Vicki Mitman, a solicitor in the firm’s Franchising team, recently attended the bfa roundtable discussions in Warwick. The roundtable discussions included:
Franchisee profiling
Local marketing
Monitoring franchisee performance
Ongoing training and support
Recruiting the right franchisees
Development of online tools
Each roundtable discussion was chaired by a member of the bfa who introduced the topic and discussed their personal experiences. Members of each group were encouraged to share their knowledge and experiences of a particular issue and could ask questions to gain insight and different approaches from other bfa members and affiliates. The topics discussed created lots of interest and produced lively discussions. The break-out groups included both young and mature franchisors and affiliated consultants, accountants, bankers and lawyers.
Leathes Prior is an affiliate member of the bfa and has specialised in franchising for over 30 years.
Norwich International and NCP have worked closely together to implement changes within the short stay car park, to make life easier and maintain safety of customers, staff and visitors.
A new specific ‘drop off’ area has been created within the short stay car park for customers – both passengers and those bringing people and picking them up from the airport, to deter drivers from stopping in unauthorised areas and to also help ease congestion at busy times within the car park. The first 10 minutes are free of charge, with standard rates applying thereafter.
The new area is clearly signed; anyone coming to the airport should look carefully for the signs indicating where they should go, to either the drop off area, short stay or long stay car parking.
Mark Kraft, business manager at NCP commented: “NCP is always looking at ways to improve our customer experience when using our car parks, and it became very clear from customer feedback that a drop off lane for passengers arriving at the airport would be really helpful. This way we reduce congestion points for everyone, and make the process as seamless as possible.”
Employers using zero hours contracts should be aware of a recent decision of the Employment Appeal Tribunal (EAT), in which it was held that individuals engaged under such a contract had continuity of employment. Professional support lawyer Elizabeth Stevens reports.
This case concerned a group of care workers, employed to provide 24 hour care to a severely disabled woman. The contract for the provision of the care service between their employer, Carewatch Care Services Ltd (Carewatch), and the local primary care trust was terminated and a new contract was entered into with Pulse Healthcare Limited (Pulse). The individuals who were engaged to provide the care claimed that their employment transferred to Pulse under the provisions of TUPE.
Pulse denied that the claimants were employees on the basis that they were engaged under a contract headed “Zero Hours Contract Agreement”, which included a provision stating that they were free to work for other employers. Pulse therefore claimed that the ‘mutuality of obligation’ necessary for an employment relationship did not exist. If the claimants were not employees, they would not be covered by the provisions of TUPE.
The employment tribunal disagreed that this reflected the reality of the situation, highlighting the fact that the claimants had worked fixed hours on a regular basis over a number of years. The contract made repeated references to “employment”, and included many of the usual provisions of an employment contract including annual leave, sickness, termination and pension. The individuals were provided with a uniform and were paid on a PAYE basis. The employment tribunal therefore concluded that the individuals were employees, with continuity of employment. Pulse appealed the tribunal’s decision.
The EAT has upheld the tribunal’s decision on the employment status of the claimants. The judge highlighted the evidence demonstrating the critical nature of the care package provided by the claimants and the importance of maintaining an established team of carers for the client. In the judge’s view, it was fanciful to suppose that Carewatch relied on ad hoc arrangements in the provision of such a package. The EAT considered that the tribunal had been justified in its conclusion that the “Zero Hours Contract Agreement” did not reflect the true agreement between the parties.
Comment
This decision reflects the willingness of the courts and tribunals, particularly since the decision of the Supreme Court in Autoclenz v Belcher (see our report), to look beyond the terms of the written agreement to assess the true nature of the relationship between the parties.
It seems clear from the evidence in this case that the contract was not drafted in terms properly consistent with a genuine zero-hours arrangement, and that the reality of the arrangement was consistent with an employment relationship.
The case will now return to the employment tribunal to determine whether the claimants’ employment transferred to Pulse under TUPE.
In practice, the majority of zero-hours contracts will establish an employment relationship. With careful drafting, and depending on the frequency an individual is engaged under such a contract, it might be possible to prevent continuity of employment arising in between each assignment under the contract. However, employers should be very cautious in relying on such contracts if they do not reflect the reality of the arrangement between the parties.
Emma Alfieri reports on the Government’s plans for a reshaped child maintenance system.
The Government has unveiled detailed plans for a reshaped child maintenance system in Great Britain.
Ministers believe the current system, which costs £0.5bn a year, and focuses purely on collecting and transferring money has proved inefficient and has damaged separated families.
The Government wants to reshape the system so it is focused on supporting families to make their own arrangements which are in the best interests of the children involved.
