The growing unaffordabilty of the present pension system, particularly the public one, has been obvious for years, but pensions are a very long term issue and politicians think short-term about unpleasant decisions. However the unaffordability has reached the point where the Government has to grasp the ageing bull by the horns.

Hence the current review about scrapping the default retirement age in the UK of 65 years. At least we are not alone. The European Commission says that 27 member states need to increase their retirement ages to 70 by 2060; though no other country has current plans beyond age 68.

At present under Labour’s Employment Equality (Age) Regulations 2006, employers can force staff to retire at the age of 65, subject to a process. The likely result of the review seems to be that a default retirement age will be phased out altogether from next April, before becoming unlawful on 1st October 2011. Older workers will then only be dismissed lawfully on the same grounds that would apply for any younger employee.

As workers age, particularly once retirement becomes less affordable, incapability dismissals may multiply, with the employer risking an unfair dismissal and age discrimination claim. What will be the measure of incapability: will it really be reasonable to ask the same performance of a 70 year old as a 20/30/40 year old? If they are paid the same, why not?

And once people have the right to continue working, the Government will feel justified in reducing pensions because people can choose to work. And then the choice will become unaffordable and people will have to work. And it is employers who will have to deal with ageing in the workplace and manage dismissal if the employment no longer works for the business.

Decisions taken now will affect most of us and ours for many decades. We all know that cost considerations will mainly determine the outcome of the review. However if, like many, you are concerned about the retirement age issue it’s worth putting in your pennyworth and responding to the consultation at:www.bis.gov.uk / Consultations/Retirement. There are lots more details there and you have until 21 October 2010 to respond. Things can’t stay as they are, so the key question is: should retirement age be raised or be abolished altogether?

Frances Barker is Employment Partner at Blocks Solicitors, helping employers and HR professionals to manage their staff. Contact her on 01473 343911 or frb@blockslegal.co.uk

The above is general comment only and individual advice should be taken.

Here are just some of the matters on which solicitors can offer advice and assistance in such circumstances:-

• The validity and effect of a Will

 A solicitor will be able to advise about the whether the will is valid, particularly if it is a home made will.  Wills can now be quite complex containing trusts to take into account business interest and/or children from second marriages for example.  A solicitor will be able to advise how such trusts should be set up and administered. 

• The Intestacy Rules if there is no Will

Many people still die without leaving a will and even if someone died leaving a spouse or civil partner other people may still be entitled to their assets under the intestacy rule.  A solicitor is able to advise who gets what in these circumstances and offer practical solutions to prevent families from falling out. 

• Obtaining a Grant of Probate

 When someone dies the assets are frozen until a Grant of Probate (when there is a will) or Grant of Letters of Administration (when there is no will) is issued by the Probate Registry. The procedure to obtain the Grant varies depending upon the size of the estate but will usually require the filing of an Inland Revenue form and another document called The Oath For Executors.  The forms are quite complex and using a solicitor can streamline this process and avoid the need of an interview at the local Probate Registry. 

• Calculating and Paying Inheritance Tax

If an estate exceeds the nil rate band (currently £325,000) then inheritance tax may be payable at 40% depending upon the exemptions and reliefs which are available.  A solicitor will be able to provide advice about reducing the inheritance tax liability such as the use of the transferrable nil rate band.  This enables the unused nil rate band of a spouse or civil partner who has previously died to be used against the survivor’s estate.  A solicitor is also able to explain how some inheritance tax may be paid in instalments rather than having to be funded immediately.

• Dealing with Income Tax and Capital Gains Tax

As well as dealing with the inheritance tax position it is necessary to finalise the income tax and capital gains tax when someone dies and solicitors are experienced at dealing with these issues. 

• Varying the Will

A solicitor will be able to advise on whether the will can be changed and prepare the appropriate documentation. This is sometimes necessary to change the distribution of the estate or to reduce the amount of inheritance tax being paid.

• Disputes between Beneficiaries

Sadly disputes between beneficiaries are becoming increasingly common as people’s life styles become ever more complicated.  A solicitor will be able to provide timely advice and can prevent such disputes escalating results in permanent family fractures. 

It can be hard to cope when someone close to you dies.  Often seeing a solicitor will help provide the legal expertise needed at this time. 

Article by Louise Long

 The above is general comment only and individual advice should be taken.

Reasons to reduce share capital include:

• when a company’s capital exceeds its needs.
•  to eliminate a deficit on the profit and loss account.
•  to create distributable reserves in order to be able to transfer assets or cash to shareholders.
•  to create a fund to allow the company to redeem shares.

 In the past, limited companies wishing to reduce share capital required court approval . Although this system remains in place, private limited companies may now use a simplified non court-based procedure. This involves the production of a solvency statement under section 642 of the Act in which each of the directors state their belief that there are no grounds on which the company would be unable to pay or discharge its debts in the next 12 months, taking into account the liabilities of the company. The statement must be unqualified.

Great care needs to be taken in giving such a statement, since if the opinions contained in it are not reasonable, directors may face criminal sanctions. Directors should take informed accountancy advice and look carefully at statutory accounts, management accounts, cash flow forecasts and other risk indicators.

