Tom Marshall

The Coronavirus (COVID-19) pandemic has created unprecedented challenges for everyone. We have made a number of changes to our working methods to ensure continuity of service to our clients in a safe working environment.

All visitors to the office must make an appointment in advance. All members of staff are able to work remotely, and you will be able to contact us by telephone, email or video conference (including Microsoft Teams and Zoom) in the usual way.

We operate a digital first policy which means all our IT systems are designed for a remote workforce.  Our documents, processes and resources can all be accessed and managed securely online by staff.

When attending the office please note:

• all visitors are kindly asked to wear a mask on entry and sanitise their hands using the hand sanitiser provided;
• we may ask to take your temperature before entering the building;
• all meeting rooms have screens, which means visitors can remove their masks once they enter the meeting room if they wish to do so;
• QR code posters have been displayed around the office for the NHS track and trace app;
• hand sanitiser and facemasks are available and provided throughout the office; and
• the office is cleaned every evening including all touch points.

If you are not sure who you need to speak to or do not have their contact details, please get in touch with one of the following:

• Tom Marshall: tmarshall@cheyneygoulding.co.uk 07702 806 382 (company and commercial);
• Graham Young: gyoung@cheyneygoulding.co.uk 07967 333 328 (litigation and dispute resolution); or
• Christopher Seddon: cseddon@cheyneygoulding.co.uk 07596 227 305 (wills, trusts, probate and residential property).

Please get in touch if you would like to discuss the best way we can work with you.  This could be instant messaging or video conferencing as an alternative to face to face meetings.

Should you have any queries, please contact Tom Marshall

Cheyney Goulding turns 25 in 2020.

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Under section 1 of the Employment Rights Act 1996 employers are required to provide employees with a written statement of certain terms of their employment.  Certain information must be provided to the employee in a single document (the principal statement). Other information can be given either in the principal statement or in a supplementary statement or statements, which together make up the section 1 statement. This information is often incorporated into a written employment contract.  As it stands the written statement needs to be given within 2 months after the employment begins and applies to employees whose employment is to continue for more than one month. 

The law relating to written statements will be changing from 6 April 2020. Employers will need to provide these statements before employment starts and to employees irrespective of how long the employment is to last.  Additional information will also need to be provided.  At Cheyney Goulding we frequently review and update employment contracts on behalf of our clients.  Employers should check whether the employment documentation they provide to employees will comply with employment law including the upcoming changes.

The information that must be included in the written statement is summarised below. 

The following information is required to be given in the principal statement:

1. The names of the employer and employee.
2. The date the employment starts (including any applicable period of continuous employment).
3. Pay.  This should include the means by which it is calculated and the intervals of payment (e.g. monthly).  Non-contractual pay such as bonuses should also be included.
4. Hours of work.
5. Holiday entitlement (including in relation to public holidays) and holiday pay.
6. The employee’s job title and/or a description of the work.
7. Place of work. Where the employee may be required, or is permitted, to work at various places, an indication of that fact and the address of the employer.
8. A person to refer any appeal if the employee is dissatisfied with any disciplinary or dismissal decision.
9. A person to apply to in connection with any grievance and the way any such application should be made.

From 6 April 2020, additional particulars must also be provided to all employees in the principal statement:

1. The days of the week the employee is required to work and details of how these may vary.
2. Any entitlement to paid leave, including maternity leave and paternity leave.
3. Any other remuneration or benefits.
4. Details of any probationary period.
5. Any required training including details of any training the employer will not be paying for.

Also from 6 April 2020, the following particulars that may currently be provided in a supplementary statement must be given in the principal statement:

1. The notice periods for termination by the employer and employee (if applicable, reference to the relevant law on minimum notice periods is adequate).
2. Terms relating to absence due to incapacity and sick pay.
3. Terms as to length of temporary or fixed-term work.
4. Terms related to work outside the UK for a period of more than one month including how long they are to work outside the UK, the currency in which they will be paid, any additional pay or benefits due as a result of working outside the UK and any terms relating to returning to the UK.

Particulars that may be given in another reasonably accessible document (e.g. staff handbook)

The employer can choose whether to put the following information in the principal statement, in supplementary statements or in reasonably accessible documents that are referred to in the section 1 statement (or supplementary statement):

1. Terms relating to absence due to incapacity and sick pay.
2. The notice periods for termination by either side, subject to the specific provisions referred to below.
3. Information about disciplinary and grievance procedures.
4. Terms as to pensions and pension schemes.

