September 2021 - MLP Law

Can employers reduce salary for homeworking employees?

With increasing numbers of staff expected to return to the workplace, many employers are facing reluctant employees, used to eschewing the daily commute to work from home. But, some employers are viewing this shift in working practices as an opportunity for positive change for their business.
 
Employees only have a contractual right to work from home if the arrangement has been agreed with the employer; it is not automatic (particularly so, now that government advice is no longer to work from home where you can). Otherwise, an employee should make a flexible working request, which the employer is not obligated to grant if it will not suit the needs of the business. Indeed, the employer can justify refusing such a request on various grounds, for instance where such an arrangement is going to reduce productivity or prove expensive.
 
Employers should also remember that employees who want to make such a request must have at least 26 weeks’ service and cannot have made a flexible working request in the previous 12 months.
 
Yet, some employers are taking the opportunity presented by a request to work permanently from home to redraw key terms of homeworking employees. Employers are agreeing to allow more staff to work from home, full time or on a part-time, ‘hybrid’ basis, on the condition that the employee’s salary is reduced to reflect the fact that it reduces the employee’s costs, especially in expensive cities, such as London. Travel expenses and city bound benefits (such as gym memberships) can also be amended to reflect an employee’s new working location.
 
Such steps, however, can only be taken with the full agreement of the employee and should be confirmed in writing by varying the employee’s contract of employment or in a side letter. A unilateral change to an employee’s terms, without their consent, could give rise to a constructive unfair dismissal claim for breach of contract.
 
If you have any 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.

Costs of Contentious Probate Proceedings

A recent decision in the High Court has clarified the rules relating to who should pay the costs of a claim where a challenge to a will is abandoned mid-way through the trial.

The case of Goodwin –v- Avison dealt with a challenge to a will made by Mr Goodwin, a farmer and businessman who died in 2018 leaving an estate estimated to be worth between £3 million and £4 million. He had made a will in 2017 with the help of the then-girlfriend of his son, amending a previous will. That will was then formalised by solicitors and executed.

However, the son’s application for probate of his father’s estate was opposed by his sister, Jacqueline Avison, supported by her four children (although it appears that not all of them were actually in agreement with her). She alleged that the will had not been properly executed, that it was invalid as Mr Goodwin had not been fully aware of its contents and that the son and his girlfriend had exerted undue influence over Mr Goodwin.

The challenge in relation to the way in which the will had been executed was quickly abandoned but court proceedings were issued in relation to the other grounds and the matter came to trial earlier this year. However, on the sixth day of the trial, the sister and her children dropped their challenges to the will and conceded the case.

The judge then had to decide who should pay the (very considerable) costs of the proceedings. The usual principle in litigation is that the loser pays the winner’s costs, although the court does have a discretion in proceedings connected with the validity of a will to order that the costs of the challenge should be paid out of the estate. Crucially, however, this power is only exercised when the judge determines that the cause of the proceedings was the conduct of the testator (the person who made the will). Otherwise, the usual litigation rule applies and the losing party has to pay the costs of the successful party.

In this case, where a party alleged both undue influence and lack of knowledge and approval of the contents of the will, the default position is that the unsuccessful party will have to pay the costs related to both issues.

The judge was satisfied that the unsuccessful Mrs Avison and her children must pay both their own and also those of the claimant, Mr Goodwin’s son. On all of the three issues raised by the different defendants, none could be said to be the caused by Mr Goodwin. The judge also did not think the defendants had any reasonable grounds for challenging the will.

It is in our experience very common for a party who is unhappy with the contents of a will, or the circumstances in which it was said to have been made, to say that they want to challenge it in court. This is sometimes driven by a belief that the costs of doing so will ultimately be paid out of the estate.

The case is a good reminder that any party who is considering challenging a will must consider at an early stage whether the cause of the litigation can properly be said to be the actions of the testator, as well as whether there are reasonable grounds to challenge the will. If it can’t, it is dangerous to assume that their costs will be paid from the estate.

If you require assistance with an estate dispute, or just in relation to your own estate planning, please contact our Wills, Trusts and Probate department on 0161 926 9969 or by email at wtp@mlplaw.co.uk. We will be delighted to assist you with any requirements which you may have.

Shareholder Dispute

Sadly, disputes can arise between shareholders. Such disputes can potentially damage the business in many different ways including loss of shareholder value, business direction and reputation.

There are many reasons why disputes may arise and you may have already come across or had to deal with a dispute.