In order to achieve this, it is proposed that £20m is invested to provide a network of support services to help separated families. The policy document; Supporting Separated Families; Securing Children’s Futures sets out the key improvements.
For the first time, all parents considering applying for child maintenance payments via the state will be invited to discuss their situation and consider possible alternatives. Where appropriate, it will signpost them to community-based support services.
The new statutory maintenance scheme, to be known as the Child Maintenance Service, will take cases where parents cannot make their own arrangements. It is proposed, as well as a £20 application fee, the parent paying maintenance will pay an additional collection fee of 20% on top of each assessed payment.
The parent receiving maintenance will have 7% deducted from each assessed payment. But parents who fail to pay will face additional penalty charges reflecting the cost of enforcement action. For example, it is proposed that a Liability Order from the courts will carry a £300 surcharge, while £200 will be charged if money has to be removed from their bank account via a lump sum Deduction Order.
Both parents will avoid collection fees if the paying parent opts to pay the other directly without use of the collection service. This is designed to build trust between separated couples.
The new Child Maintenance Service will continue to be heavily subsidised but will be faster and fairer and better for parents.
Payments will usually be based on the paying parent’s latest tax-year gross income, reported by HM Revenue & Customs. Use of tax data means assessments will depend less on what parents choose to disclose about their income. Maintenance calculations will be reviewed annually to ensure they remain fair accurate and up to date.
Emma Alfieri, from our family team comments: “This in encouraging news. The additional support for parents to work together can only be useful and the new system should encourage reluctant parents to take their responsibilities seriously”.
For further information please contact Steeles Law’s family team.
A recent Court of Appeal decision highlights the increasingly far reaching liability of employers for the actions of their employees.
Judgment in JGE v The Trustees of the Portsmouth Roman Catholic Diocesan Trust was handed down on 12 July 2012. The question before the court was whether the church should be responsible for paying damages to a child who was abused by the priest at the church in the 70’s. The court said yes, the (now grown up) victim should be compensated by the church.
To many, it would seem intuitive that a victim of child abuse should be able to recover compensation from the wrongdoing organisation. However, the case actually threw up two key issues, namely: can sexual abuse ever fall within the course of the priest’s duties, and should the church be liable for the priest’s actions?
The first question was relatively straightforward to answer, thanks to a recent decision of the higher court. To be clear, an employer is not merely responsible for what its employees do under direct instruction from the employer. An employer is responsible for all actions which the employee takes which have a sufficiently close connection to the employee’s employment.
So in a 2001 case, Lister v Hesley Hall, the House of Lords confirmed that if an employee was entrusted to look after children, the employer would be liable for sexual abuse by the employee when he was supposed to be looking after them, and the victims could obtain damages from the employer. This was despite sexual abuse clearly being outside of the employee’s duties; his actions were sufficiently closely connected to his employment to pin liability on his employer.
So, in JGE v The Trustees of the Portsmouth Roman Catholic Diocesan Trust, a victim of sexual abuse at the hands of the priest at the church was, in principle, able to claim damages against the bishop to whom the priest answered.
However, the church employed a further argument to avoid liability. The court took expert advice from Roman Catholic academics and found that the priest was not actually an employee (their relationship was intended to be determined by canon law, not civil law, so no employment relationship arose). The court therefore had to decide whether they could extend liability to a situation which was “akin to employment”.
In JGE, the Court of Appeal explicitly said “I confess I have found this difficult to decide”. Although the legal framework is a very real constraint on the court, the judges must have felt huge reluctance to find that a victim of child abuse should not be able to recover damages, particularly when even the barrister for the church described the priest’s actions as “abhorrent”, and rightly too.
The court therefore confirmed that liability in relationships “akin to employment” can be found under specific circumstances, and indeed found such liability in this situation. So, even though the priest was specifically held to not be an employee, the church could still be liable for his actions because he was in a position which was “akin to employment”; the key question being one of control.
This decision does, of course, have huge implications for a modern economy. A business (or, indeed, charitable organisation) can no longer absolve itself of the wrongdoings of another simply because that other is not an employee. A business must ensure that all individuals over whom they exercise sufficient control take proper care in the exercise of their duties (and should probably obtain appropriate insurance), even if the business does not employ them.
Conversely, an injured victim may now be able to obtain compensation from the organisation which had actual control of a situation, and the organisation which might more properly be expected to be insured.
The church has been refused permission to appeal to the Supreme Court, but specifically because that court is due to give judgment in a similar case, Various Claimants v The Catholic Child Welfare Society and the Institute of Brothers of the Christian Schools & ors, very soon (the hearing was on 23 July 2012). That case may provide further clarity.