Particulars that may be given in a supplementary statement up to 5 April 2020

Until 5 April 2020 certain information can be given in “instalments” by way of supplementary statements, at different times to the principal statement, as long as all the information is given within two months of employment starting.  Please note that from 6 April 2020 this will be changing (as above):

1. Terms related to work outside the UK for a period of more than one month.
2. Terms as to length of temporary or fixed-term work.
3. A note giving certain information about disciplinary and grievance procedures.
4. Details of any collective agreements affecting the employment.

From 6 April 2020, all the required particulars must be provided by the start date save for the following which may be given in instalments up to two months after the beginning of employment:

1. Terms as to pensions and pension schemes.
2. Details of any collective agreements affecting the employment.
3. Details of any training provided by the employer.
4. A note giving certain information about disciplinary and grievance procedures.

Section 4 statement, variations

If there is any change to any of the required information, the employer must give the employee another written statement detailing the change as soon as possible, and no later than one month after the change. If the change requires the employee to work outside the UK for a period of more than one month, the written statement must be given by the time the employee leaves the UK.

A section 4 statement does not by itself amend the employment contract without the employee’s consent.

Transitional provisions

The changes will not apply to employees whose employment started under the existing rules. However, from 6 April 2020, existing employees may request a written statement complying with the new requirements. The employer will be required to provide it within one month. Employees may only request such a written statement once.

This guide is for general information only and does not constitute legal advice.  If you would like to discuss anything in this article please get in touch.

See other recent articles we have written:

Articles of association, a short guide

Increase in probate fees to begin in April 2019

Court of Appeal uphold Employment Tribunal decision that Uber drivers are workers

Cheyney Goulding LLP, solicitors in Guildford, Surrey

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Using a company to run a business is often the most advantageous structure to use when compared to the sole trader and partnership models.  It can provide tax benefits, help protect shareholders and directors from liability and offer a flexible format for obtaining investment.  At the end of March 2019, there were about 4 million companies registered at Companies House (see further https://www.gov.uk/government/publications/incorporated-companies-in-the-uk-january-to-march-2019/incorporated-companies-in-the-uk-january-to-march-2019). 

This guide looks at the role and function of a company’s articles of association.

Articles of association

Every company must have articles of association.  The articles act as a rulebook setting out regulations for the internal affairs of the company.  They form a type of contract between each of the shareholders and the Company.

Companies are free to create their own bespoke set of articles (within the scope of company law generally).  In the absence of doing so companies are automatically incorporated with a standard set of articles called Model Articles as set out in the Companies Act 2006.  The Model Articles for a private company limited by shares can be found here https://www.gov.uk/government/publications/model-articles-for-private-companies-limited-by-shares/model-articles-for-private-companies-limited-by-shares#part-3-shares-and-distributions-1.  Companies will often use the Model Articles as a base, and adapt and add to its provisions to ensure it is fit for purpose for the particular business and its ownership and management structure.

The Model Articles are divided into five sections:

Interpretation and limitation of liability (articles 1 and 2)

Here various terms are defined, and rules of interpretation established that apply to the rest of the document (article 1).  Article 2 indicates that a shareholder who has paid for their shares in full (including any premium) has no further liability to contribute to the assets of the company in respect of those shares.  This is an important concept for most companies limiting the liability of the shareholders to the payment due on their shares.

Directors (articles 3 to 20)

Directors are responsible for the day to day management of the company.  This section sets out how the directors should conduct themselves, hold meetings, make decisions and avoid conflicts of interest.  It also covers rules concerning the appointment and removal of directors.

Shares and distributions (articles 21 to 36)

The Model Articles envisage a simple share structure of one class of ordinary share.  These shares have one vote per share and equal rights to distribution in relation to income (dividends) and other distributions e.g. a capital distribution on winding up.  This section also covers the process for the transfer of shares, which under the Model Articles is largely unrestricted save that the registration of a share transfer is at the discretion of the directors.

Decision making by shareholders (articles 37 to 47)

Shareholders as the owners of the company hold the ultimate decision making power.  This section sets out how the shareholders should conduct themselves, hold meetings and make decisions.  Certain decisions are reserved to the shareholders (rather than the directors) such as the amendment of articles and the issuing of shares on a non-pre-emptive basis.

Administrative arrangements (articles 48 to 53).

A catch all section dealing with items such as insurance and indemnities for directors, company seals and the means by which communications will be made.