Types of shareholder disputes

–          Shareholders fall out;
–          Conflicts of interest in general;
–          Disagreement over the direction of the Company or the development of the Company;
–          Not feeling informed about the Company’s financial affairs
–          Feeling like the directors are breaching their directors’ duties; or
–          Lack of performance by either a shareholder or a director

Most sources of dispute can be avoided with frequent communication to ensure all parties have aligned expectations and matched understanding.  Shareholders’ Agreements are a key tool to help define the direction of the business, ensure all shareholders are aligned and understand their rights, obligations and the expectations placed on them by the company and other members of the company.  

Shareholders’ rights

Without a separate agreement, the usual practice of dealing with shareholder disputes is through the Company’s general meetings, legal correspondence and if necessary court proceedings.  Every shareholder has a right to:

–          Inspect the directors service contract without charge;
–          Bring personal claims against the Company;
–          Make an application for a derivative claim against a third party;
–          Make an application to the court against another shareholder under an unfair prejudice claim;or
–          Make an application to the court to wind up the Company if it is just and equitable.

Providing for and anticipating shareholder disputes in your shareholders’ agreement and articles of association is key. It can save a great deal money, a great deal of time and will inevitably resolve disputes without affecting the company.

MLP Law can help and advise you on any shareholder disputes, including how best to avoid them. Please speak to our Commercial team on 0161 926 9969 or email us commercial@mlplaw.co.uk.       

You can also view our previous blog “Shareholders Agreements and Articles of Association: Does my company need them?” Here

Record Inheritance Tax Receipts received by HMRC during the Coronavirus Pandemic

HMRC has recently released its new Inheritance Tax (IHT) revenue figures, for payments which have been received during Covid-19.
Due to higher increase in deaths at the start of 2021 and the delays to Grant of Probate, this resulted in July 2021 becoming HMRC’s highest IHT receipt revenue as they received £571 million during that month alone.
During the period of April 2021 to July 2021 HMRC’s actual IHT receipt total equated to around £2.1 billion, which is actually around £0.5 billion higher than the IHT receipts which they received during April 2020 to July 2020.*
 
Why does HMRC believe that Inheritance Tax receipts have increased during the Coronavirus Pandemic?
 
In HMRC’s monthly bulletin on tax receipts and national insurance contributions for the UK (released on 20th August 2021), it confirms that higher IHT receipts were received during the pandemic in the months of October 2020, November 2020 and March 2021 to July 2021. HMRC believes that this is because “higher volumes of wealth transfers took place during the Covid-19 pandemic”, although, they are unable to verify this statement at present until they have seen the full administrative data on IHT receipts.*

What do financial advisors and analyst’s think about HMRC’s Inheritance Tax receipts increase?
 
Sarah Coles, a personal finance analyst at Hargreaves Lansdown has commented on the IHT revenue figures. “The pandemic has pushed Inheritance Tax and Stamp Duty on property purchases to record highs in July. The horrible rise in deaths from coronavirus at the beginning of this year meant an increase in IHT as those estates finally made their way through Probate.”

Whereas, Julia Rosenbloom, a tax partner at Smith & Williamson commented on the IHT revenue figures by stating that “One of the key drivers for the uplift will no doubt be the announcement in this year’s Spring Budget that both the nil rate and residence nil rate bands are to be frozen until at least April 2026, resulting in increased IHT bills for families as more estates are brought into scope on the back of soaring property and share prices.”

Julia goes on to confirm that she believes that “Increases to IHT charges could affect many and some may need to go as far as selling family homes to pay their IHT bills. Starting tax planning as soon as possible will mean that people can make the most of their current allowances before any new reforms are introduced.”*

                                                                                                                                      
If you would like to discuss tax and estate planning, in order to take full advantage of any current tax allowances which you and your spouse/partner have available, please contact our Wills, Trusts and Probate department who will be delighted to assist you with these and any planning needs and requirements which you may have on 0161 926 9969 or by email at wtp@mlplaw.co.uk

* Sources Used

My week’s placement with MLP Law

During my summer break from studying Law at Manchester Metropolitan University, I spent a week at MLP Law gaining experience in the Corporate and Commercial, Residential Property and Wills, Trusts and Probate departments.

Monday
Monday was my first day with MLP Law and after a tour of the head office in Altrincham, I sat with the Wills, Trusts and Probate team.  From the beginning I was treated as a member of the team and not simply as a student completing a week’s placement.

