Author: Shona Wells

Basics of TUPE Transfers – 4 Key Points to Remember

Posted on by Shona Wells

TUPE transfers are a complex area of employment law requiring specialised legal advice to navigate successfully without any hurdles. Still, understanding the basics helps you communicate with your solicitor more efficiently, mitigate risks, and make more informed decisions regarding your growing business. 

Read our guide below to get a better grasp on TUPE transfers, what they mean, who they apply to, and their legal implications – let’s get started: 

What Is TUPE? 

When a business or part of a business is sold or transferred to another business, employees must automatically transfer from the first employer to the second, maintaining the same terms of employment and continuity of service as before.

The Transfer of Undertakings (Protection of Employment) Regulations 2006, also called TUPE in short, is the UK law protecting the rights of employees in cases like the one above. It ensures that employees transfer with the business and that the transfer does not affect any aspect of their employment such as continuity or salary. 

It is important for any start-up, agency, or large enterprise to be aware of the legal responsibilities involved in a TUPE transfer

When Does TUPE Apply?

TUPE regulations apply in cases where there is a “relevant transfer”, which can mean either:

A Business Transfer

A business or part of a business that is sold or bought by your company. The transferred economic entity must retain its identity throughout this process. 

A Service Provision Change

This can involve:

  • An initial outsourcing of service – the client hires an outside contractor to provide certain services on the client’s behalf
  • A subsequent transfer – the client reassigns a contractor’s work to another
  • Bringing the service back in-house – client brings the work back ‘in-house’ 

When talking about TUPE, you’ll often hear the terms ‘transferor’ and ‘transferee’. In this case, the ‘transferor’ refers to Employer A, which is the seller of a business or the client outsourcing services (in other words, the previous employer). The ‘transferee’ refers to Employer B, the buyer or the outsourced service provider. The employees and resources that are being transferred under TUPE are also called the ‘organised grouping of employees or resources’. 

Who Do TUPE Regulations Apply To?

TUPE is a UK law, which means that it only applies to organisations that are in the UK. However, it might also apply to international transfers if:

  • An employee works abroad, but the business is UK-based
  • Part of the business is moved abroad as a result of the transfer (this must be the direct purpose of the transfer)

In the case of service provision changes, the organised grouping of employees must be based in the UK for TUPE to apply.

TUPE will apply to businesses regardless of:

  • Size – it applies to any organisations from small start-ups to scale-ups and large enterprises
  • Sector – it applies to businesses operating in all industries regardless of whether they are a public or private company or a charity

4 Key Points to Remember if TUPE Applies

Automatic Transfer

If TUPE applies, Employer A’s organised grouping of employees or resources immediately transfers to Employer B on the transfer date. This transfer must happen on the exact same terms of employment as before while ensuring service continuity. This includes:

  • Income
  • Holiday pay
  • Medical insurance/other insurance
  • Bonus and commission schemes
  • Maternal/Paternal leave schemes
  • Redundancy pay
  • Any other pre-existing employment terms.

Terms such as old age, invalidity and survivors’ benefits under occupational pension schemes are not included in the list. 

After the transfer, employees will be treated as if they had always worked for Employer B.

If an employee or group of employees is dismissed specifically because of the transfer, and not an “economic, technical or organisational reason entailing changes in the workforce” (also called an ETO reason), it will be automatically considered an unfair dismissal. 

Changes To Terms May Be Void

Any changes to your employment terms and conditions may also be considered void if the reason for the changes is:

  • The transfer itself 
  • A non-ETO reason

If the changes to your conditions of employment happen for an ETO reason or are otherwise unrelated to the transfer, then they won’t automatically be considered void.

Because of this, sometimes transferred employees can have different employment terms compared to Employer B’s already existing employees. In such cases, the current employer might choose to ‘harmonise’ all employment terms and conditions. This way, all employees work under the same terms. This would only be allowed if the transferred employees’ terms improve, and not if they become worse. For example, an employee may not get a decrease in paid time off but could get an increase. 

Employer and employee reading contract together
When it comes to TUPE transfers, affected employees’ contracts and terms of employment cannot be changed for reasons related to the transfer or for non-ETO reasons

Obligations To Inform And Consult

Both Employer A and Employer B have a legal obligation to inform and (in certain situations) consult with any of their employees who may be affected by the transfer. 

If an employer has more than 50 employees, and more than 10 employees are transferring, then the employer must inform and (if applicable) consult with a recognised trade union or employee representatives on behalf of the affected employees. 

If there is no recognised trade union and no representatives, the employer must arrange for employee representatives to be elected. 

However, if an employer has fewer than 50 employees or fewer than 10 employees are transferring, then the employer can inform and consult with the affected employees directly.