The statement needs to be accompanied by a special resolution by the members of the company and there are filing requirements at Companies House

The procedure is easier, quicker and cheaper than applying to court and provided the solvency statement is given, creditors may not object to the reduction in capital. Those directors with complex trading companies may, however, baulk at the risks of getting it wrong.

For more detailed information please contact Andrew Fleming on 01473 230033 or email arf@blockslegal.co.uk

The above is general comment only and individual advice should be taken.

Employers can be held “vicariously” responsible for acts of discrimination or harassment by their employees. So where an employee is making discriminatory comments about fellow employees, or for example, making sexual advances to a colleague through social networking it can amount to harassment, and employees in some circumstances could sue there employers, even if it takes place outside of work. To avoid liability, an employer will need to show that the employee was not acting in the course of employment but this is not as easy as it sounds as it is interpreted widely.

Employees who can show that they have taken all reasonably practicable steps to prevent the harassment or discrimination should not be liable. Training employees on such issues and having policies in place will help employers show this. Training should highlight what standards employers expect between colleagues even outside of work.

Confidential information of a business can also be at risk from social networking sites. Employees can easily give information about there work day thinking it innocent information, for example a case of mine where an employee working for in insolvency had Tweeted about going to a meeting in a manner which clearly identified the destination causing his followers to speculate about the financial status of the client. Often customer lists and client details are confidential information belonging to an employer (either contractually or otherwise) and use after termination of employment can be damaging to a business. As a result businesses take steps such as having contract provisions to deal with their ownership of this information. However due to social networking particularly those aimed at the business community, for example LinkedIn, where lists of business contacts are essentially in the public domain there are questions surrounding whether those contacts still covered by a contract or protected when an employee leaves?People tend to think that sites are private however this is usually not the case and many employers use sites to check out employees before they join. Employers need to be aware that this could lead to problems if discovered as the information gained, where it relates to sensitive personal information about an individual such as their sexuality or religion (for example), could lead to discrimination claims by rejected candidates. They are also processing information from the perspective of data protection legislation, and probably in breach of requirements under it.

Employees who go home after a difficult day saying they hate their boss and that their day was rubbish could be damaging the reputation of the employer as many of their social networking friends will know where they work. Additionally colleagues who may be friends on social networking sites may have different views on things being posted and pass information on to others or back to their employer. Damage of this sort is hard to quantify but could be a disciplinary matter in some cases. Employers who want to be able to discipline employees should be explicit and clear about what behaviour is acceptable, and the consequences for not meeting the set standard. Employers need to be mindful of individual’s rights to privacy and freedom of speech, but f employers end up dismissing an employee for matters relating to social networking the question in relation to employment matters (and potential unfair dismissal claims) would normally be whether or not it was fair and proportionate to dismiss the employee in the circumstances, rather than considering the right to privacy.

Employers should review contracts and policies to ensure they deal with the issues and cover the risks. Employers can limit access at work to restricted hours (or completely), and should be explicit about when and which sites can be accessed. Specific policies or additions to existing ones to cover online/social bullying and harassment, and confidential information are advisable. They can include reference to monitoring of use in work. As with all policies having them is not enough. They need to be brought to employee’s attention, and actively used.

For specific queries please contact Victoria Young, employment solicitor at Blocks who will be able to assist with this and any other employment related legal matters vy@blockslegal.co.uk direct dial 01473 343922.

The above is general comment only and individual advice should be taken

 The national minimum wage (NMW) was introduced in 1999 by the National Minimum Wage Act 1998 (NMWA 1998). It gives workers the right to a specified minimum hourly rate of pay. The employer is under the obligation to pay the NMW, and there are no exclusions for smaller employers. Calculating the amount paid for the purposes of the NMW can be relatively complex as various rules relating to both the relevant pay period and hours worked apply. Additionally certain payments and benefits can be taken into account, or deducted making the calculation less than straightforward. Some groups of people will fall outside the NMW protection because of the nature of their work, for example family members living and working at home but paying nothing for food and board will not be entitled to receive the NMW. Employers are obliged to keep certain records and how these to employees if they receive request to view them.

Failure to pay the NMW can be expensive for employers as employees can claim backdated pay up to the minimum wage going back historically, and failure to pay the NMW will be a breach of contract. Workers also get special protection form dismissal or detriment for bringing claims in relation to the NMW or raising issues with employers.  HM Revenue and Customs (HMRC) can also enforce breaches and in some cases criminal prosecutions may result.

Government guidance on the NMW is available on the websites for Business Link, Direct Gov and the Department for Business Innovation and Skills.

For help with legal issues relating to the NMW or employment law generally contact Victoria Young on 01473 343922 or email vy@blockslegal.co.uk

The above is general comment only and individual advice should be taken.

With the aid of a trained mediator, people who are in conflict can explore ways in which they may find a mutually acceptable way forward. The mediator remains neutral and does not impose a decision, but assists the parties in finding a solution.