I attended a client meeting with the Private Client Partner, Jane Hunter, where I was a witness to a Will signing and I also assisted in a meeting handing over original documents to clients. I was also introduced to the firm’s case management system and completed some administrative tasks.

Tuesday
On Tuesday, I sat with the Commercial and Corporate team and I had the opportunity to shadow the Owner and Director of MLP Law, Stephen Attree. Stephen explained some of the cases he’s working on and showed me email correspondence between him and his clients. This was a great learning opportunity for me, as Stephen would ask me what I would advise clients before telling me what he would do. During this discussion, Stephen explained ‘legal jargon’ to me and I developed an understanding of how to phrase correspondence to clients.

I also had the opportunity to research and produce a blog on artificial intelligence in law. I also got the opportunity to read the MLP handbook which new starters at the firm get access too, this allowed me to understand the firms core values and beliefs.

Wednesday
On Wednesday, I was back with the Wills, Trust and Probate team, shadowing one of the paralegals at the firm, James Kenny. I researched and produced a blog on Lasting Powers of Attorney and James then went through my research and he explained some of the terms which were unfamiliar to me.

I was given the opportunity to attend a meeting with the Wills, Trusts and Probate department and a company who offer estate administration assistance (for example, property maintenance, property valuations and valuations of personal items).

Throughout the day James took the time to explain everything he did and why he was doing it which was useful in helping me fully understand the difference in terms of the role of a paralegal and a solicitor.

Thursday
On my penultimate day with the firm, I sat with both The Wills, Trusts and Probate team and the Residential Conveyancing team.

I started the morning by researching what a Grant of Probate was before assisting Sophie Lennon, a paralegal, in handing over original documents to clients.

In the afternoon I spent time with the firm’s residential conveyancer, Katie Mitchell. Katie explained the role of a conveyancer in detail and the methodical nature of conveyancing was something I immediately found appealing.

Katie also described how she had qualified following her law degree as a licensed conveyancer and that she had not taken the ‘traditional’ route to qualify as a solicitor. It was interesting to learn that Katie’s job is the same as that of a solicitor and following my conversation with her, I will definitely look into the various routes of qualification in the legal industry.

Friday
On my final day at MLP Law I returned to the Corporate and Commercial team. My day began conducting research on behalf of a client explaining what a Foreign Public Officer was by analysing Section 6(5) of the Bribery Act 2010.

Stephen Attree and I sat down once again to discuss my week’s experience and my plans for the future. During this conversation, Stephen shared his exciting visions for the future of the firm with me.

My week in summary
Overall, my experience at MLP Law was great. The atmosphere was so friendly and the team were so patient with me.  This was my first time working in a law firm and it was very different to what I had been expecting – it was absolutely nothing like Suits!

I was grateful to experience the day to day running of a law firm and it has reassured me that I am making the right career choice!

This experience has equipped me with additional skills which are not taught on the LLB course and has allowed me to compare the theory heavy nature of studies to the actual day to day practice of a law firm.

If you would like to be considered for a work placement or paid internship, please get in touch and send your application and CV to alissaw@mlplaw.co.uk.

Paid time off for Covid Vaccines

A recent study by ACAS (the employment conciliation service) showed that 75% of employers were allowing staff paid time off to have the Covid vaccine.  The remaining 25% did not allow such leave and had no plans to approve it.
 
With 5 million adults yet to have their first dose of the vaccine, causing concern to scientists and politicians, we examine an employer’s responsibilities regarding employees who have not yet had the vaccine but now want to take it.
 
What are the rules regarding time off for vaccination?
Employers are not under an obligation to allow paid time off to staff who wish to have the vaccine during working hours.  Yet, with many local pop up clinics, clinics running late into the evening and at weekends, it is possible for staff to arrange to have the vaccine outwith working hours.
 
For many, however, it has not proved possible to obtain an appointment that does not interfere with work, which has contributed to some not obtaining the vaccine.  An employer, however, is not under a legal duty to allow paid time off for staff to have the Covid vaccination, although, as the ACAS study demonstrates (surveying 2000 UK business), many employers have provided paid time off to encourage uptake amongst staff.
 
What are the rules regarding sick pay?
Where an employee is ill due to side-effects from having the vaccine, that individual should be treated in the same manner as any other employee who is absent from work due to ill health.  If that employee is entitled to company sick pay or SSP (statutory sick pay) then they must be paid accordingly. 
 
The ACAS study has, however, shown that the majority of employers have paid affected employees full pay (rather than, for instance, the lower SSP rates) in such circumstances.  Again, such a move is viewed as prudent, given that a vaccine policy that supports staff to take time off, is likely to provide longer term benefits, as vaccinated workers are less likely to need longer periods of time off work to recover from Covid.
 
