Monthly Archives: March 2021

POST COVID-19

Employers, this does not have to be you…

Do any of these sound familiar?

• “When is it safe for employees to return to the office?”

• “What steps should I take before they return?”

• “Do I have to say yes if my employees ask to work from home?”

• “Can I insist that employees take a covid test before they return to the office?”

• “What can I do if they refuse?”

• “Do I have the right to ask about vaccinations?”

• “Will social distancing still apply to employees when they return after April?”

• “What do I do about employees who are afraid to return to the office environment?”

• “Do I have to permit employees to work from home?”

• “If employees have vulnerable relatives who they live with, should they be treated as special cases?”

• “Can I put employees on furlough?”

• “Do I have to pay full pay to employees on furlough?”

• “Can I consider redundancies whilst employees are on furlough?”

• “Do I need to consult with them?”

• “Can I use furlough pay for any redundancy payments and/or notice payments?”

• “What safeguards should I put in place for employees with mental health issues that blame furlough or that have arisen from the pandemic?”

Make sure you are prepared for the end of lockdown.

FG Solicitors offer a proactive and practical approach, providing employers with the confidence to tackle employment issues.

To find out what you CAN do please contact FG Solicitors on 0808 172 9322 for a no obligation discussion.

WELCOME TO A MORE CONFIDENT FUTURE!

 

This update is for general guidance only and advice should be taken in relation to a particular set of circumstances.

ADVANCED WARNING…..NATIONAL MINIMUM WAGE INCREASES

It’s that time of year again when employers have to start budgeting for an increase in the National Minimum Wage (“NMW”).

Younger age group to benefit!

“Those aged 23 and 24 years are set to receive an 8.7% pay rise,
which will need to be accommodated in the wage bill”.

The Government has decided to lower the age bracket for those entitled to the National Living Wage from 25 to 23. In real terms this gives rise to a £0.71 per hour increase for 23 to 24 year olds. Based on a 40-hour working week this increase amounts to an annual gross increase of just under £1,500.00.

Hourly wage change!

The following changes to the NMW hourly rate will take effect from 01 April 2021:

Getting it wrong!

“It pays to get it right. HMRC will take action;
and will publicly name and shame employers in breach”.

The NMW is enforced by HMRC, which can include service of notices of underpayments and penalties, “naming and shaming”, recovery of underpayments through litigation and criminal prosecutions.

Workers can bring claims for unlawful deduction of wages in the employment tribunal.

Is your business compliant?

To ensure your business is compliant there needs to be a thorough understanding as to what constitutes working time for the purpose of establishing if your business is paying its workers the NMW.

Time spent actually working is clearly identifiable but what about time spent travelling or “on-call”? Do you understand the legal position and how to approach these issues?

FGS are experts in helping its clients safeguard their business from legal, financial and reputation risks so they have greater certainty over their commercial outcomes.

If you require further guidance about the impact the above changes will have on your business or NMW compliance, please feel free to call us on 0808 172 9322 for a no obligation discussion.

WELCOME TO A MORE CONFIDENT FUTURE!

For further details about the commercial legal service and assistance we provide to businesses, please click here. 👇

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This update is for general guidance only and advice should be taken in relation to a particular set of circumstances.

BUILDING A SHIELD AGAINST NON-COMPETE

Non-compete clauses may be banned

In our recent article regarding the Department for Business, Energy and Industrial Strategy’s consultation on reforming the use of non-compete clauses, consideration was given to what may lie ahead for employers including the possibility of an outright ban on employers preventing employees from working for competitors.

Consultation has now closed but it will be some time before we know whether legislation will be introduced to limit or ban the use of non-compete restrictions and whether there will be a call for the removal of other restrictions from contracts of employment.
Given the agenda is promoting a shift away from employers being able to protect their businesses towards creating more opportunities in the labour market, employers will need to consider how they can restock their armoury to protect against competitive activities when the changes arrive.

