alistair.wells, Author at Tend.legal

Shareholders’ Agreements: why do you need one?

Posted on March 30, 2021 by alistair.wells

Although shareholders’ agreements are not required by law, it’s often a good idea to put one in place when starting your business. When setting up a company you like to hope things won’t go wrong in the future but if they do it can be difficult to find a solution if the relationship has already broken down. Putting a shareholders’ agreement in place early on is a great way to prevent problems from arising later on down the line.

What is a shareholders’ agreement?

A shareholders’ agreement is a contract between the shareholders of a company to document the relationship between them. It provides clear guidance on their rights, obligations and what should happen in particular circumstances. This can include:

How shares can be transferred
How dividends are payable
Protection for minority shareholders
Alternative Dispute Resolution in the event of a dispute

What are the benefits?

Control over who owns shares in the company

A shareholders’ agreement can require existing shareholders to have first refusal to purchase shares providing security over who can and cannot acquire shares in the company.

It can require an employee who leaves the company to sell their shares back

Without a shareholders’ agreement, if a shareholder were to leave the company they can continue to hold shares and benefit from the business, despite the fact that they are no longer employed. A shareholders’ agreement can require shares to be sold back to the business upon termination of their employment.

Confidentiality

Shareholders’ agreements do not need to be filed at Companies House meaning that the contents can be kept confidential between the parties.

Resolving disputes

If shareholders reach a stalemate or fall out, an agreement can provide for Alternative Dispute Resolution through Mediation or Arbitration. Including provisions for Alternative Dispute Resolution means that parties are all on the same page if the relationship sours and may mean that costly litigation is avoided.

Greater protection

Shareholders’ agreements provide a greater level of protection than articles of association. This can be particular beneficial in providing assurance to any potential investors.

Restrictive covenants

Restrictive covenants can be included preventing shareholders from setting up a competitor or poaching clients and employees after exiting the company.

Greater control

A shareholder’s agreement can require a specific level of approval for specific actions or decisions by some or all shareholders, providing a greater level of control over the company.

These are just some of the benefits that a shareholder’s agreement may provide to your business and it is often sensible to put one in place.

If you would like to discuss putting a shareholder’s agreement in place for your company, please get in touch with us.

No jab, no job policies – are they allowed and what are the risks?

Posted on March 22, 2021 by alistair.wells

We recently asked our LinkedIn network what their views were on employers introducing no jab, no job policies. There were mixed opinions and 74% of voters didn’t think they were a good idea, if you’re interested, you can view our poll here.

These policies are something that organisations such as Pimlico Plumbers and Care UK have already adopted for new starters, but is this allowed or are businesses opening themselves up for potential claims?

Are they allowed?

Justice Secretary Robert Buckland confirmed that it is possible, in theory, to introduce a policy where employers can hire staff only if they have had the vaccine, this must be properly documented and included as a term of their employment.

While this sounds straightforward, it is something that must be considered in relation to each particular contract and there must be a clear rationale behind the policy. So, while such a policy may be appropriate for employees dealing with vulnerable people as part of their day-to-day job, it would be much more difficult to find a clear rationale in implementing the policy for office-based staff.

Discrimination claims

While it may be possible to implement the policy, employers will need to be mindful that if they refuse to hire someone because they haven’t been vaccinated, they could be opening themselves up to potential discrimination claims depending on the applicant’s reason for not being vaccinated. This could include:

Age discrimination claims in cases where the vaccine has not yet been rolled out to younger age groups;
Pregnancy related discrimination claims;
Discrimination in relation to religion or belief; or
Disability discrimination if an applicant has not been vaccinated due to another underlying health condition.

In cases where an employer is rejecting an application because an applicant has not been vaccinated, it will be important to understand why they have not been vaccinated in order to reduce the risk of any discrimination claims being brought against them.

Existing employees

Whereas a no jab, no job policy could be incorporated into the employment terms for new staff, it is unlikely to be something that can be easily rolled out to current employees. There are a number of issues that need to be considered.

Can vaccination be introduced as a contractual term for existing employees?

If an employer wanted to introduce the requirement for vaccination as a contractual term, this would be a variation of the employees’ contract and staff would need to be incentivised to agree to this. If an employee refuses to agree to the change of terms, the employer will need consider what the alternative would be, this again could put them at risk of discrimination claims, or if it is an employee with over two years services, they may be able to bring an unfair dismissal claim.

If the employer is instructing employees to get the vaccines and an employee refuses could this be sufficient grounds for disciplinary action?

