Cheyney Goulding

Cheyney Goulding Solicitors

t: 01483 56 76 76   e: legal@cheyneygoulding.co.uk

Administrator

SUPREME COURT QUASHES THE EMPLOYMENT TRIBUNAL AND EMPLOYMENT APPEAL TRIBUNAL FEES ORDER 2013

by

The Supreme Court ruled on the 26th July 2017 that the Government’s employment tribunal fees are “illegal” and preventing people access to justice.

The Supreme Court did not rule against the fees themselves, rather that they should be set at a level that everyone can reasonably afford. Access to justice will be all the more important when it comes to enforcing rights that may be at risk after Brexit

Employment tribunal fees were originally introduced in 2013 with the intention to cut out malicious and weak cases. To bring a claim it was costing claimants up to £1200 in fees.

Following the introduction of the fees four years ago, a government review found the number of cases taken to employment tribunals had fallen by 70%.

Cases sent to employment tribunals

Cases sent to employment tribunals

Source: Ministry of Justice

Unison, the UK’s largest trade union, brought the claim arguing that the high fees discriminated against workers.

The Supreme Court said: “The question whether fees effectively prevent access to justice must be decided according to the likely impact of the fees on behaviour in the real world.”

In their ruling, the court said: “A significant number of people have found the fees unaffordable.”

Unison general secretary Dave Prentis said: “It’s a major victory for employees everywhere. Unison took the case on behalf of anyone who’s ever been wronged at work, or who might be in future. Unscrupulous employers no longer have the upper hand.”

“These unfair fees have let law-breaking bosses off the hook these past four years, and left badly treated staff with no choice but to put up or shut up.”

The Supreme Court did not rule against the fees themselves, rather that they should be set at a level that everyone can reasonably afford. Access to justice will be all the more important when it comes to enforcing rights that may be at risk after Brexit.

What does this mean for employers?

–          Increase in employment tribunal claims:

As this is a widely publicised topic the risk of employers facing more employment tribunal will increase immediately. Employers will need to take extra care when dealing with HR/employment issues, we advise to react appropriately and quickly when complaints are initially raised.

–          Potential Legal challenges:

With the decision that employment fees are unlawful. Previous claimants that could not claim previously may attempt to bring claims now. Usually there is a time limit of employment cases however there is an argument that claimants could not pursue the claim at the time, therefore preventing them from justice. The Supreme Court did not deal with this issue, inevitably further cases will emerge.

–          Delays in the employment tribunal system:

The tribunal system will now face two issues. First, it will have to adapt the current system to a new system without the requirement of fees plus dealing with refunds from unlawful cases. Secondly, it will have to accommodate for an influx of claims. This will likely slow up the process and cause delays. Currently, the online filing service to bring a claim has been suspended whilst being amended and claims can only be filed in hard copy.

‘DEPENDENT CONTRACTOR’ STATUS PROPOSED FOR THE GIG ECONOMY BY TAYLOR REVIEW

by

Anyone who deals with employment law and employment practices knows that the landscape of employment status is filled with potential traps and minefields with now the waters further muddied by a new addition. “Dependent Contractor” is the new work status proposal as reported on 11 July 2017.

The Taylor review was established to review modern day working practices and the current status of “worker” may be replaced by “dependent contractor” in an effort to distinguish the genuine self-employed from others.

The proposal is for more weight to be given to the concept of control when determining employment status as opposed to the concept of substitution or whether a worker can nominate somebody else to do the job for them.

Dependent contractors are most at risk of being taken advantage of by businesses and therefore more protection should be afforded to them such as being paid 1.2 times the national minimum wage. Also proposed is that if cases are to establish the employment status, then a mechanism could be put in place to prevent having to pay employment tribunal fees. Further, as well as a proposed name and shame list to be established for repeat employer offenders, those on zero hours’ contracts for more than 12 months can request fixed hours from their employers that better reflect the hours worked.

