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?
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:
Direct emissions including direct emissions produced by your business such as factory emissions (in the case of manufacturing businesses) and emissions from company vehicles;
Indirect emissions from purchased energy i.e. emissions produced by the gas and electricity that you buy;
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.
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.
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.
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.
As a Director, you have a lot of compliance obligations to keep on top of. You have to:
Keep records of the company’s officers, people with significant control, office address etc
Keep information relating to allotted shares or charges
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.
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.
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.
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.
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.
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.
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?