The obligation to inform applies to any TUPE transfer and the information to provide is prescribed by TUPE. However, employers are only obliged to consult with affected employees or their representatives when they envisage taking measures concerning the affected employees.

Employee Liability Information

Employer A also has the additional obligation to provide all relevant information to Employer B not less than 14 days before the transfer date. The information must relate to each transferred employee, including disciplinary and grievance records. 

If Employer A does not fulfil this responsibility, then Employer B is entitled to compensation based on any losses suffered. Legal penalties can start at a compensation of £500 per employee whom information was not provided for.

Common Questions Employees Ask Regarding TUPE Transfers

Business transfers can be a confusing time for employees. This is exactly why it is important to highlight their legal rights of employment post-transfer to mitigate any ongoing concerns.

How Long After A TUPE Transfer Can My Employment Contract Details Be Changed?

As per TUPE regulations, employees are protected from any contractual changes indefinitely. This specifically applies to contractual changes that happen due to the transfer itself, or for any non-ETO reasons.

Employers also have the legal responsibility to ensure the continuity of employment terms without any pause.

Can My Salary Be Reduced Under A TUPE Transfer?

As mentioned before, your new employers cannot modify your contract of employment if it involves worse terms or working conditions. Any changes to your salary must be an improvement to your pre-existing terms and conditions.

Get Expert Legal Advice On Employment Law Matters With Tend Legal

While we’ve covered the basics, it’s important to realise that TUPE laws are complex and require expert knowledge to navigate. Whether you’re a business looking to sell parts of your organisation, or an enterprise changing their service providers, if you believe TUPE applies to your situation then you should consider seeking legal help. Hiring expert legal advisors will help you ensure your business stays compliant at all times.

At Tend Legal, we offer expert advice on all matters relating to employment law (and not only!). We deal with all the complex legal hurdles to ensure a smooth transfer for your business. Learn more about our expertise or contact us today to schedule a free, no-obligation consultation!

10 Types of Legal Documents Your Start-Up Needs in the UK

Posted on by Shona Wells

Starting a small business is a very exciting but also challenging time in the life of any entrepreneur. Depending on your business structure and industry, you’ll need to sort out many different types of legal documents before your business can legally operate. Each business has different needs as well, which makes it all the more difficult to figure out what you need to stay compliant with the law.

At Tend Legal, we help new business owners understand the legal requirements for starting a business in the UK, starting with the essential documents.

Starting a Business in the UK - Legal Requirements

The most essential types of legal documents are the documents that register your business, protect individuals’ data, health, safety, and rights, and protect intellectual property. Each document will define how you interact with suppliers, shareholders, customers, and employees, so it’s important to get it right. Let’s have a more detailed look below:

Ownership Documents

As a newly formed business, your start-up will require legal documents which govern the relationship between co-owners of the business.

There are two main types of documents to consider depending on your business structure:


  • Shareholders Agreements and Articles of Association

If you’ve set up a limited company with others, you will need a shareholder agreement and articles of association. These documents outline the rights and responsibilities attached to each type of share, rules around decision-making and share transfers, and outline what happens in various scenarios such as the departure or death of a shareholder or disputes between shareholders.

  • Partnership Agreements

If your business is a partnership, a partnership agreement is essential. This document outlines the duties, rights and responsibilities of all partners involved. It can help streamline the decision-making process of the partnership, as you will know exactly how decisions are made at a strategic level within the company. A partnership agreement will also provide for what happens if a partner leaves the partnership. 

Data Protection Documents

Personal data is any information that relates to a person who could be identified, directly or indirectly, based on that information.

Most businesses nowadays will collect personal data in some way. For example, information relating to employees of the business, or email addresses of customers or clients. 

Handling personal data in the UK is regulated by UK GDPR, and the consequences of failing to comply can be very serious.  If your business deals with customers, suppliers or partners in other countries, you may have to comply with the data protection rules of that country also.

The data protection documents each company needs will depend on its data processing activities, but they will generally include a data protection policy, privacy notices and data processing agreements.

Having the right data protection documents in place helps businesses communicate what personal data they collect and process, as well as what they intend to do with it. This is a legal requirement, so it’s important to get it right. 

Terms and Conditions

If you’ve ever used an online store or business website, you’re probably familiar with the famous Terms and Conditions (or T&Cs). Any business that has a website that visitors interact with needs a comprehensive T&C document that contains:

  • Terms of use for your visitors
  • How products and services are delivered
  • Cancellation and renewal policies

Your T&C document shouldn’t just be a template downloaded from the internet – it needs to be specifically tailored to your business and also updated regularly to avoid any issues. If you’re unsure how to write your T&C document, consider hiring an expert legal team specialised in advice for start-up businesses. 

Contracts for Goods/Services

As a business, you will also need legal documents to record any trades of goods and services, regardless of whether you are the buyer or the seller. 