It also bolsters an employer’s position in respect of health and safety responsibilities towards staff, to have such a positive approach.
 
Gender Pay Gap Reporting Deadline
 
Regulations introduced by the Equality Act 2010 require large employers (employers in the private sector with over 250 employees) to publicly publish certain measures which outline differences in pay between male and female employees. The government believes that increasing pay transparency will lead to employers taking more action to address pay inequality.
 
The deadline for publishing a private employer’s Gender Pay Gap Report has been extended until 5 October 2021 (due to the Pandemic).  The Report must provide information from a snapshot of the relevant pay figures on 5 April 2020.
 
If you require assistance with your business’s Gender Pay Reporting obligations, please do not hesitate to contact us.
 
If you would like to advice from the Employment team at MLP Law in respect of any of the issues raised here or more generally, please do not hesitate to get in touch on 0161 926 9969 or employment@mlplaw.co.uk, or follow us on Twitter @HRHeroUK.

MLP Law’s Furlough Review

Workplaces have changed a lot in the past 18 months and employers are now enjoying a return to more normal practices. This is set to continue with the end of the Furlough Scheme (Coronavirus Job Retention Scheme) on 30 September 2021.
 
The end of furlough is also a timely reminder to employers of HMRC’s power to audit furlough claims at any time and the obligation to retain furlough records for at least 5 years. It is therefore crucial that employers have full and accurate records of all of their furlough claims, including their agreements with employees, to minimise the risk of failing an HMRC audit.
 
To help employers with this and with managing the return to normality, MLP Law has created a useful Furlough Review service which includes:
 
an audit of your furlough claims;
– a risk assessment of your furlough records;
– template contractual side letter to confirm the end of furlough arrangements and your employees’ return to their original terms; and
– a bespoke workplace policy, tailored to your plans for the post-furlough and post-lockdown era, covering issues such as Return to Work, Homeworking, Hybrid Working and Mental Health & Wellbeing.
 
The MLP Furlough Review is available for a fixed fee (starting from £350 plus VAT) or can be accessed through your MLP Flex allocation.
 
Get in touch with Gareth Matthews or Julie Sabba in the MLP Law Employment Team on 0161 926 9969 or employment@mlplaw.co.uk, to discuss how our Furlough Review can help your business get ahead of the game.

Top Tips for Employers as Furlough Ends


With the Coronavirus Job Retention Scheme (Furlough) due to end later this month on 30 September, employers are gearing up to manage the impact and the employment team at MLP Law want to make sure you’re ready.
 
We have therefore prepared this helpful guide on some key issues that will be relevant in a post-Furlough business.
 
Redundancy
The very essence of Furlough was to provide financial support to employers to ensure the continued existence of viable jobs. Not all jobs, however, will be viable after the mask of Furlough is removed. This means that some organisations will be faced with stark decisions about how to shape their business in the future and may have to implement redundancies; either in relation to a few particular roles or as part of a wider reorganisation.
 
Post-lockdown, many businesses, rusty on the principles of a fair redundancy process, should remember the basic principles:

– warning affected employees,
– adequately consulting with them, and
– making decisions based on fair and objective criteria.

If you are considering the need for redundancies in your business, please get in touch with the MLP Law Employment team who can guide you through the process, minimise your risks and help you avoid the pitfalls.
 
Annual leave
Furloughed employees may not have been keen to use their annual leave, given that they have not been working, either fully or at all, whilst furloughed and do not feel in immediate need of rest and relaxation! Employers should therefore remind employees of any policy they have regarding annual leave and encourage employees to spread their holidays over the remainder of the holiday year. If necessary, employers can also require employees to take holidays on certain days This avoids the problem of having several employees wanting to take holidays at the same time at the end of the holiday year.
 
Businesses should also remember that workers who have not taken all of their statutory annual leave entitlement due to COVID-19 will now be able to carry it over into the next 2 leave years (applicable from March 2020).
 
If you need help dealing with employee holidays post-furlough, please get in touch to discuss our practical tips for minimising disruption.
 
Mental Wellbeing
With employees who have been furloughed long term, employers will have to be mindful that returning to the workplace, either remotely or physically may give rise to some anxiety amongst affected employees. This could include anxiety about travelling on public transport, sharing kitchen facilities and varying attitudes to risk amongst colleagues (and therefore protective measures such as mask wearing).
 
