Author: Chris Alexander

Mr Justice Morgan handed down judgment on 16 May 2013 in the High Court decision in the case of Marks and Spencer v BNP Paribas and it may have opened the door to claims by former tenants for reimbursement of “overpayments” made to ensure full compliance with a conditional break clause but that relate to periods after the break date.

Break notices are a frequent cause of litigation, especially in the current market where it can be more difficult to re-let premises once a tenant vacates.  Usually it is the uncertainty caused by the conditionality of the break provisions that leads to litigation but in this case the break was successful and it was the financial position post termination that was in issue.

In this case the break clause that M&S exercised was conditional upon there being no arrears of rent as at the break date and also upon payment of a break premium of £918,000 plus VAT to the landlord.  The break date was 24 January 2012 and this meant that M&S had to pay the full quarters rent payable on 25 December 2011 for the period to the March 2012 quarter day, even though if the break was successful M&S would not be in occupation for two thirds of that period and would get no benefit for the rent paid.

Having complied with the conditions and having exercised the break, M&S claimed for recovery of the overpayment of rent as well as other items due under the lease on the basis of:

1)                  An express term of the lease provided for apportioned repayment;

2)                  An term should be implied into the lease providing for apportioned repayment;

3)                  Restitution for total failure of consideration.

The landlord resisted the claim on the basis that there was no express term, a term need not be implied, that there was not a total failure of consideration and that there was a binding settlement agreement.

M&S failed with its first and third arguments but Mr Justice Morgan did believe that a reasonable person in possession of all of the background information which would reasonably be available would expect that such a term would be implied.  He based this in a large part upon the reservation of rent clause that provided for an apportionment of the final quarters rent at the end of the fixed term of this contracted out lease.

The implication of such a term represents a significant shift in favour of tenants, especially if it can be applied across the board into all commercial leases with break clauses.  Landlord could face claims from former tenants for reimbursement in a similar way (not just in relation to basic rent but also service charge and insurance payments as well).  However, it may be possible to confine this decision to leases in substantially the same form as this one, given the reasoning applied. It is uncertain what part the requirement to pay a break premium to the landlord also played in the judges findings because it may be that the premium meant that Mr Justice Morgan was more inclined to think that the parties had already decided what the landlord’s compensation for an early break was and that it should not effectively benefit twice.

It may not be the last we have heard of this case as it is rumoured to be the subject of an appeal by the landlord as so the Court of Appeal may get to express its views on the issues.  This will be watched closely by landlords and tenants alike.

Follow Chris on Twitter: @Alexander_CJ

If you would like more information or advice relating to a specific matter, please do not hesitate to contact Chris Alexander on 01727 798042 or by email chris.alexander@salaw.com.

© SA LAW 2013
Every care is taken in the preparation of our articles. However, no responsibility can be accepted to any person who acts on the basis of information contained in them. You are recommended to obtain specific advice in respect of individual case.

Author: Vanessa James

Commencing a claim in the Employment Tribunal does not currently attract a fee,  although this may be about to change. It has been proposed that anyone looking to bring a claim from the summer of 2013 onwards will face an upfront fee on issuing their claim and also a hearing fee if the case proceeds to a full hearing.

The appropriate fee payable will depend on the nature of the claim. Straightforward and low value claims such as claims for holiday pay, notice pay or redundancy pay will require an issue fee of £160 and hearing fee of £230. In more complex and high value claims for instance, unfair dismissal, discrimination, equal pay and whistleblowing, a claimant must pay an issue fee of £250 and a hearing fee of £950[1].

Why is this being considered?

The Government has revealed that it intends to transfer some of the burden of paying for the tribunal system to those actually using it. This may also be able to avoid the tribunal system being overwhelmed by vexatious claims. By claimants having to invest more of their own money, the Government predicts that this will make them consider more carefully whether or not they should bring a claim, particularly where the claim itself lacks genuine merit.

What are the implications for employers?

Employers believe that introduction of such fees will deter week claims. According to the Government, proposed fees will encourage businesses and workers into dialogue to settle problems earlier. They belive that use of non-employment tribunal routes such as conciliation and mediation are a more viable and cost-effective method that proceeding through litigation.  This does not take into account a number of relevant factors, such as the very narrow limitations (mostly 3 months), that employers may not fully understand the claim against them until the Claimant has completed and lodged the court forms and that reliable conciliation and mediation is not that readily available

For Respondents who do settle after the claim is issued it is likely that as part of any settlement the Claimant is going to seek the payment of any court fees they have had to pay to issue the claim so arguably it might be that more often than not the Respondent ends up ultimately paying the price.

What does this mean for people with genuine claims?