There are two ways to go about it:

  • Unique contracts, tailored to a specific deal (e.g. hiring a consultancy service)
  • Standard contracts, presented on a take-it-or-leave-it basis (e.g. selling goods in an online store)

Whether unique or standard contracts are most appropriate will depend on the goods or services you’re buying or selling. In either case, it’s important that the contracts relate specifically to your business and cover key areas of risk. As a minimum, they should include:

  • an accurate description of the goods or services being provided
  • pricing and payment terms
  • any relevant time frames for the supply of goods or services
  • ownership of any deliverables
  • term of the contract
  • termination rights
  • other provisions specific to the goods or services in question.

It’s important to get legal advice from an expert commercial lawyer on what to include in your contracts, to make sure your business is properly protected.

Intellectual Property

As a business owner just getting started on the fulfilling journey of entrepreneurship, you should become familiar with the term “intellectual property rights”. If you’re introducing new ideas, new designs, or any other form of intellectual property (“IP”), you will want to make sure you protect them from potentially being stolen. IP can also include things such as your brand name and logo, trade secrets, your website content, or your customer database. 

The form of IP protection you need will depend on the type of IP. It might include registering a patent to protect inventions or innovations, or a trade mark to protect your trading name and logo.

When working with third parties such as investors, vendors, suppliers, and independent contractors, you may have to share confidential IP with them. This is where a Non-Disclosure Agreement (NDA, or confidentiality agreement) comes into play. An NDA can help:

  • State which information provided to third parties is to be kept secret
  • Outline the potential legal recourse taken in case of confidentiality breach 

Some sensitive information could jeopardise your business if revealed to the wrong parties, so it’s important to protect yourself with an NDA. You should also consider what sensitive information you need to share and whether there are any technological or other ways of limiting how that information can be used.

Lease/Tenancy Agreements

If your business has physical premises, you’ll need a tenancy or licence agreement for it. This agreement will be provided by your landlord, but it is important to make sure you understand the terms and are not leaving your business unnecessarily exposed.

These terms and conditions include but are not limited to:

  • Tenancy term
  • Rent amount
  • Insurance
  • Liability for repairs, alterations, and improvements
  • Subletting and assignment
  • Termination and renewal rights of each party
  • Security (for example rent deposit or personal guarantee) 

Tax

When starting a new business in the UK, there are several key tax documents you need to have in place:

  1. Registration Documents: Depending on your business structure (sole trader, partnership, or limited company), you must register with HM Revenue and Customs (HMRC). Sole traders and partnerships need to register for self-assessment, while limited companies must register for Corporation Tax.
  2. VAT Registration: If your business’s taxable turnover exceeds the VAT threshold (currently £85,000), you must register for VAT. You’ll need to keep records of sales and purchases, issue VAT invoices, and submit VAT returns.
  3. PAYE Registration: If you plan to employ staff, you must register as an employer with HMRC and operate PAYE (Pay As You Earn) to handle income tax and National Insurance contributions.
  4. Business Rates: If you operate from business premises, you may need to pay business rates. Ensure you have documentation related to your business property and any applicable reliefs.
  5. Annual Accounts and Tax Returns: Limited companies must prepare annual accounts and submit a Company Tax Return to HMRC. Sole traders and partnerships need to complete an annual Self-assessment tax return.
  6. Record Keeping: Maintain accurate records of all business income and expenses, as well as any other relevant financial documents. This is crucial for tax purposes and for preparing your annual accounts.

These documents are essential for ensuring your business complies with UK tax laws and operates smoothly.

Health and Safety

As a business, you will need to abide by strict health and safety regulations to ensure you, your customers, and your employees stay protected. If your business operations deal with heavy machinery or chemicals, you might have additional laws that you need to adhere to. The basic requirement for documents includes:

  • Risk assessments (in writing if you have five or more employees)
  • Health and safety policy (in writing if you have five or more employees)
  • Accident and incident reports
  • Information and training for employees
  • Poster in your workplace setting out health and safety laws.

However, make sure to check your industry’s health and safety regulations, which could impose further obligations. You can find more details on the HSE website.

Employment 

Even if your business only has one or two employees, you will still need to make sure you keep a contract for each. The contract ensures that each employee is fully aware of their employment terms, responsibilities, and salary. It can also include clauses that give additional you additional protection, such as post-termination restrictive covenants which prevent departing employees from taking clients or colleagues with them.

You should also have policies that set out information on grievances, disciplinary action, and other HR procedures.