To minimise the risk of staff absence and associated disability discrimination claims, employers should take some preventative measures, such as promoting clear channels of communication for staff to air concerns and treating worried employees sympathetically and confidentially.
 
If employers can make reasonable allowances for staff members who have concerns in the initial stages of a return to work (for instance, allowing varied working hours to avoid busy public transport), it can help to prevent any issues from escalating into employment claims.
 
The MLP Law Employment team can help with practical tips for welcoming your employees back to the work place – please get in touch to discuss further.
 
Contractual Considerations
Most employers will have sent out letters to employees who have been furloughed, temporarily changing the relevant terms of their employment contract and allowing for those terms to revert to the original terms, when the employee is no longer subject to Furlough. In some cases, however, where the position has not been expressly recorded in writing, employers may wish to clarify and record that Furlough is ending and the employee’s terms are to revert to those applicable pre-Furlough.
 
In addition, some employers may not want to revert back to those original terms, wishing to permanently alter an employee’s place of work or working pattern. In such cases, care should be taken to follow the correct process to vary contractual terms, to avoid employment tribunal claims. Equally, just as employers should not assume that changes made due to the Pandemic and Furlough can continue without obtaining an employee’s consent, they should also be aware that some employees may incorrectly assume that changes made during the Pandemic now form part of their contract.
 
In essence, where employees are returning from either flexible or full time Furlough, the position going forward should be clarified in writing by the employer.
 
The Employment team at MLP Law can help you review your contractual situation and advise on any steps required to ensure there are no legal or practical misunderstandings.
 
Health and Safety
The usual employer obligations relating to ensuring the safety of the workplace continue to apply and employers should therefore monitor government guidance for the most current advice regarding Covid-secure measures. In particular, the rules around who should isolate and when have become more complex, and can depend on an individual’s vaccination status.
 
To discuss your obligations further, please get in touch with the MLP Law Employment team.

You can always reach the MLP Law Employment team at employment@mlplaw.co.uk or 0161 926 9969 if you require any assistance in relation to any of the issues raised in this letter. Please also keep an eye out on our Twitter feed @HRHeroUK and for our regular blogs on all things Employment Law and HR.

Business Start Up Guide

So, you’ve made the decision that you want to be a business owner, the next question is how do you go about it?  What exactly do you need to start your own business?

We, at MLP Law, are here to help.  Our highly experienced team of lawyers will advise you on and guide you through the processes and procedures you will need to put in place to help turn your business dream into a successful reality.  Download a copy of our booklet which sets out the 9 areas you will need to consider before launching your own enterprise.

For a copy of our booklet, please complete the form below. If you wish to speak to our experts at MLP Law for more information and professional guidance please contact our employment and business teams on: corporate@mlplaw.co.uk

As well as checking your inbox please check your junk mail for our guide as it may be sent there.

[contact-form-7 404 "Not Found"]

North West Businesses amongst most Confident in UK about Economic Recovery

A survey of British business confidence has highlighted an optimistic attitude, predicting a strong economic recovery to pre-pandemic levels, most notably amongst businesses in the North West.
 
The monthly survey of 1,200 firms was conducted between 2 and 16 August, with employers in England’s North West and East reporting the biggest increases in confidence.
 
Some businesses displayed caution, however, with reference to inflation and staff shortages – an issue we have previously covered here.  Indeed, with uncertainty over the level of inflation and the impact of price pressures, some companies are still wary of what may lie ahead.  Nonetheless, firms in manufacturing, services and construction were particularly positive that recovery would continue.
 
The newly discovered confidence was largely driven by improvements in companies’ trading prospects and expectations of stronger growth in the year ahead, with particular emphasis on continued success of the vaccine rollout, the removal of lockdown restrictions and adjustments to self-isolation rules.  Moreover, these factors have combined to allow staff to return to their physical places of work in increasing numbers, which has provided a greater sense of normality and stability – please click here, here and here for our previous blogs on “Freedom Day” – with guidance for employers as workers return to their physical workplaces.
 
A regional breakdown outlined that confidence had increased in nine out of the 12 UK regions and nations in August with particularly strong rises in the North West, up 26 points to 64% and the East of England, showing a rise of 14 points to 39%.
 
Similar positive data has also been issued by the Office for National Statistics, which suggested that the labour market continues to “rebound robustly”.
 
Wider economic conditions have also been improved as government borrowing falls, in line with the winding down of  furlough support, coupled with tax receipt rises.
 
If you have any 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.