Whether or not disciplinary action can be brought will depend on whether it is reasonable for the employer to instruct an employee to get the vaccine. There is an implied term in all employment contracts that the employee will follow reasonable instructions from their employer, so the important question here is whether this is reasonable. This will be largely dependent on the nature of the job. If an employee frequently travels abroad as part of their role, it may be reasonable for them to require vaccination, particularly if they are travelling to countries where vaccination passports are being introduced. In which case, it may be possible to justify disciplinary action and possibly dismissal.

Unfair dismissal claims

If an employee is subsequently dismissed because they haven’t had the vaccine, they may be able to bring an unfair dismissal claim. Given the risk, employers would need to be careful in recording the events leading up to any dismissal and proving that any disciplinary action or subsequent dismissal was reasonable.

Whether or not it would be reasonable to discipline or dismiss someone for refusing the vaccine is something that is yet to be established and it would be dependent on the specific facts of each case. Given the uncertainty, it’s probably best avoided!

Alternative options

It is obvious that employers are going to need to tread carefully in relation to any “No jab, no job” policies and consider whether such a policy is appropriate or required.

A sensible approach would be to make sure that your employees are properly educated on the vaccine, this may help encourage them to get vaccinated and avoid the need for such a policy.

Employers do have an obligation to protect the health and safety of their employees, so, if an employee refuses to get vaccinated, it is important to consider this as part of a risk assessment when returning to the workplace. An employer should consider if there are any alternative options that can be implemented to mitigate any health and safety risks, this could include some employees working from home on a more permanent basis if they were to refuse the jab.

If you’re looking for advice as an employer or employee, click here for ways to get in touch with us.

Settlement agreements – what are the pros and cons?

Posted on March 18, 2021 by alistair.wells

Settlement agreements are a common method used to terminate an employment relationship. They enable employers to pay an employee a termination payment in exchange for waiving their rights to bring a claim against them.

If you’ve been offered a settlement agreement, you may be wondering what the advantages and disadvantages to signing may be.

Advantages of a settlement agreement

They can avoid the stress, cost and time of bringing tribunal claim by resolving disputes at an early stage
They can provide a clean break from the employment relationship
Terms are agreed by both parties
The employee is provided with compensation for the termination of their employment

Disadvantages of a settlement agreement

If an agreement cannot be reached it may jeopardise the employment relationship moving forward
It may allow your employer to avoid dealing with any issues or grievances
You are waiving your rights to bring a claim a claim against your employer

Things to consider

Do you have any potential claims against your employer? This may include things like discrimination, whistleblowing or unfair dismissal.
Would the value of bringing a claim outweigh what is being offered under the settlement agreement?
How long will it take you to find new employment?

If you’ve been offered a settlement agreement, our Check My Settlement service provides a quick and easy way to get expert advice on your agreement.

Hello, we’re Tend Legal

Posted on November 30, 2020 by alistair.wells

Welcome. Thanks for stopping by. How are you finding the site?

We’re beyond excited to be going live with our new business and our new website; it’s something we’ve been working towards for months.

We had the idea back in the first lockdown of 2020. We had a vision of a law firm that works remotely by design, that offers outstanding legal services efficiently and communicates in a more human way. We wanted to find a way of delivering services that works for our clients, our family and (when we have one) our team. The more we thought about it, the more sense it made, so (after a lot of soul-searching, late-night discussions and even bit of prayer), we went for it. It’s been an intense few months, but we are now officially a firm of solicitors authorised and regulated by the Solicitors Regulation Authority, and ready for action.

It may seem like a risky time to give up a secure job and plunge into something new. The thought has crossed my mind more than once. But on the other hand, it might just be the perfect time – the world has changed, and with it the way we work and collaborate with each other. Every business is having to work out how it can adapt to the new normal, and innovation is far easier for a small new business than for an established one.

We don’t claim to have all the answers; this is very much the beginning of our journey, not the end. As we go along, we’ll continue to explore new and better ways of doing everything. We’ll let you know how we’re getting on on this blog, along with news of things we’re working on and legal updates we think you might need to know about.

The uber-talented Rich Wells (yes, he’s a cousin) was responsible for our branding and web design. We gave him a brief of creating an identity for a law firm that doesn’t look too much like a law firm. We think he’s nailed it and we’ve wasted much time gazing into the hypnotic animations he created.

The photos are by the wonderful Charlotte Webb. She took the time to really understand what we wanted and work with us to achieve that and was a pleasure to work with. She certainly succeeded in making us look better than in real life!