Insurance

When starting a new business in the UK, securing the right insurance policies is crucial to protect against unforeseen risks and liabilities. You will need:

  • Employers’ liability insurance – legally required if you hire staff, covering claims for workplace injuries or illnesses. 
  • Public liability insurance – essential for businesses interacting with the public, protecting against claims for injury or property damage caused by your business activities. 
  • Professional indemnity insurance – vital for businesses providing professional services or advice, covering legal costs and compensation if a client suffers a financial loss due to your work. 
  • Product liability insurance – important for businesses manufacturing or supplying products, safeguarding against claims of injury or damage caused by defective products. 

Other key insurances include commercial property insurance to protect your business premises and contents, and cyber insurance to cover data breaches and cyber-attacks. These insurances help ensure your business is well protected from various risks, allowing you to focus on growth and success.

Why Is It Important to Have The Right Legal Documents as a Start-up?

Now having the right documents in place exposes you and your business to risk. Not only can this affect your reputation, but it also leaves you vulnerable to potential legal issues and disputes. After all, the law can’t protect you if you don’t follow it. 

Any potential disputes that arise from non-existent or poorly made written contracts can lead to a lot of money and time loss, resources which are essential to running your business and achieving your goals. 

On the other hand, having the right documents in place reduces uncertainty and risk, and shows customers, partners and investors that you are a well-run business that takes compliance seriously and manages risk.

Consider the following example: You hire a contractor without a written agreement. They don’t complete the work required, leaving you with an incomplete job to fix yourself or hire an additional contractor to sort out. This takes away more time and money which would have been better used in other things like successfully running your business. 

In this case, a written agreement could have clearly outlined the tasks and responsibilities of your contractor. If they don’t complete it in full, you have proof of your past agreement which you can use to support your claim and potentially get a refund for the services. 

Get Expert Legal Support With Tend Legal 

Our expert solicitors at Tend Legal are here to help you understand the ins and outs of starting a business, helping you set up all the essential legal documents to operate lawfully. 

In need of legal advice for start-ups, scale-ups, and agencies? Book a free, no-obligation consultation today and let’s discuss!

What is the Difference Between Corporate and Commercial Law?

Posted on by Shona Wells

No matter if you’re a start-up or established business, you will have to deal with matters related to both corporate and commercial law in order to operate legally, morally, and safely. Both niches relate to your business and how it operates but approach it from very different angles. 

When hiring a solicitor, it is important to choose lawyers who specialise in the area you need help with. Understanding the main differences between corporate and commercial law is key to finding the right legal advisor for you. Let’s explore these differences more in-depth below:

What Is Corporate Law?

First, we’ll have a look at corporate law.

Corporate law, also known as company law, is the field of law that deals with your company as a whole. In other words, it is the law which governs your business as an independent legal entity and all the people who own and/or manage that business. Corporate law firms will help aid your interactions with other companies (e.g. mergers and acquisitions) as well as your inside operations (e.g. company-wide restructures).

Corporate law also deals with corporate governance and finance, playing an essential role in any large-scale transactions at a company level.

Corporate lawyers can cover a wide range of legal matters, including but not limited to:

 

    • Company mergers and demergers

    • Buying and selling companies

    • Shareholder rights and agreements

    • Raising capital

    • Formation, corporate restructuring, and dissolution of companies

    • Litigation

    • Insolvency

A corporate solicitor will also be a key link between your company and its shareholders or investors. They provide legal assistance with contract negotiations to protect your interests and get the best deal for your company. If you are a start-up, business lawyers can also deal with all the rights and obligations of setting up, financing, and running your company.

Bottom-up perspective of skyscrapers

What Is Commercial Law?

While corporate law is more concerned with big-picture issues, commercial law deals with day-to-day company operations such as commercial transactions, business deals, and commercial trading. Commercial law, at its core, will deal with all things that turn a profit. It helps make sure every commercial activity and transaction is compliant with consumer law and other regulations.

An expert team of commercial lawyers will help you stay within the bounds of the law regarding a wide variety of legal matters, such as: 

 

    • Contracts for supply of goods or services

    • Terms and conditions of sale or purchase

    • Terms of website use

    • Privacy notices

    • Data protection

    • Consumer law

    • Contract law

    • Intellectual property rights, including trademarks and patents 

    • Litigation

    • International trade

The work of a commercial lawyer is varied, as they regularly negotiate contracts, deals, and agreements for your business as well as prepare standard documents for your business and advise on compliance.

Two men in suits signing contracts

Corporate vs. Commercial Law – What Are The Differences?

As you can see, both corporate and commercial law are essential in ensuring proper business conduct no matter the industry you operate in. They are closely related as they both deal with legal issues pertaining to your company. Ultimately, they both help your company grow and thrive.

 However, the main difference between corporate and commercial law is that they govern very different types of operations. Corporate law will deal with big-picture issues, aiding your business in its partnerships with other companies, while commercial law protects your business interests in your day-to-day operations with customers or clients. 

