by the employer and, provided that you do not unreasonably refuse any requests, you can ensure that you have adequate staffing levels to cover annual leave by granting some requests and refusing others.  On this basis, you may operate a ‘first come, first served policy’, in respect of approving or refusing annual leave.

Can I force employees to take annual leave at certain times?

Yes, you may wish to consider mandating times when employees have to take annual leave, to avoid employees storing up annual leave towards the end of the holiday year and also to reduce staffing levels during quiet spells.  An employer can require an employee to take annual leave by giving him or her a period of notice which is twice the length of the period of leave to be taken (ie 1 day’s notice for 2 days’ leave).

What are the rules surrounding employees who have to quarantine as the result of foreign travel?

Given what happened in Portugal recently, employers and employees must be mindful of how uncertain the rules surrounding foreign travel are.

Indeed, the temptation for employers is to discourage foreign travel entirely but some employees may have very good reasons for wanting to travel abroad – perhaps for their mental wellbeing or to have a much needed family reunion – so employers should be sensitive and not penalise employees for taking the chance to travel when the rules allow.  That said, an additional 10 day quarantine period, if a country moves from the green list to the amber list, is a significant length of time to do without an employee who cannot otherwise work from home.

Employers should therefore engage with affected employees, offering them the opportunity to use annual leave to cover the quarantine period or unpaid leave.  SSP can also be paid to such employees, if an employer is agreeable.

What are the rules of carrying over annual leave now?

The ability to carry over holiday entitlement regarding the first 4 weeks (or 20 days) of statutory annual leave has now been changed to allow it to be carried over for up to 2 holiday years (previously, there was no right to carry over this leave).  This change to the rules, however, does not apply if, despite Coronavirus, it was reasonably practicable for the employee to take the leave in the leave year that it relates to.  It may be, therefore, that employees will not have the right to carry this leave forward, if they could have taken it at the time it was due.

The remaining 8 days (or pro rata equivalent) can be carried over for up to 1 year if provided for in a relevant agreement between the parties – like the employment contract (there is no change here). 

If you have any further questions please contact the MLP Law Employment team at employment@mlplaw.co.uk or 0161 926 9969. Please also keep an eye out on our Twitter feed @HRHeroUK and for our regular blogs on all things Employment Law and HR.