The key advantages of mediation are that it is:

• voluntary – all parties enter into the mediation process by agreement and can choose to bring it to an end if they wish;

• confidential - the mediator and the parties agree to keep confidential all information which is disclosed in the mediation;

• flexible – it takes place at a time and location agreed by the parties, and can provide solutions not available through the courts; 

• quick to arrange - rather than waiting months for a formal court hearing, a mediation can be arranged as soon as the availability of the parties is known;

• usually successful – research shows a steady 75 – 80 % success rate across a broad spectrum of mediation’s

The mediator will assist in recording the outcome of the mediation. This may be a document which simply records the agreement reached in plain language or may be a more complex document which includes a commitment to obtain an agreed court order.

So, next time you are wondering how to deal with that dispute which has been taking up too much of your time, money and energy – think mediation !

Dilys Lloyd is an experienced employment lawyer working as a Consultant with Blocks and is a CEDR accredited mediator. She can be contacted at dilys_lloyd@blockslegal.co.uk

The above is general comment only and individual advice should be taken.

Part-time workers had historically been considered to be a different class of worker to those who worked full- time, with reduced rights, however this is no longer the case with part- time workers having protection from being treated less favourably than their full-time colleagues under The Part-Time Workers Regulations. These Regulations have been in force for ten years, but with the rise of part-time working are becoming more important.

A part-time worker has the right not to be treated less favourably than the employer treats a comparable full-time worker:

· As regards the terms of their contract; or
· By being subjected to any other detriment by their employer.

The full-time worker for comparison is employed by the same employer, under the same type of contract, engaged in the same or broadly similar work having regard, where relevant, to whether they have a similar level of qualification, skills and experience and usually in the same location.

In looking at whether there is less favourable treatment and detriment you have to ask whether a reasonable person would take the view that the part-timer has been disadvantaged in some way. Less favourable treatment and detriment cannot be cancelled out by more favourable treatment of a different kind. This means that, when looking at whether a part-time worker’s contract is less favourable than a full-time worker’s contract, you need to take a term-by-term approach rather than look at the contract as a package.

Employers should ensure that they treat part-time employees as favorably as full-time (subject to a pro rata principal) unless there is an objectively justifiable reason for not doing so.

Statistics show that more women than men work part time, and so employers also need to be aware that part-time employees may also have claims for indirect sex discrimination if they are not treated as favorably. Typical headache areas include holiday pay, bank holidays, and bonuses.

As well as in terms of contracts, employers should not for example consider part timers fair game for easy redundancy cuts , or overlook them for promotion, as to do so risks employment claims and can be costly.

If you have part- time workers in your work force, review part-time contracts and take advice if necessary, to avoid the pitfalls and enable you to benefit from the wealth of experience employees who are prepared to work part-time.

For specific queries please contact Victoria Young, employment solicitor at Blocks who will be able to assist with this and any other employment related legal matters vy@blockslegal.co.uk direct dial 01473 343922.

The above is general comment only and individual advice should be taken.

Focusing on the positive must be good if it allows for some work to be done rather than no work, particularly if the employee benefits from sick pay. As usual with legal changes, this one fits best in large employer settings but is imposed on us all. The fit note from the GP records an employee either ‘not fit to work’ or ‘may be fit to work taking account the following advice’. Based upon the GP advice, it allows work to be done which is effectively a temporary variation in the employee’s contract eg the type of work, hours, where it is done and methods of working. It all fits with the flexible working revolution.

The GP describes the effects of the illness and can suggest one of four possible solutions to assist the employee’s return to work: a phased return, amended duties, altered hours or workplace adaptation. Research shows that suitable work is actually good for you and assists recovery, and phased return is often very effective. The GP can also recommend that Occupational Health advice is taken, and this seems increasingly the way of the future: paid for by employers rather than the NHS, and with expertise about health in work-places of which medical public servants will often have no understanding. Make sure your business has an OH adviser who is practical and understands the economic rather than purely charitable relationship with employees.

The GP will only know what the employee tells them about work, all packed into a short consultation. The recommended work may be unavailable, unrealistic or too costly. So managers should look carefully at the recommendation, not panic and bear in mind that there is no absolute obligation to provide the adjusted work. If the adjusted work is not made available then the fit note becomes a sick note in respect of the original job and the employee is laid off as usual. Though the GP can only recommend not dictate, take care before refusing altered work as, for example, if refusal is unreasonable then an employee on SSP only may bring a claim for the money they would have earned if the adjusted work had been given, and a later dismissal for incapability may be contested as the adjusted work should have been given instead.

Faced with a Fit Note consider: will making the adjustment work for the business? Discuss it with the employee. If the adjustment will not work, and there is no suitable variation that will, the employee goes home on sick leave. Consult OH and also your employment lawyer if you think it may become contentious. Provided there is a positive approach, GP’s are sensible, and the right advice is taken early on, the new Fit to Work regime may prove to be a real asset to businesses. This should be clear when the Government publishes its evaluation of the new system in 2012/13.

Frances is employment partner at Blocks Solicitors and has considerable management experience. Contact her on 01473 343911 or frb@blockslegal.co.uk

The above is general comment only and individual advice should be taken