Still, both corporate and commercial lawyers will share lots of similar skills, useful when dealing with the broad range of activities that legal work involves:

 

    • Extensive knowledge of their respective jurisdictions

    • Strong communication and negotiation skills, useful when negotiating settlements, shareholders’ agreements, or arguing court cases

    • Effective teamwork, helpful when liaising with their team but also when giving legal advice to business owners, making sure everyone is on the same page so the process can run as smoothly as possible

    • Problem-solving, helping them achieve the best results possible for their clients

Commercial and Corporate Law Advice With Tend Legal

When dealing with the legal hurdles of setting up or running a business, there is no room for mistakes. If you want to ensure all your documents, transactions, and operations are compliant with the law, it’s important to hire lawyers experienced in the relevant area of corporate and/or commercial law. 

Our expert solicitors at Tend Legal are here to help you understand the ins and outs of your business, keeping your best interests in mind and helping you achieve the success you want and deserve. In need of corporate or commercial legal services? Book a free, no-obligation consultation today and let’s discuss!

Employment Legislation: Key Updates You Need to Know

Posted on by Shona Wells

By Georgiana Delorme

Photo by Icons8 Team on Unsplash

I was chatting the other day to a commercial and insurance barrister. In comparing “notes” on our respective areas of law, he commented he felt he had it much easier, in that Employment law seems to constantly keep those who practice in it on their toes, with ever changing legislation and a stream of constant case law. I couldn’t agree more but that’s one of the many facets that I love about it; the continual learning and the application of new laws or case decisions to matters you’re working on.

With that it mind, I thought it was a ripe time to let our readers know about some legislative changes which have taken or will take place this year. These are set out in brief below:

The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023

The provisions aim to simplify the calculation of holiday entitlement for part-year and irregular hours workers. In TUPE <50 employees will be able to consult directly with employees rather than having to have worker representatives in place. Businesses won’t be obliged to maintain a record of worker’s daily working hours but instead will need to keep adequate records to demonstrate compliance with the Working Time Regulations.

Equality Act 2010(Amendments) Regulations 2023

The purpose of the Amendment Regulations 2023 is to reproduce in the Equality Act 2010 (EqA) certain interpretive effects of retained EU law which provide protection against discrimination, and which would otherwise have ceased to apply from the end of 2023 because of the Retained EU Law (Revocation and Reform) Act 2023. One such example is refining the definition of disability under the EqA to consider a person’s ability to engage in working life as a relevant factor in assessing “day to day activities”.

Employment Relations (Flexible Working) Act

Employees gain the right to make two flexible working requests within any 12 month period (previously one). The obligation on the employee to explain what effects the proposed change has on their employer and what solutions are available to mitigate these effects, is no longer required. Employers are now required to consult each employee if they are rejecting there flexible working request and need to reach a decision within two months instead of three.

The Carer’s Leave Act

This guarantees eligible employees the right to take one weeks’ leave per year to care for a dependent. To cover, spouse, civil partner, child, parent, or a person relying on the employee for care. This is a day one right.

The Neonatal Care (Leave and Pay) Act

This allows additional time off (up to 12 weeks) beyond the standard parental leave. Applicable from day one, it provides paid leave for parents when their baby is in neonatal care.

Employment (Allocation of Tips) Act 2023

This will protect the earnings of hospitality workers and employees. This act makes it illegal for businesses to withhold tips from employees. Employers must ensure fair tip allocation, prompt payment, and maintain clear written policies, such as a three year record of tip distribution.

National Minimum Wage

The largest ever increase to a minimum wage in cash terms (£11.44 an increase of £1.02) and will apply to all workers over 21 for the first time (previously over age 23)

Police, Crime, Sentencing and Courts Act 2022

This has come into force which means that criminal convictions become spent after a shorter time, reducing the period that individuals are legally required to declare them to their employers.

The Worker Protection (Amendment of Equality Act 2010)

Employers will be under a statutory duty to take reasonable steps to prevent sexual harassment in the workplace. If employer fail to take reasonable steps to prevent sex harassment, the Equality and Human Rights Commission can take enforcement steps, plus any successful tribunal claim will be subject to a compensation uplift of 25%.

Workers (Predictable Terms and Conditions) Act 2023

This introduces a new statutory right for workers (including agency workers) to request a more predictable working pattern. Can be requested once in a year and will broadly follow the current requests for flexible working process including reasons for employer to refuse request such a costs burden, detrimental impact on business or there being insufficient work during the periods the worker has asked for work.

June 2024

Georgiana is an experienced Employment Law solicitor at Tend Legal. She delivers clear, pragmatic legal advice and sustainable solutions in a friendly, no-nonsense manner.

If you need advice on any of the areas discussed above or anything else Employment Law related, don’t hesitate to get in touch. We are here to help!

Tend Legal, London

Climate Crisis – How can your business play its part in saving the planet?