Any claimant with a  genuine claim and higher chance of success is likely to suffer from this proposal. The reason for this is that not everybody has sufficient financial resources to go through the tribunal process. There is an argument that the introduction of tribunal fees is unfair and may restrict access to justice. In order to tackle this problem, a Government consultation published on 18 April 2013 sets out proposals for fee waivers for those on low incomes to protect access to justice.

Those who tend to finance Claimant litigation (such as house contents insurance and no win no fee solicitors) will likely have some kind of mechanism for dealing with the court fee.  The insurers may cover the fee under the house contents policy or the no win no fee solicitor might decide to fund the court fee on the basis that they think they can recover it at the end.

It remains to be seen what effect, if any, the introduction of tribunal fees will have on the number of claims brought.

Author: Chris Cook

In the recent case of Walker -v- Sita Information Networking Computing Limited a Claimant suffering from obesity successfully appealed in a claim for disability discrimination against his employer.

Amongst other problems, Mr Walker suffered with diabetes, chronic fatigue syndrome, anxiety, depression and knee pain. Despite the range of impairments, there was no evidence presented to the Tribunal which demonstrated that his problems were caused by anything other than obesity.

Is obesity a disability?

The Tribunal confirmed that obesity was not a recognised disability for the purposes of the Equality Act 2010. However, the symptoms Mr Walker suffered with (as a result of his obesity) were such that, taken together, they did in fact constitute a disability.

To constitute a disability under employment legislation an employee must suffer from a physical or mental impairment which has a substantial and long-term (12 months or more) adverse effect on their ability to carry out normal day-to-day activities.

In the case of obesity, if an individual is making an effort to lose weight this could mean that any impairments connected with the obesity may not be considered long-term by a Tribunal.

How should an employer approach the issue of obesity?

It is clear from Walker -v- Sita Information Networking Computing Limited that obesity may make it more likely that an employee is found to be disabled for the purposes of bringing a disability discrimination claim.

Employers should therefore always treat any employees who suffer from obesity sensitively. The case of Mr Walker illustrates the importance of looking at the overall effect of any impairments rather than just focusing on their root cause. Employers cannot rely solely on the Tribunal’s view that obesity in itself is not a disability, when determining whether or not an employee is disabled. The range of any symptoms also needs to be considered.

Once you have considered the effect of any impairment(s), you should decide whether any reasonable adjustments could be made to better accommodate the employee.

Author: Vanessa James

The Department  for Business Innovation and Skills has recently announced a revised implementation timetable for major employment law reforms. These reforms aim to maintain flexibility and simplify procedures, in an effort to make the law more accessible and efficient for individuals and employers.

Employers should be aware of the key dates over the next twelve months, where the following reforms will be implemented:

Spring 2013

• Collective redundancy consultation period

The minimum period for collective redundancy consultation where an employer is proposing to make 100 or more employees redundant is reduced from 90 to 45 days.

Summer 2013

• Settlement agreements

The Enterprise and Regulatory Reform Bill renames compromise agreements “settlement agreements” to reflect their true nature and purpose. A statutory code will set out the broad principles for using settlement agreements.

• Fees for tribunal claims

Claimants who issue a claim against their employer in an employment tribunal will be required to pay a fee. The claimant will have to pay an initial fee to issue a claim and a further fee if the claim proceeds to a hearing.

Fees will also be payable for appeals submitted to the Employment Appeal Tribunal.

• “Protected conversations”

In an ordinary unfair dismissal claim, conversations between an employer and an employee or an offer of settlement made prior to termination of employment, may not be taken into account by an employment tribunal.

• Compensatory award limit for unfair dismissal

The maximum amount of the unfair dismissal compensatory award will be the employee’s 12 months’ preceding pay or the statutory maximum of £72,400, whichever is lower.

• Revised employment tribunal rules

The Employment Tribunal Rules of Procedure will be revised to simplify the process for dealing with tribunal claims. Changes include combining pre-hearing reviews and case management discussions into a preliminary hearing.

Autumn 2013

• Employee-owner contracts

This is a new type of contract where employee-owners will be given between £2,000 and £50,000 of shares in the employer, which will be exempt from capital gains tax, in exchange for foregoing certain employment rights. For instance, employee-owners would not have the “ordinary” unfair dismissal protection after two years’ continuous service.

Spring 2014

• Early conciliation

The Enterprise and Regulatory Reform Bill imposing a duty on the parties and ACAS to attempt pre-claim conciliation before proceeding to Tribunal. ACAS will offer the parties the opportunity to engage in conciliation for a prescribed period with a conciliation officer. Where the conciliation officer concludes that a settlement is not possible, or where the prescribed period ends without reaching a settlement, the claimant will be given a certificate allowing him or her to issue proceedings.

