Tax Memo: Income tax
12 April 2010

Employment Memo: Equality Act 2010 - Consolidation and harmonisation of inequality and anti-discrimination provisions still planned from October 2010
28 July 2010

The coalition Government has announced that it will bring into force the main provisions of the Equality Act 2010 which consolidate and harmonise the law relating to discrimination and inequality in October 2010.

Employment Memo: Additional paternity leave from April 2011 – New right for partners of those becoming pregnant from now on
28 July 2010
Regulations are in force confirming the details regarding the introduction of additional paternity leave for fathers of, and partners of mothers to, children due on or after 3 April 2011. Subject to qualifying conditions, additional leave can be taken once the mother has returned to work. The earliest that this leave may be taken will be 20 weeks after the birth, and it must end 12 months after the birth. The maximum length of leave which may be taken will be 26 weeks and the minimum 2 weeks. The leave must be taken in multiples of complete weeks and as one continuous period. Subject to qualifying conditions, fathers/partners of mothers may be able to receive statutory additional paternity pay, payable at the standard rate, for the remainder of the mother’s maternity pay period. Equivalent rules will apply to partners of adopters of children who are notified of the match on or after 3 April 2011.

Employment Memo: Age discrimination - Cap on contractual redundancy pay justified
28 July 2010
In this case, the claimant was entitled to a generous contractual redundancy payment scheme. Under its terms redundancy payments were capped at the amount of basic pay the employee would have received had they worked until retirement. The claimant argued that this had a disproportionate impact on those approaching retirement age. The Court of Appeal held that while this was so, the employer was justified in imposing a cap which prevented employees receiving a windfall which would leave them better off than if they had worked through to retirement.

Kraft Foods UK Ltd v Hastie [2010] UKEAT 0024_10_0607

Employment Memo: Bonuses - No implied term that employee must be in employment at date of payment
28 July 2010
In this case, a sales manager in the financial services sector was dismissed without notice. He brought proceedings for breach of contract seeking payment of a discretionary bonus in respect of the period up to his dismissal. The payment date for that period fell after the date of his dismissal. The employer resisted the claim, arguing that a term should be implied into the contract that an employee must be employed on the payment date to be entitled to receive the bonus. The High Court rejected this argument; the employer had not established any grounds for implying a term that he was not entitled to a bonus. In particular, it was not an obvious omission, nor necessary to give effect to the agreement, nor was there any evidence that the practice was customary in the City of London. Further, because the employer had not considered giving the claimant a bonus at all, it had not exercised its discretion and the court was therefore free to award such bonus as it thought fit.

Rutherford v Seymour Pierce Ltd [2010] IRLR 606, HC

Comment: This case demonstrates the importance of including an express term covering what is to happen to any bonus entitlement on termination of employment.

Employment Memo: Bonuses - Power to vary bonuses does not make in itself a scheme discretionary
28 July 2010
In another case on City bonuses, the Court of Appeal considered the effect of wording in a bonus clause which stated that “The Bank maintains the right to review or remove this formula linked bonus arrangement at any time” in a contract which provided for a one-off guaranteed bonus and also a contractually binding continuing performance-related bonus. The Court held that the words purporting to allow the employer to withdraw or vary the scheme did not have the effect of making the whole clause discretionary. It also found that a further contract given to the employee, which he never signed, was not binding on him as there was no evidence of his accepting it by conduct. Although he continued to work after he was given the new contract, no other factors had changed, and he should not be taken to have accepted the variation.

Khatri v Cooperatieve Centrale Raiffeisen-Boerenleenbank BA [2010] EWCA Civ 397

Employment Memo: Outing an employee may be direct sexual orientation discrimination or harassment
28 July 2010
In this case, a gay employee made a complaint of direct discrimination and harassment after he had been “outed” by a manager. He had moved to a branch of the employing organisation from one where he had himself been open about his sexuality. An employment tribunal found that a manager had deliberately set out to make his sexuality known against his wishes. The EAT found that, on the facts, there had not been enough evidence to support the claim, because the tribunal had failed to take into account the fact that the employee had been happy to be open about his sexuality at his previous workplace. However, it did comment that deliberately outing an employee against their will could constitute direct discrimination or harassment, where proved.

HM Land Registry v Grant [2010] IRLR 583, EAT

The Code is designed to ensure that shareholders of a company subject to a takeover bid are treated fairly. There is concern that this may not always be the case and that under the current regulation it can be too easy for a ‘hostile’ offeror company to obtain the requisite amount of control of the target company. Conversely there is concern that greater regulation of takeovers could prevent what is a legitimate commercial activity.

Comments on the issues raised are invited by 27 July 2010. Further details are available at:

http://www.thetakeoverpanel.org.uk/wp-content/uploads/2008/11/PCP201002.pdf

The Court of Appeal has recently clarified the position in relation to the registration of certain charges by companies. Companies are bound by the provisions of the CA 2006, which requires charges created by an instrument or document that, if executed by an individual, would require registration as a bill of sale to be registered at Companies House (s 860 CA 2006). The Court of Appeal confirmed that the Bills of Sale Acts, which require bills of sale executed by individuals to be registered with the High Court, are confined to individuals and do not apply to companies. Therefore, charges entered into by companies will not require separate registration at the High Court as a bill of sale.

Online Catering Limited v Acton and anor [2010] EWCA Civ 58

VAT Memo: Cross-border transactions: Incurring cross-border VAT
26 July 2010
The deadline for making claims under the new electronic 8th Directive procedures for VAT incurred in 2009 should be 30 September 2010. However, because some member states were slow to implement the new electronic procedures, the deadline has been extended on a one-off basis to 31 March 2011. European Commission press release, 16 July 2010