Posted on by Shona Wells

We all know that the deadline for turning the tide on the climate crisis is fast approaching, but you may be wondering “what impact is my business alone going to be able to make?”. Well, if we stand any chance of reaching the Paris Agreement target of 1.5° global temperature rise above pre-industrial levels, then we need to be looking at a whole economy approach.

What does that mean in reality?

Photo by Luke White on Unsplash

Of course, the largest contributors to carbon emissions have got to take action to reduce their own emissions, however unless everyone takes some action, temperatures will continue to rise at potentially catastrophic levels. A whole economy approach means looking at a broad range of industries and at business of every size and at all levels of the supply chain.

Why am I talking to you about this anyway? What has a law firm got to do with climate change?

There are three key areas for carbon reduction:

  1. Direct emissions including direct emissions produced by your business such as factory emissions (in the case of manufacturing businesses) and emissions from company vehicles;
  2. Indirect emissions from purchased energy i.e. emissions produced by the gas and electricity that you buy;
  3. Indirect value chain emissions including emissions that are produced in other parts of your supply chain, such as by your suppliers, as well as emissions further down the chain. For example, transportation and distribution, use of products and end-of-life treatment of products sold.

One method of ensuring that you and your business are putting in place appropriate measures to tackle your carbon footprint is through the contracts that you enter.

Through examining your internal processes and policies alongside the agreements that you have in place with suppliers, distributors or even end users, you can start to make changes to reduce your carbon footprint.

What if I don’t have the time or resources to take on such an immense task?

Here at Tend Legal, we are pleased to be supporting the Chancery Lane Project – an organisation made up of more than 2,500 professionals in 113 countries around the world with a vision of producing effective, impactful contract clauses to enable solutions to climate change, in a way that is just and fair for everyone.

Whether you are a small business with limited resources wanting to take your first small steps towards change, or a larger organisation looking to implement a strict emissions reduction plan, there are plenty of ways in which your contracts and in turn, the way that you do business, can be adapted to make a difference.

If you’d like to learn more about how we can help you take the first steps towards climate-friendly contracting, feel free to get in touch.

Written by Jade Field

Tend Legal, London

Director’s Duties

Posted on by Shona Wells

What are your duties as a Director of your company?

Have you recently been appointed as a Director of a Company and you’re not entirely sure what you can and can’t do? We’ve put together this short blog to give you the low-down on your duties.

As a Director, you might have been appointed as an individual or as a corporate body. You might also be an Executive Director, with your details registered at Companies House and being involved in the day to day running of the company.  Alternatively, you might have been appointed as a non-Executive Director, providing only strategic input and steering clear of the daily operations.  Regardless of what status you hold in that respect, your legal responsibilities remain the same.

Photo by Joshua Rodriguez on Unsplash

In the UK, we have a few rules set out in law that give rise to obligations that Company Directors must comply with:

  • Your Company’s constitution

Be sure to follow your Company’s constitution and its articles of association. Your articles of association set out, amongst other things, how many Directors there will be, what their powers and duties are, and how they can go about making decisions. Directors participate in board meetings and are in charge of collectively making strategic decisions relating to the Company. If you’re ever unsure about anything, your company articles are always the first document to consult as there is often a chance you might be restricted in what you can do.

  • Promote the success of the Company

This goes without saying, of course. It’s inevitable that as a Director, you should be acting in the best interests of the Company. Though, it does beg the question, does this mean in the best interests of shareholders or the company as a whole, including employees? These are all important considerations and it’s important that Directors remain aligned with the goals of the wider Company, and not only the Shareholders.

  • Independent Judgement

As a Director, you should be the person controlling your decisions within the company. You might seek advice from third parties for matters, but this advice should not cloud your judgement. You should act independently at all times.

  • Exercise reasonable care, skill and diligence

Directors must carry out their roles with care and competence. This can be easily managed by ensuring that Directors have employment contracts setting out their express duty to carry out their job with reasonable skill and care.

To determine what might be deemed reasonable care and competence caselaw suggests a two part test:

               Objective test: What would a reasonable Director, who is carrying out his/her role, do?

               Subjective test: Has the Director fallen short of the standard expected of them, judged by                                          the expertise and knowledge they have?

It’s likely that the longer you have been a Director for your company, the more care, skill and competence will be expected of you in your role. Alternatively, if you have specific expertise in an area and you fall short of the standard expected of you whilst dealing with that particular job, you may be deemed to have not exercised reasonable care, skill and diligence.

  • Conflicts of interest

This obligation can be intertwined with the requirement to exercise independent judgement.