• Financial penalties on employers

The Tribunal will have the right to impose financial penalties on employers who it finds have seriously breached worker’s rights.

• Flexible working for all employees

The Children and Families Bill extends the right to request flexible working for all employees. As it stands, the right is limited to employees who have children under the age of 17 (18 if a child is disabled) or who are carers.

Author: Chris Cook

The European Court of Human Rights (ECtHR), in January 2013, heard the cases of four individuals who complained that UK law did not protect them from religious discrimination by their employers. They relied primarily on Article 9 of the European Convention on Human Rights incorporated into domestic law through the Human Rights Act 1998 (HRA 1998), which provides protection for freedom of thought, conscience and religion.

Nadia Eweida was prohibited by her employer, British Airways, from wearing a visible crucifix around her neck. This was the same for Shirley Chaplin, a geriatric nurse in an NHS hospital. She was moved from her role to non-nursing, administrative duties due to the crucifix’s visibility and accessibility. Her employer said the reason for this was “clinical safety”. Lillian Ladele was disciplined for refusing to carry out civil partnership ceremonies, and Gary McFarlane was dismissed for refusing to provide counselling for same-sex couples.

Only Nadia Eweida’s case succeeded. The ECtHR explained that BA had put too much emphasis on their projection of a certain corporate image. In contrast, it felt that the reason for the NHS’s interference in Shirley Chaplin’s right was for health and safety reasons. Before he started his job, Gary McFarlane knew that he would be expected to counsel same-sex couples. The ECtHR noted in Lillian Ladele’s case that her local authority employer had a policy which aimed to secure the rights of others also protected under the HRA 1998. As such, it allowed the local authority a wide margin of appreciation when striking a balance between the competing Convention rights of Ms Ladele on the one hand, and the needs of its service users on the other.

The Equality and Human Rights Commission has set out guidance on considerations that employers should take as a result of these judgments. In particular, it focuses on balancing the legitimate aims of the employer and whether these aims are being pursued by proportionate means. Ways in which employers can reduce potential claims include:

-    implementing and reviewing policies and practices relating to religion and belief in the workplace;
-    taking a balanced approach when considering the religion and belief of the employee; and
-    considering the impact of meeting the needs of the employee against the needs of the wider workforce and of its customers or service users.

Taking these steps can make for a more open and tolerant workplace and avoid expensive litigation through the employment tribunals for claims of religious discrimination.

Author: Clare MacKay

We advise on both primary school appeals and secondary school appeals. As part of our school admission appeals service, we can provide you with assistance in preparing school appeals letters and forms and other aspects of school appeals including representation at the hearing of school admission appeals.

Our Solicitor Clare Mackay has written ‘Ten Top Tips’ to help parents of children who did not get allocated the Primary School of their choice for their child. We understand the appeals process is complicated, so our tips will help those thinking of appealing gain a better understanding of what to do next and your rights.

Click here to read the ‘Top Ten Tips’.

© SA LAW 2013
Every care is taken in the preparation of our articles. However, no responsibility can be accepted to any person who acts on the basis of information contained in them. You are recommended to obtain specific advice in respect of individual cases.

Author: Karen Chase

Thanks to my teams fundraising efforts for Will Aid, SA Law are currently ninth highest donating firm in the Home Counties and in 33rd place nationwide. To recognise this achievement we were presented with a certificate to acknowledge this outstanding accomplishment.

Read the news stories:
The Reveiw
Watford Chamber

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For further information or to discuss your particular circumstances, please contact Karen Chase on 01727 798027 or by email at karen.chase@salaw.com.

Author: Chris Cook

Flexman –v- BG International Ltd (Reading Employment Tribunal)

An employee has recently claimed that he had been constructively dismissed after his employer initiated a formal disciplinary procedure against him as a result of information contained on his public LinkedIn profile.

Mr Flexman was a HR Executive employed by BG International Ltd. After a colleague anonymously reported that Mr Flexman’s LinkedIn account contained information which his employer might consider inappropriate, BG International began an investigation.

Click here to read the full article.

Author: Karen Chase

With the Inheritance Tax threshold (IHT) frozen at £325,000 until at least 2019 there is even more reason for people to carry out some careful IHT planning. Many more estates now and in the future will be liable to pay large IHT bills; the key is to limit the amount of tax payable by planning now and in the future.

Click here to read the full article.

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Author: Gary Dunger

Gary Dunger gives a brief summary of the complex requirements that might arise where a claim for a lease extension is made.

Click here to read the full Guide or Download the Guide.

Find out more about our Lease Extension Services

© SA LAW 2013
Every care is taken in the preparation of our articles. However, no responsibility can be accepted to any person who acts on the basis of information contained in them. You are recommended to obtain specific advice in respect of individual case.