Amending the Model Articles

There are a number of areas in a company’s articles that commonly get supplemented.  A few of these are summarised below.  Please contact us to discuss your requirements in more detail:

1. Where a more complex share structure is required different classes of shares can be created and defined in the articles.  For example, where shareholders are contributing to a company in different ways, perhaps by working in the business compared to investing capital, different classes of shares with different rights can be desirable.  Common classes of types of shares are, ordinary shares, preference shares and non-voting shares.  Shares can be given enhanced or no voting rights.  They can also have varied rights to dividends and other distributions.  For example a preference share may entitle the holder to a percentage of the profits each year in preference to the other classes of shares.
2. The basis upon which shares can be transferred.  Under the Model Articles shares transfers can only be registered at the discretion of the directors.  Whist In exercising the power, the directors must act in good faith in a manner that promotes the success of the company, it is often desirable to provide a clearer and more comprehensive procedure for the transfer of shares.  A common addition is to stipulate that a shareholder wishing to sell their shares must first offer them to the existing shareholders.  There is typically a mechanism for determining the fair or market value of these shares.  This seeks to strike a balance between the interests of the selling shareholder looking to exit the company and the other shareholders who may not want a third party becoming a shareholder.  Other related articles include allowing family members to be transferred shares freely and for shares to be automatically offered to the other shareholders on the happening of certain events e.g. death, bankruptcy or breach of contract.
3. Providing for the sale of the company as a whole.  Often referred to as “drag along” and “tag along rights”.  Drag along rights allow a majority of the shareholders to sell their shares to a buyer and “drag” along the remaining shareholders on the same terms.  This ensures that a minority shareholder cannot hold the majority to ransom on a sale.  A buyer will often want to ensure that they are purchasing the entire issued share capital of the company.  Tag along rights on the other hand allow a minority shareholder to “tag” along with any sale of shares that the majority of shareholders may be considering. 

Cheyney Goulding is a firm of solicitors in Guildford, Surrey.  We frequently advise companies, shareholders, directors and investors on articles of association.  When reviewing a company’s articles it is also crucial to consider the terms of any shareholders’ agreement.  Shareholders’ agreements and articles of association should be drafted in such a way as to complement one another ensuring they do not conflict and that between them the internal affairs of the company are regulated in such a way that is fit for purpose and reflects the wishes of the shareholders.

This guide is for general information only and does not constitute legal advice.  If you would like to discuss anything in this article please get in touch. 

See other recent articles we have written:

Increase in probate fees to begin in April 2019

Court of Appeal uphold Employment Tribunal decision that Uber drivers are workers

Equine Industry Issues

Cheyney Goulding LLP, law firm in Guildford, UK

In our article on “Risks associated with employing workers within the Gig economy” written in August 2018 reference was made to the case of Uber BV and others v Aslam and others and its effect on the classification of individuals as being self-employed or being employed as workers.

In recent developments the Court of Appeal considered this point of contention and upheld the previous decision of the Employment Tribunal that Uber drivers are to be classified as “workers” for the purpose of the Employment Rights Act 1996, and as such are entitled to certain statutory rights such as minimum wage and paid holiday.

Reference was made to the case of Autoclenz Ltd v Belcher [2011] wherein it was found that written documentation alone may not reflect the reality of the relationship between an individual and an employer, and that when looking to classify the nature of the relationship in question you must examine all of the surrounding circumstances, of which the written documentation may only be a part. The fact that there may be a signed document would most definitely be relevant but may not be conclusive. The effect of the Autoclenz case was that the court could disregard the terms of a contract created by an employer if it was not a realistic reflection of the relationship in question.

The Court of Appeal’s decision to uphold the Employment Tribunal’s decision clearly shows the trend in regards to how employment relationships are being viewed by the courts, as well as further demonstrating the need for both employers and individuals to be aware of the risks they may face when operating inside the Gig Economy.

Should you have any questions about your rights as an employee or employer please do get into contact with a member of our team.

The European Court of Justice has sided with a worker and his right to be compensated for untaken annual leave.

The case of King v The Sash Window Workshop Limited and another C-214/16 clarified that in circumstances where an employer has refused to recognise a worker’s right to paid annual leave, the worker has the right to be compensated for all of that leave on termination, whether or not he actually took the leave.

The case represents yet another challenge to the Government’s outdated labour laws, demonstrating a need for change in light of the gig economy. The failure of organisations for wrongly classifying their staff have created significant expense for these organisations. The payment of national minimum wage is not usually an issue in these cases as organisations frequently pay above this threshold. However, the right that workers have to paid annual leave could have greater consequences for these organisations.

The King decision increases the cost even further to those organisations that fail to recognise worker status correctly. The national minimum wage recovery period being six years, whereas King has confirmed that compensation for unpaid holiday can be claimed all the way back to 1993.

As a result of the ECJ’s decision in King, the cost of failing to recognise worker status has increased significantly, particularly for those organisations that have been operating for many years. In national minimum wage cases, the maximum period of recovery for past losses is six years. Following King, compensation for unpaid holiday can now be claimed all the way back to 1996.