It may surprise some readers to learn that the above cases have almost no bearing whatsoever on employment law and the rights and obligations as between employers and employees. This fact serves only to show how complex the law of both employment and personal injury is, and proper advice should be sought if in any doubt whatsoever.
With injunctions being served by Facebook, and the first “Twibel” case in the UK (libel duty comments made by Twitter) being won, a recent case regarding contracts made by email highlights how the law is attempting to keep pace with our ever changing forms of media.
Golden Ocean case
The case of Golden Ocean came to the Court of Appeal earlier this year. Golden Ocean claimed that a charterer had failed to honour its obligations to take delivery of the vessel under a guarantee worth in excess of $50 million. The defendants claimed there was no contract or guarantee in existence despite oral communication and an extensive chain of emails. Relying on section 4 of the Statute of Frauds 1677 (which requires that certain types of contracts must be recorded in writing with sufficient detail in order to be legally binding), the defendants argued that the guarantee was incomplete as it was contained over a number of emails which could not be patched together sufficiently, the names could not constitute signatures and that the final email referred to a formal contract being produced which never materialised.
The Court of Appeal, however, agreed with the claimants and the High Court, confirming that the string of negotiated emails promptly signed, albeit even if informally, such as by first name, initials or nickname, would constitute an enforceable guarantee. The key was that the parties intended to be bound by the arrangement irrespective of the fact that the formal document which was expected to be drafted was never actually produced.
This judgment is, perhaps, not all that controversial, as it has long been established that contracts can be formed over email and through other means of instantaneous communication. However, what is clear from Golden Ocean is that if parties show intent to be legally bound to one another, they will be. Stating “Subject to Contract” on the top of all communications and draft documentation can be a useful way of clearly indicating that you do not want the content to be legally binding.
Looking ahead
It is increasingly clear that the law needs to adapt to keep up with the ever moving world of media and social networking. It is expected that the Parliamentary Joint Committee on Privacy Injunctions will recommend that social networks, such as Facebook and Twitter, be subject to injunctions and in doing so force sights to remove libelous comments. The same Committee may also request that Google censors search results in order to block such material from being accessed.
The ways in which businesses choose to communicate with each other are changing and as they do we need to look to see how the law applies to new forms of media. What Golden Ocean shows us is that laws that are centuries old can be applied to the media reality of today. Whilst the method may be different, the same rules can still apply – statements made through new media will be taken as seriously as those made by traditional forms.
Some advice
In conclusion here are three top tips to bear in mind when you are negotiating a legal arrangement:
1.Complete a formal agreement: if you do wish to formally document an arrangement then you should take it upon yourself to draft (or indeed have a suitably qualified lawyer draft) the appropriate agreement and not start trading with a counter-party until such agreement is finalised.
2.“Subject to Contract”: clearly write the term “subject to contract” on the top of all communications and draft documentation which you do not wish to be binding.
3.Don’t be fooled by modern media: do not be naive and think that by using email, Twitter, Facebook and various other forms of modern media that you are somehow out of the reach of the law.
Leathes Prior’s Sports Team has continued to develop its expertise in assisting football clubs to survive in the difficult economic climate by advising Welling United of the Blue Square South division on its successful conversion to a Community Interest Company. See www.wellingunited.com for further details.
Full Contact’s Dan Chapman, assisted by Leathes Prior corporate lawyer Richard Guthrie, have advised Welling United throughout on their transfer from an unincorporated entity to a limited company which also has CIC status. Believed to be one of the first football clubs to have achieved such status, Welling may now become an example for other clubs to follow.
Richard Guthrie commented: “There is a growing trend for companies who have a real focus on supporting and being supported by their local community to seek CIC status, which is a relatively recent vehicle introduced in 2005 under the Companies (Audit, Investigation and Community Enterprise) Act 2004. Leathes Prior is able to advise companies in all sectors, sporting or otherwise, of the potential benefits of a conversion, taking into account other options such as CASC and charitable status”.
Dan Chapman added: “In an era where, quite rightly, more football clubs are considering passing some or all of their control to their fans, the community, supporters trusts and other such stakeholders it is vital that clubs take proper advice as to the best way to structure themselves. The CIC status was right for Welling United for a number of reasons, and we very much hope it is the start of a new era for this club which already does a lot for its local community. In a time when so many are commenting on the riches which are at play in the upper echelons of the football game, it is rewarding to be involved also in the real heartbeat of the game.”
One of the most notable features of a CIC is that it must operate at all times for the benefit of the community, and it is protected by an ‘asset lock’ which ensures (in the case of a football club) that decisions cannot ever be taken for private gain.