The review came about due to high profile Employment Tribunal cases from workers at Uber in October 2016 (reported here in an earlier briefing) where their status was established as being a worker rather than self-employed and in January 2017, CitySprint (cycle couriers) had a courier classified as a worker, entitling her to holiday pay and the national living wage and was not self-employed as argued by her employer.

There will no doubt be further news on the proposed work status changes in the coming months as further cases reach court with workers from DPD couriers and Deliveroo asking the courts to decide on their work status which may further change the employment landscape and encourage more companies to review their practices.

PILOT SCHEME TO CAP COSTS AT £80K

by

Pilot scheme to cap costs at £80k

Civil claims costs have always been scrutinised and measured on the proportionality principle and now there is a proposed scheme of levelling fixed costs for civil claims. Lord Justice Jackson is finalising his report on the capping of fixed recoverable costs for claims up to the value of £250k and has proposed a trial period for assessing the scheme. The trial period was to have started in May but had been delayed due to the election and now is due to start at any time.

Proposals for the capped stages

Costs would be capped at £10k for pre-action work, £7k for particulars of claim and £7k for defence and counterclaim.
Parties can claim up to £6k for a reply and defence to counterclaims
Case management conference will be capped at £6k
Disclosure will be capped at £6k
Witness statements will be capped at £8k
Expert reports will be capped at £10k
Trial and judgement costs limited to £20k
Overall cap of the pilot scheme trial period is set at £80k

Where will the pilot scheme take place?

Certain specialist courts have been selected. London Mercantile Court, three courts each in Manchester District Registry and Leeds District Registry and any cases where the trial will go beyond two days or where the value is more than £250k are excluded.The pilot scheme will be monitored by academics and will be open to new cases for two years.

The pilot committee all agree that there should be a streamlined court procedure, based around the Shorter Trial Scheme. Proposed amendments to court procedure would include a list of issues being reviewed at the claims management conference, including disclosure, limits on fact and expert evidence and trial dates would be fixed within eight months of the CMC.

The scheme is voluntary and both parties in litigation need to agree to participate.

Proposals for pilot scheme pre-action process

Response to letter of claim within 14 days
Particulars of claim and defences with counterclaims must not exceed 20 pages
Other statements of case must not go beyond 15 pages
Costs budgeting will not apply to cases in the capped costs list with the court instead making a summary assessment of costs

There will no doubt be further news on the proposed costs changes on the litigation landscape as the scheme may be extended to other courts.

IMMIGRATION LAW UPDATE

by

A number of changes to the Immigration Rules came into effect on 24 November 2016, with further changes coming into force in April 2017.  Some of the key changes which took effect in November 2016 are as follows:

  • The Tier 2 (General) minimum salary threshold for experienced workers has increased to £25,000 for the majority.  This will not however apply to any workers sponsored before 24thNovember 2016 who apply to extend their Tier 2 (General) visa.  It will also not apply to nurses, medical radiographers, paramedics and secondary school teachers in certain subjects (including mathematics, physics, chemistry and computer science) until July 2019.
  • The Tier 2 (Intra Company Transfer) minimum salary for short-term staff has increased to £30,000, while the minimum salary for graduate trainees was reduced to £23,000 and the number of places a sponsor can use has increased from five to 20 a year.
  • The Tier 2 (Intra Company Transfer) skills transfer sub-category has closed to new applicants.
  • The 28 day grace period to file an application for further leave to remain after leave has expired has been reduced to 14 days and any application will be refused unless there are exceptional circumstances.

The main change introduced in April 2017 is that, from 6 April 2017, an immigration skills surcharge is payable by sponsors in respect of each skilled migrant they sponsor under the Tier 2 (General) and Tier 2 (Intra-company Transfer) categories.  Failure to pay means that the Tier 2 application will be refused.  The charge applies to the sponsor and not the individual.  Therefore if the charge has been paid by a sponsor in relation to an individual who subsequently seeks to change sponsor, the new sponsor will also be required to pay the charge.