A company Director must avoid a situation in which there might be a direct or indirect conflict of interest. A good example of this would be appointing a Non-Executive Director who also sits as non-Executive Director on the boards of other similar companies. This kind of situation would give rise to a conflict of interest. Alternatively, personally benefiting from a transaction that your Company enters into could also be problematic. There may be other scenarios too, but it is important that the articles of association and your shareholders agreement address how the conflicts should be dealt with.

Likewise, you’ve got to make sure that apart from reasonable corporate hospitality, you don’t give rise to a conflict of interest by accepting any benefits from third parties because of your role as a Director, for example.

  • Compliance

As a Director, you have a lot of compliance obligations to keep on top of. You have to:

  1. Keep records of the company’s officers, people with significant control, office address etc
  2. Keep information relating to allotted shares or charges
  3. Get your filings in on time, including your confirmation statement and annual accounts.

The good news is that you don’t have to manage these legal responsibilities yourself. You can get help managing these from a lawyer or an accountant, but ultimately, it is your responsibility to stay compliant.

It’s important to get the roles and responsibilities of all your Directors recorded in writing by ensuring you have a set of Company articles and Directors’ agreements in place. That way everyone is clear on what to expect and that you’re doing your best to avoid any problems in the future, from the outset.

Written by Neelam Narshi

Tend Legal Limited

London

Consumer Law Update – Are you following fair consumer practices?

Posted on by Shona Wells

We’re in the game of drafting consumer contracts for our clients so it’s important that you (and we!) know what changes are planned for consumer law in the UK and how these changes might impact the way you do things.

Image by Prateek Katyal on Unsplash

The majority of consumer rights and protections for UK consumers can be found in the Consumer Rights Act 2015 and the principal enforcement body remains the Competition and Markets Authority (‘CMA’).

Earlier this year, the UK government announced a series of proposed measures to enhance the power of the CMA. Here are just some of the key things the CMA will be able to do:

  • Directly enforce consumer law, including the ability to fine companies up to 10% of their global turnover if they mistreat customers. There will no longer be a need to go through lengthy and costly court processes to enforce malpractices. Currently, if the court rules that a contract term is unfair, it is unenforceable, but the new powers will go further.
  • Tackling ‘subscription traps’ to make it easy for consumers to opt out of subscriptions they no longer want.
  • Take action against companies who post fake reviews – it’s ever too easy to place reliance on these.

What does this mean in practical terms?

In practice it could mean a whole host of measures you may need to take to ensure you follow fair consumer practices. Here are just a few possible examples:

  • Get your commercial contracts reviewed and get advice on whether your terms and conditions comply with consumer legislation.
  • Think about your products and/or services and how you are offering those to your customers. If you’re offering a subscription, you’ll need to make sure you aren’t ‘trapping’ your customers into sticking around! Make sure you provide clear information to your customers before they subscribe, send out clear reminders before a contract auto-renews or before a low-cost introductory offer or free trial ends, for example.
  • Engaging in any activities that offer fake reviews to your customers are strictly prohibited. This could, in theory, even include fake review or testimonials on your website, for example, or elsewhere. It could go further, to include fake reviews on social media.

The CMA’s new powers aren’t in force yet and it doesn’t look like there is a definitive date yet as to when that will happen, but it’s an important area of interest for a lot of our clients, so we’ll be keeping a close eye on this.

Written by Neelam Narshi

Tend Legal, London

National Living Wage Update

Posted on by Shona Wells

In August this year, the government named and shamed 191 employers who had underpaid workers between 2011 and 2018. Some of those included major household names, with the likes of John Lewis being named amongst the offenders. Collectively, the companies owed £2.1 million to over 34,000 workers and were ordered to pay back what they owed. They were penalised too, being made to pay an additional £3.2 million in fines.

The issues don’t stop there, though. According to HMRC, just less than half of UK companies wrongly deducted pay from workers’ wages. The deductions were made for things like uniforms and other expenses. 30% had failed to pay overtime and 19% paid apprentices the incorrect rate.

Employers are falling short.

You’ll have seen the recent news in the budget that the minimum wage for 23 year olds is set to rise from £8.91 an hour to £9.50 an hour from April 1 2022. This rise means a full-time worker will get £1,074 extra a year before tax and just under £20,000 salary a year on a 40-hour week. There are similar increases planned for other age groups too:

  • National Minimum Wage for those aged 21-22: From £8.36 to £9.18
  • National Minimum Wage for 18 to 20-year-olds: From £6.56 to £6.83
  • National Minimum Wage for under-18s: From £4.62 to £4.81
  • The Apprentice Rate: From £4.30 to £4.81

John Lewis have previously said that the issue with pay related to pay averaging, which spreads workers’ pay evenly over the year. This meant that those on hourly rates sometimes saw their pay drop below the national minimum wage when they worked extra hours. This was technically breaking the rules.