Proactive risk management

In assessing what might work for your business, the starting point should be to identify where the risks are and what impact they would have on the commercial and financial aspects of the business if they became a reality.
Suggested areas for review would be customer connections, the workforce, key personnel and those that are highly skilled and your confidential information. The question to consider is what damage would arise if any of these key components of your business ended up in the hands of your competitors?

In the absence of any legislation or otherwise prohibiting the use of non-compete clauses and other post-termination restrictions, there is no reason why employers cannot for the time being remain faithful to the practice of having restrictions in the contracts of employment. However, any covenants in place should be reviewed to identify if they are fit for purpose and would withstand the scrutiny of the courts. A one size fits all approach to restrictions in contracts of employment is never a good place to start. From a risk management perspective, there is little point in having restrictions in place if they are badly worded or have no relevance to the role the employee is currently undertaking.

Apart from non-compete clauses what other options are there?

There are other ways of protecting the business’ interests and preventing competition that do not involve direct post-termination restrictions. Some possible options are considered below:

• Consider strategies for staff engagement and retention.
Staff who feel engaged and have career development opportunities are more likely to stay with you. This can decrease the risk of the business being exposed to competitive activities. Employee questionnaires are a good way of obtaining staff feedback about what they value about working for you and areas for improvement, which will assist to inform your strategies.

• Understand what other contractual provisions may have value.
Employees who are on garden leave during their notice period are out of your business, which allows for time to manage and strength client relations. By the end of the garden leave period, confidential information may have lost its commercial sensitivity. Garden leave clauses can be used in conjunction with other restrictions. Setting off a period of garden leave against the duration of a direct post-termination restriction can result in the court finding the restrictions is a reasonable restraint of trade.

A properly drafted confidentiality clause that clearly sets out what confidential information and trade secrets are in the context of the business and employee’s work is a powerful tool against competition. Without such a clause, an employer can only rely upon the implied obligation to protect trade secrets following an employee’s departure, which for many businesses does not go nearly far enough to protect against the sort of mischief the misuse of for example, pricing lists or a tender submission can create if in the hands of a competitor.

• Do not give an employee a good reason to challenge the remaining clauses.
If the contract of employment is breached by the employer, then the contract comes to an end. This means that the employee’s continuing obligations after their departure will no longer be valid. Employers can minimise the risk of this scenario as follows:

o If dismissal is on the cards, ensure that the employment ends in accordance with the contractual terms.

o Avoid situations where the employee may argue that there has been a fundamental breach of their contract entitling them to resign and treat themselves as dismissed. For example, not addressing a grievance properly.

o Watch out for the “tactical” employee who knows they are unlikely to be any continuing obligations if the above scenario arises. A job offer from a competitor or a desire to set up in competition on their own account may just lead to an employee attempting to construct a scenario, which would allow them argue the contract has been breached and they are not bound by any post-termination restrictions.

• Introduce rights or obligations that deter employees from leaving.

There is a lot of scope here with the deterrent being that the employee is likely to lose out on cash or shares if they leave. For example, a long-term incentive plan may have a forfeiture clause triggered on the employee’s departure, a share plan may have its own restrictive covenants, a bonus payment may be dependent on being in employment on a specified date or subsidised training costs may become repayable on exit. While these types or arrangement have their own advantages in the war against competition, employers need to ensure that if challenged they would be able to demonstrate they are not an unreasonable restraint of trade or in the case of clawing back any training costs, the amount recovered would not be found to be a penalty.

Even if employers will not have as many options available to them in the battle against competition in the future, a broader more bespoke approach which reflects the nature of the business and its specific risks may achieve a similar outcome to that which can be achieved solely with post-termination restrictions.

FGS’ legal team are experts in helping its clients to safeguard their businesses, so that they have a greater certainty over their financial and operational outcomes.

If you require further advice about protecting your business from ex-employees’ new work activities or strategies to retain your talent, please feel free to call us on 0808 172 9322 for a no obligation discussion.

For further details about all our commercial legal services for businesses, please click here. 👇

Our Services

This update is for general guidance only and advice should be taken in relation to a particular set of circumstances.