There are a number of exemptions where the charge is not payable, including:

  • In respect of certain graduate trainees, those in certain PhD level occupations and those seeking to vary existing leave in the UK as a student.
  • Where a skilled worker has leave to remain in the UK as a skilled worker at the time the regulations came into force.
  • When a sponsor assigns a certificate of sponsorship to a worker who was already in the UK as a skilled worker at the time the regulations came into force and subsequently seeks to extend or vary their leave, whether by changing employer or otherwise.

A summary of some of the other changes that were implemented in April 2017 are:

  • A further increase of the minimum salary threshold for experienced workers in the Tier 2 (General) category (to £30,000).  The minimum for new entrants remains the same (£20,800 per year).  The minimum for high earners (where there is an exemption from conducting a resident labour market test as part of the application process) will increase to £159,600 per year.
  • The Tier 2 (Intra-company Transfer) Short Term Staff category has closed to new applicants.
  • The requirement for an intra-company transferee to work for a related overseas company for a year no longer applies to those earning £73,900 or more a year.
  • The salary requirement for intra-company transferees wishing to extend their visa for up to 9 years has been reduced to £120,000.
  • Tier 2 (General) applicants for some roles in the education, health and social care sectors must provide criminal record certificates (as must any adult dependents).

The current exemption from the Immigration Health Surcharge for Tier 2 (Intra-Company Transfer) migrants has ceased, so the obligation to pay the surcharge (of £200 per year of leave) now extends to this subcategory.

INCREASE IN PROBATE REGISTRY FEES – WHAT DOES THIS MEAN?

by

UPDATE – The MOJ have on the 21st April 2017, scrapped the proposed increase in probate fees. Whether this remains the case after the election is still to  be decided. 

The MOJ have recently announced a proposed increase in probate fees, despite strong objections from the legal profession.

The new proposed fees are to be based on the value of the estate left by an individual in their will, and will be set out in the following sliding scale:

Estate Value                                                      Proposed Fee

£50,000                                                                £0

£50k- 300k                                                           £300

£300k -500k                                                        £1,000

£500k- 1 million                                                 £4,000

£1m- 1.6m                                                           £8,000

£1.6m – 2m                                                         £12,000

£2m +                                                                    £20,000

The current fees are £215 or £155 for those applying through a solicitor.

It has been argued that the new sliding scale system is fairer, with the lower value estates being removed entirely from paying any probate fees. However with no set implementation date, solicitors and individuals alike who are dealing with high value estates, will likely be looking to ensure that all applications are submitted before the relevant date in order to avoid the hike in fees.

Solicitors with outstanding probate applications, will also need to ensure that there is no delay on their part in filing the relevant application, in order to warrant that no allegations of negligence arise.

FIRST CASE UNDER THE INHERITANCE (PROVISION FOR FAMILY AND DEPENDANTS) ACT 1975 (IPFDA) TO REACH THE HIGHEST COURT

by

In March 2017 the Supreme Court handed down judgment in Ilott v The Blue Cross and Others in the first case under the Inheritance (Provision for Family and Dependants) Act 1975 (IPFDA)  to reach the highest court.

This was an appeal that arose out of a claim for reasonable financial provision under IPFDA brought against the estate of Mrs Jackson by her daughter Mrs Ilott. The pair had been estranged for the majority of the 26 years before Mrs Jackson’s death in 2004. The estrangement began when the daughter left home to live with her boyfriend, now husband when she was 17. Mrs Ilott has lived independently of her mother with her husband and five children but in challenging financial circumstances and receiving benefits of an annual income of £20,000.

Mrs Jackson did her last will in 2002 bequeathing the majority of her estate to a number of animal charities and made no provision for her daughter. Even in 1984 Mrs Jackson had made no provision for her daughter in her will and Mrs Ilott knew this and had no expectation of benefit from the estate.