We are delighted to announce that complimentary room hire will be offered to all customers looking to hold a three-course dinner with us at Norwich City Football Club*. Choose from one of our stylish function rooms for your next awards dinner, anniversary party or wedding and our experienced Event Co-ordinators will work with you to find a menu that’s right for you.
To take advantage of this fantastic offer call Canary Catering now on 01603 218704 or e-mail [email protected].
*This offer excludes bookings taking place throughout the month of December and minimum numbers will apply.
Due to expansion and emerging market opportunities CTS Ltd are looking for a dynamic business focussed individual to become CEO and to join the Directors and Management team. The role will include the implementation of the company’s strategic plan to complete business objectives and continue future growth.
The right candidate will receive salary and equity incentives in line with company targets. Please apply in writing with a current CV to
Gavin Springall company Director 1st Floor Phoenix House 3 White Lodge Business Park Hall Road, Norwich, Norfolk. NR4 6DG
Ed Savory, an Associate in Leathes Prior’s Franchising Team, attended the bfa London & South East Regional Forum. Each quarter, franchisors and advisers in the Franchise Industry meet to discuss the current “hot topics” in the market.
The following issues were discussed:
Updating franchise documentation – how, when & why? It is important to keep documentation under constant review and this does not just mean the Franchise Agreement. In particular, think about marketing materials, website, Franchise Information Memorandum (FIM) and Manual. The risk for franchisors is being sued by a franchisee for over selling the business proposition. This is not helped by any provisions of the Franchise Agreement which are out of date being unenforceable.
Franchisors would be well advised to appoint one person to be responsible for reviewing and updating documentation and, of course, advice from their solicitors should be at hand.
Protection of franchisor Intellectual Property (IP) First of all a reminder was given of exactly what IP is – essentially the brand and the unique franchised business system, all know how as set out in the operations manual. The registration of trademark(s) is an important initial step – remember that the correct class(es) should be applied in order to make the registration fully effective. If your business used a designer (or some other third party) to create the brand then you should ensure that all rights in the design rights have been duly assigned. The franchisee’s employment contracts should also contain relevant restrictions.
Franchisee improvements – embrace or dismiss? Franchise success is about both consistency and constant development. Whilst all franchisees must adhere to the system if any of them have any suggestions for improvements then these should be embraced. Furthermore, the proposing franchisee can act as a guinea pig for trying out a certain idea before full roll-out across the network.
How to educate the general public about franchising The bfa is looking closely at how to educate the general public about franchising – that is business format franchising. The next bfa Chairman (Sir Bernard Ingham retired this year) should be a generally recognisable figurehead. Franchisee membership should also assist.
Franchisee recruitment – what are franchisors experiencing? The evolution of online marketing has meant that most franchises are now using a “mix of media” in order to promote sales both in terms of new franchisees and business generally. The current market trend is that the time taken to recruit is slowing as prospective franchisees are more cautious about taking the leap.
bfa Natwest survey The bfa survey (as previously reported on) shows that the franchising industry in the UK is stable and growing. 80% of franchisees are generally happy, 929 franchises in operation in the UK with franchisees in 40,000 locations with a total turnover of £13.5bn.
Section 73 of the Charities Act 2006 (CA 2006) requires the Minister for the Cabinet Office to appoint a person to review the operation of CA 2006 within five years of its commencement. Lord Hodgson of Astley Abbotts was appointed as the reviewer and on 16 July 2012 his report, Trusted and Independent: Giving charity back to charities, was published and presented to Parliament. The 159 page report contains over of 100 detailed recommendations.
Insofar as disposals – the sale, leasing or mortgaging – of land or property by charities are concerned, the report has concluded that the current regime is disproportionate. It recommends complete deregulation, leaving charity trustees to instead act under their general duty of care and with reference to Charity Commission guidance. However, sensibly, it has also recommended that charities continue to obtain the Charity Commission’s consent for the sale or leasing of charity land and the granting mortgages and other charges to “connected persons”.
While most practitioners will agree that the current restrictions on disposing of charity land and mortgaging can be cumbersome and add unnecessary time delays and costs to transactions, Lord Hodgson’s proposal to entirely deregulate these areas is a little surprising. Deregulation may give practitioners freedom to give more appropriate and proportionate advice on charity land transactions, but it would also scrap rules that help to reinforce the duty of charity trustees to make properly informed decisions before committing to transactions that are often vital to their charity’s activities.
It remains to be seen which of Lord Hodgson’s recommendations are implemented and how quickly, but watch this space.