Argos were caught ‘wage-dodging’ when they asked employees to attend briefings before their shifts and stay behind after their shifts to get their bags checked. This additional time should have been taken into account.

Tesco, another offender blamed their breach on a ‘technical issue’ which they claim took place in 2017, resulting in some workers being paid less than the national minimum wage.

The list goes on.

What’s the difference between the national minimum wage and the national living wage?

This one can cause a bit of confusion. The difference isn’t super clear. Here’s how the Government define those:

The national living wage is the minimum pay per hour almost all works are entitled to. The National Living Wage is higher than the National Minimum Wage – workers get it if they’re over 23.

The national minimum wage that is payable to an employee depends on their age and if they’re an apprentice.

So, if you’re over 23, it’s the minimum national living wage you’ll be interested in.

If you’re an employee, you can check if you’re getting paid the correct amount by clicking here: https://www.gov.uk/am-i-getting-minimum-wage

If you’re an employer, you can check the same here: https://www.gov.uk/minimum-wage-calculator-employers

Is there any way you can bypass the legal minimum wages as an employer?

No. Even if you get your employee to agree to accepting a lower wage than that they are legally entitled, you are still breaking the law.

Our recommendations

As an employer, it’s your responsibility to review the measures you have in place to ensure you are not paying staff less than what they are legally entitled to.

It’s important that employers don’t get caught out. Just because the hourly rate looks more than the minimum on paper, it doesn’t necessarily mean this is the case i.e., if you’re also offering pension contribution schemes etc.

Keep on top of your ‘age review’ practices. Are any employees approaching the age of 23? If so, this should trigger an automatic update on your payroll.

It’s also an employer’s responsibility to keep records proving that they are paying the national minimum wage. Under certain circumstances, these records should be kept for at least 6 years. Along with that, it is recommended that employers keep a clear log of any agreements they have with employees, including details of working hours, pay and conditions etc. If an employer thinks an employee is not entitled to the minimum wage, they must have documents that show why a worker is not entitled.

HMRC can carry out spot checks at any time and can ask to see any records.

In short, keep your practices under review and keep records. Meet with your HR team regularly (if you have one), to make sure these practices are adopted. Besides, you have no choice.

Tend Legal Limited, London

Is it time your workplace levelled up with a menopause support policy?

Posted on by Shona Wells
person in red sweater holding babys hand
Photo by Hannah Busing on Unsplash

It’s something we’re not used to talking about but this month marks World Menopause Month and there seems to be something of a seismic shift, with the topic currently flooding social media feeds, company agendas and headlines alike.

Employers are paying attention and it’s about time. More than ever, women feel comfortable sharing their experiences but there are so many who do not – struggling in silence.

The most common symptoms experienced by women can include but are not limited to insomnia, fatigue, loss of confidence and hot flushes. To appreciate the scale of the problem and to give the situation some context, here are a few facts:

  • 70% of women are now in work in the UK.
  • Of those, 3.5 million are over the age of 50, with many women working beyond retirement age.
  • You don’t have to be aged 50+ to experience menopause. Some women struggle with symptoms much earlier.
  • A lot of the symptoms of menopause can’t easily be linked to menopause itself. Women are often mis-diagnosed with depression, anxiety etc instead. There is a fine line.

As we live longer and more and more women choose to work beyond retirement, it’s likely that employers will need to better understand how to manage menopause in the workplace.

According to a survey of women conducted by the British Medical Association in 2020:

  • 93% of respondents had experienced menopause symptoms, with 65% of those having both physical and mental symptoms.
  • 90% of respondents said that these symptoms had impacted their working lives, with 38% saying that the impact was significant.
  • 36% of respondents had made changes to their working lives as a result of menopause.
  • 38% wanted to make changes to their working lives as a result of menopause but said they were not able to.
  • 16% had discussed menopause symptoms with their manager.
  • 47% wanted to discuss their symptoms with their manager but did not feel comfortable doing so.
  • 42% felt that their job performance was adversely affected.

The impact on women and their job performance is clear but what can employers do to support women during the menopause? Here are a few ideas:

  • The key here really is to agree workplace policies that deal with health and safety, sickness absence, flexible working and performance management, taking into account the impact of menopausal symptoms.
  • Speak to your team to better understand any symptoms they might be experiencing and tailor your policies accordingly. Don’t be nervous about opening up that dialogue –  you might be surprised at how willing most women are to share what they’re going through, provided they know you care and that their opinions matter.
  • Keep working conditions under regular review.
  • Provide support for mental health and wellbeing. Menopause can impact your mental health and physical health.
  • Develop an inclusive culture – including actions to address sexist and ageist behaviours at work that prevent women speaking openly about menopause and asking for help.

Menopause is no longer a taboo. More and more employers are welcoming specific menopause policies. Isn’t it about time you considered one too?

Tend Legal Limited, London