General

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 24^thNovember 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.

“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.

Mediation has become a popular form of Alternative Dispute Resolution (ADR) in recent years. In many cases, it provides a mechanism for parties to avoid lengthy, expensive court proceedings and reach a settlement of their issues without causing detrimental damage to existing business or family relationships.

Background

Mediation is a process whereby the parties work together with a neutral third party to explore the issues in dispute with a view to negotiating a settlement. It is voluntary and confidential, with the parties retaining control over the process. In that respect, the parties agree to a time, date and venue for the mediation and together they appoint a neutral third party to facilitate the negotiations, called a mediator. The mediator’s role is to facilitate communication and narrow down the points of contention between the parties. The mediator encourages the parties to negotiate however remains impartial throughout, therefore they do not adjudicate on the issues or provide any advice. If the parties reach an agreement on the day, their lawyers can draft a legally binding contract for them to sign and the matter can be settled quickly. On the other hand, if the parties cannot settle the matter they are free to walk away from the mediation at any time.

Benefits

There are many benefits to mediation which make it an attractive alternative to litigation, some of which are discussed below:

• Communication

By including a neutral party in settlement negotiations, mediation often improves the communication between the parties. The issues are narrowed down and each party’s interests are considered which can bring clarity and a fresh perspective to the matter. Mediators are skilled at handling different negotiation styles to foster constructive discussions. This is especially important where business or family relationships are involved as mediation can help to preserve these important connections.

• Confidentiality

In the majority of cases, the parties will agree that the mediation should be confidential. This prevents either party from disclosing any information in connection with the mediation without the other party’s consent. The mediator is also bound by the confidentiality agreement. Confidentiality enhances communication and allows the parties to explore the issues without concern that information can be used against them at a later time.

• Control and flexibility

The entire process is controlled by the parties to the mediation. They are free to select a mediator and organise all aspects of the mediation with the help of their lawyers. The parties control the outcome and are not bound by the process. Either party may walk away from the mediation at any time. It also gives flexibility in terms of their settlement options as they can create an agreement to benefit all parties, in contrast with court rulings which are generally one sided.

• High success rate

Mediation is a highly successful form of dispute resolution. Many matters settle on the day or in the days after a mediation. Even where the mediation does not bring the dispute to a close, it serves a valuable purpose by pinpointing the issues and giving the parties a better understanding of their position and the overall case going forward.

Other factors to consider

An important issue to take into account when considering a mediation is the cost. Where successful, mediation is a cost effective process and an attractive alternative to litigation, which can become protracted and expensive. On the other hand, if mediation is unsuccessful you should be conscious that you may have to bear the cost of mediation as well as subsequent or ongoing court proceedings.

Where mediation is suggested by another party, it is important to exercise caution when deciding whether to reject that invitation to mediate. If the dispute ends up in court, a judge may deem a refusal to mediate as unreasonable in the circumstances and as a result the successful party may not win their costs in the proceedings. In that regard, even if you believe you have a strong case, it is prudent to give serious consideration to any invitation to mediate to avoid costs consequences later down the line.

Further information

If you are currently involved in a dispute and would like to review your options to resolve the matter, please feel free to contact our office for more information and advice at legal@cheyneygoulding.co.uk.

The ‘People with Significant Control’ (PSC) register was introduced on 6 April 2016 and imposes obligations on most companies, Limited Liability Partnerships and Societas Europaea to identify and record details of persons who ultimately own and exercise control over the organisation on a public register. The new rules are implemented by section 21A of the Companies Act 2006, inserted by the Small Business Enterprise and Employment Act 2015, and each entity outlined above has its own set of regulations which set out the finer details of the requirements. The register is one of a number of new measures whose purpose is to improve transparency of UK company ownership and increase trust in UK businesses.

Identifying persons with significant control

A PSC is someone who meets one or more of the following five criteria set out in the legislation:

1. directly or indirectly holds more than 25% of the shares; or
2. directly or indirectly holds more than 25% of the voting rights; or
3. directly or indirectly holds the right to appoint or remove a majority of the board; or
4. otherwise holds the right to exercise or actually exercises significant control; or
5. holds the right to exercise or actually exercises significant influence or control over the activities of a trust or a firm, which is not a legal entity, but itself meets one of the above criteria at 1 to 4..

Organisations affected by the new regime are under an obligation to take reasonable steps to identify persons with significant control and to maintain a PSC register. The register should be kept at the company’s registered office, available for inspection, and details should also be filed at Companies House.

If the company finds that it does not have any PSCs after its investigations, it is still obliged to report that fact. The PSC register cannot be empty. Failure to comply with the legislation is an offence and is punishable by way of fines or imprisonment.