The District Judge found that Mrs Jackson’s will did not make any reasonable provision for Mrs Ilott and awarded her £50,000. The charities who were beneficiaries in the will challenged the finding that there was any lack of reasonable provision but that challenge failed and the dispute has proceeded on the quantum awarded to Mrs Ilott.

In the Court of Appeal, the Judges decided that the District Judge had erred on two points in his calculation:

  1. Initially he held the award should be limited in light of the long estrangement and lack of expectation of benefit but did not identify what the awared would have been without these factors and the reduction attributable to them.
  2. He made his award without knowing what the effect would be on Mrs Ilott’s benefits, some of which would be means-tested and would not be payable once Mrs Ilott’s savings were over £16,000

The Court of Appeal re-evaluated the claim and awarded Mrs Ilott £143,000 to buy her house and an option to receive £20,000 in one or more instalments to prevent the awards affecting Mrs Ilott’s benefits’ entitlement.

Judgment of the Supreme Court

Overturning the Court of Appeal’s judgment, the Supreme Court unanimously allowed the charities’ appeals and set aside the Court of Appeal’s order and restored the District Judge’s order of £50,000.The kernel of the decision was that the Court of Appeal had no proper basis for interfering with the judgment made by the District Judge and that the broad brush approach adopted by the District Judge was correct. The Supreme Court emphasised the importance of limiting awards to adult children to “maintenance”, highlighting that the purpose of the Act was NOT to provide legacies to an applicant. Reasonable provision for maintenance does not mean providing everything that the applicant reasonably needs but requires a single assessment by the judge and this assessment may be weighted by any of the factors in section 3 of the IPFDA, including estrangement; here the circumstances of the relationship  and estrangement between Mrs Ilott and Mrs Jackson carried weight.

Conclusion

Lady Hale in her judgment reviewed the history of the Act and preceding legislation, commenting on the unsatisfactory state of the law where it gives no guidance as to the weight of the factors to be taken into account in deciding whether an adult child is deserving or undeserving of reasonable maintenance. At the moment, the approach is of a value judgment which could be problematic as there are wide varying opinions in judiciary and public opinion as to the circumstances in which adult descendants ought or ought not to be able to claim on an estate.

SOCIAL MEDIA AND DISCLOSURE REQUIREMENTS FOR AIM COMPANIES

by

“Inside AIM” have published a recent article that examines the interaction of social media with disclosure obligations under the AIM rules.  An AIM company must have in place procedures, resources and controls to ensure it complies with the AIM rules (Rule 31).  

The article highlights this requirement in the context of the use of social media, in particular that the release of information through social media channels is not a substitute for making a notification under the AIM rules.  Furthermore, that care needs to be taken to ensure the use of social media does not breach the AIM rules relating to the principles of disclosure, including those concerning price sensitive information (Rule 10 and 11).  Premature or selective disclosures can also lead to issues under the Market Abuse Regulation.

ENTERPRISE INVESTMENT SCHEME RELIEF REQUIREMENTS

by

The case of Abingdon Health Limited v HMRC involved the First-tier Tribunal considering the requirements for qualifying for relief under the enterprise investment scheme (EIS).   EIS is essentially in place to encourage investment in smaller or high risk companies by providing significant tax relief to investors.  To qualify a company must have no more than 250 employees and gross assets not exceeding £15 million immediately before the share issue.

The case considered the provisions of the Income Tax Act 2007 regarding one of the clear conditions for tax relief that the EIS shares must not carry any preferential rights to company assets on a winding up.   In this case the Tribunal decided that there was such a preferential right carried by the ordinary shares due to the creation of a new class of “growth” shares. As a result the Tribunal agreed with HMRC’s position to refuse the issue of a compliance certificate in respect of the third issue of ordinary shares, and furthermore to withdraw relief in respect of the first two issues of ordinary shares.   This is a reminder as to the need to ensure that the company’s articles of association and the issues of shares, including any share restructuring, comply with the EIS legislation and HMRC guidance in order to obtain the tax relief for the investors.