What information is recorded?

The information to be added to the register for an individual includes their name, nationality, service address, country of residence, date of birth and the nature of their control in the company. For a relevant legal entity, the register should include the firm name, registered or principal address, company register details and number and nature of control.

The information must be kept up to date and should be filed at Companies House annually together with the companies confirmation statement.

For more in-depth information regarding the application of the PSC regime in relation to companies and LLPs the Government has published detailed guidance on its website, which can be accessed at: https://www.gov.uk/government/publications/guidance-to-the-people-with-significant-control-requirements-for-companies-and-limited-liability-partnerships.

The case of  Idemitsu Kosan Co Ltd v Sumitomo Co Corp was decided by way of summary judgement.  It held that when a party produced a Share Purchase Agreement in which it is expressly stated that the party is only giving a warranty, this party does not, by concluding the contract, make any statement to the counter party that could be taken as a misrepresentation.

The decision is a reminder as to the importance of suitable wording in the Share Purchase Agreement to cover the question as to whether warranties can also be taken as misrepresentations.  Depending on the circumstances, the remedies for misrepresentation (that is, damages calculated on a tortious basis and possibly rescission) may be preferable to the remedies for breach of contract.

An Employment Tribunal panel has held that Uber drivers fell within the definition of a ‘worker’ and were entitled to the national minimum wage, holiday pay, and protection of whistle-blower rights.  Uber argued that it merely ran a technology platform connecting drivers to passengers and in response the Judge stated that “the notion that Uber in London is a mosaic of 30,000 small businesses linked by a common platform is …faintly ridiculous.”

The Judge continued:“ Any organisation (a) running an enterprise at the heart of which is the function of carrying people in motor cars from where they are to where they want to be and (b) operating in part through a company discharging the regulated responsibilities of a PHV operator, but (c) requiring drivers and passengers to agree, as a matter of contract, that it does not provide transportation services ( through the Dutch UBV company or the UK Uber London Ltd) and (d) resorting in its documentation to fictions, twisted language and even brand new terminology merits we think a degree of scepticism.
“Our scepticism is not diminished when we are reminded of the many things said and written in the name of Uber in unguarded moments which reinforce the Claimants’ simple case that the organisation runs a transportation business and employs drivers to that end…that it is unreal to deny that Uber is in business as a supplier of transportation services…it is not real to regard Uber as working for the drivers and that the only sensible interpretation is that the relationship is the other way around.”

The tribunal panel held that the large degree of control that existed by Uber over the drivers was synonymous with that of a worker and not as Uber asserted as a status akin to that or being self-employed. “The drivers fall full square within the terms of the 1996 Act s230 (3) (b) (Employment Rights Act 1996).”

“This is not a contract at arm’s length between two independent business undertakings…they (the drivers) are recruited by Uber to work as integral components of its organisation.” 

An appeal may yet be forthcoming from Uber.

There is a growing concern about online privacy and how personal data is protected when the internet is accessed, as several data hacks continue to hit the headlines. In the recent case of Barbulescu and Romania, the European Court of Human Rights’ significantly held that it is not unlawful for the employer to access employees’ communications to ensure that they have been working, including Facebook, messages and accounts.  This blurs the line between human rights to privacy under Article 8 of the Convention rights and rights to data privacy, making it seem that data is not nearly as safe or private as initially thought.

Developments:

Whatsapp, a popular alternative to messaging, has recently enabled end-end encryption in their service.  This new method of protecting your communication means that the key to the encryption is only known by the sender and the recipient, the message is not decrypted when it reaches the server and is even inaccessible to Whatsapp.

This provides a safer method of contact than the unencrypted service we currently have in text messaging. When a text message is sent, it goes straight to the cell phone provider and is stored on the server. This message is then sent to the recipients phone. It is in plain text along the whole journey, meaning that anyone could read it.

Law enforcement versus technology sector:

The timing of this encryption is the interesting part, as it closely follows the battle between the FBI and Apple. A federal judge ordered Apple to help the FBI access the iphone belonging to Syed Farook, one of the people responsible for the terrorist attack on San Bernardino, California. Apple refused and outlined the privacy and security implications of allowing authorities access to a locked iphone, exclaiming it would require new software and would essentially ‘be a master key capable of opening millions of locks.’ Tim Cook, Apple’s Chief Executive argued that if the FBI had access to this one iphone, nothing would stop them from doing it to many others. It seems as though Whatsapp is painting a target on its back as this newly enabled end-end encryption means that nobody will have access to the data or communications between people.