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aaronandpartner · 4 years ago

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‘Common Terms’ Threshold Met for Equal Pay Claims Against Asda

Asda Stores Ltd (Appellant) v Brierley and others (Respondents) [2021] UKSC

On 26 March 2021, the Supreme Court judges unanimously upheld the Court of Appeal’s decision in favour of the 35,000 predominantly female retail employees, confirming that their claims against supermarket giant, Asda, meet the threshold for the ‘common terms’ test, which must be met if the Claimant(s) is/are based at a different establishment to the comparator before an equal pay claim can proceed to be heard in the Employment Tribunal.

The successful ‘common terms’ test, set out in section 79(4)(c) of the Equality Act 2010, in this case essentially establishes that the retail workers would be on substantially similar terms if they were hypothetically doing the same job but based out of the distribution workers’ site, and vice-versa.

This decision at this stage does not mean that the Claimants’ claims for equal pay succeed, so watch this space for the Tribunal ruling which will determine whether the Claimants received less pay than a valid comparator for the same work in the six-year period prior to commencing proceedings in 2014.

Other supermarkets and comparable businesses could see similar claims being brought against them on the back of this ruling.

If you or your business require guidance on supporting the needs of employees with disabilities, or any other employment matter, please contact Tori Shepherd, who would be happy to assist.

Tori Shepherd

Employment

Solicitor Email: [email protected] Tel: 01743 296 251

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aaronandpartner · 4 years ago

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Granting Leave for Employee Holidays

Since the Prime Minister set out his roadmap in February to gently ease the lockdown restrictions in England, many are getting excited about the prospect of potentially having a holiday abroad this year.

Based on the current plans set out by the UK government, UK citizens may be able to holiday internationally from 17 May 2021 at the very earliest. Presently, anyone travelling abroad from England must complete a form to declare their reasoning for leaving the country, and any person found trying to leave the country without a legally permitted reason will be hit with a £5,000 fine.

With employees feeling hopeful and starting to book their summer holidays in advance, many businesses are left wondering what the effects of any potential quarantine periods will be if their employee is required to isolate on return from their holiday, and whether they will be required to pay their employee’s wages during this time.

What practical considerations do employers need to have in mind when approving annual leave for international holidays?

The main issue that a business needs to consider when approving annual leave requests for international holidays is the length of the required quarantine periods on return from the country that their employee will be visiting.

The required quarantine periods afforded to each country are constantly changing and may be removed completely by the time your employee is set to go on holiday, but just in case they aren’t, as an employer you need to be aware of these periods so that you can manage the effect of any employee being out of office during this time potentially unable to work (if they are unable to work from home) and understand your obligations when it comes to paying them.

If your employee works in an area that does not qualify for travel restrictions and they are going abroad solely for personal leisure purposes, then they are likely to have to quarantine for a period of up to 10 days on return from their holiday.

What are the quarantine restrictions in place currently?

Currently, the UK has a complete travel ban on counties on the ‘red’ list. The result of this is that if any of your employees visit one of the countries on the red list, they will be required to quarantine for 10 days on their return to the UK in a government approved hotel. If your employee is an overseas migrant and has no residence rights in the UK, they will be refused entry completely.

There are many popular tourist destinations on this list, including countries such as Argentina, South Africa and the UAE. The list is continually changing, and it is advisable for employers to regularly check it to ensure that they are aware of the up-to-date guidance. The full list can be found online at: https://www.gov.uk/guidance/transport-measures-to-protect-the-uk-from-variant-strains-of-covid-19

For countries not on the red list, employees are still required to quarantine for 10 days albeit not in a government approved hotel. They must take a covid-19 test on day 2 and day 8 of their isolation period. This again will mean that it is likely that they will be unable to attend their place of work following their holiday, depending on the rules in place at the time of their return.

Does an employer have to pay an employee for quarantine periods following their holiday?

There is no black or white answer on whether an employer will be required to pay an employee their wages for any period they are required to remain in isolation following their holiday abroad. It will depend on the individual circumstances of each matter.

If the employee is a home worker or can effectively work from home during this period, and the requirement to isolate doesn’t affect their roles or responsibilities, then they will be able to work during this time as normal and you will be required to pay them. The issues begin to arise if the employee cannot work from home.

Due to the length of the required quarantine period typically being around 10 days and many workplaces having a restriction on employees taking more than 10 working days of annual leave consecutively, it is likely that most employees will have insufficient annual leave to cover both their holiday and the following quarantine period.

If this can be done and the employee can cover their isolation period with annual leave, for example:

if the employee had a very short trip abroad and they can fit the quarantine period in their annual leave allowance;

if the quarantine period has been reduced since the date of this article; or

if you don’t have a restriction on consecutive annual leave days

then it is advisable that this is the best way to deal with employee quarantine time. The employee can take this time as annual leave and be paid as they usually would during this time off work.

Furthermore, if there is a 10-day restriction in the annual leave policy and the employer is willing to amend this to allow an employee to use up additional annual leave over and above the usual 10-day restriction (although it may mean that they are off work for a considerable amount of time) it is also advisable to deal with it in this way.

If an employee is not able to work from home and they are unable to use annual leave to cover this quarantine period for any reason, it may be the case that they could agree to take unpaid leave during this time. Of course, the other options are preferable and reduce the risk of any employment claims but if these are not possible then unpaid leave should be reviewed.

If the requirement to quarantine following departure from a certain country was not in place at the time that the employee booked their holiday, we would advise that employers use their discretion as to whether this employee is paid for their period of isolation as it may be unfair to withhold payment for a quarantine period that they were not aware of at the time of booking.

If you have any questions about paying employees for their quarantine periods or any other employment issues related to covid-19, please contact our employment law experts for their assistance.

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aaronandpartner · 4 years ago

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Can employers require workers to have a COVID-19 vaccination?

Vaccinations are currently a huge talking point and with many NHS and other workers being required to have it, there is a question in the minds of many individuals working in other sectors outside of the health sector:

“Can my employer require me to have a COVID-19 vaccination and prevent me from working if I don’t?”

Why would an employer adopt a ‘no jab, no job’ policy?

It has been a hot topic of conversation over the last few weeks that company Pimlico Plumbers have put in place a ‘no jab, no job’ policy, requiring their workers to have the COVID-19 vaccination should they work in a client facing position. If the worker refuses to have the vaccination or cannot show proof of vaccination, they are refused the work. They now appear to be inserting provisions into their contracts to reflect this.

This news has left a lot of workers nervous, concerned and questioning whether they will also be placed under the same pressure from their employers, and what will be the consequences if they refuse to have the vaccination.

Whether it is appropriate for an employer to adopt a vaccination approach like that of Pimlico Plumbers will depend on the type of work that the worker undertakes, and the level of client facing exposure that they may have.

For example, if workers come face to face with individuals in the most medically vulnerable categories, it is more likely that an employer will put in place a policy along these lines. Also, if the worker is required to continuously work in publicly accessible places where they are likely to come into contact with members of the public, it is likely that an employer may be considering adopting some form of COVID-19 vaccination policy.

Can an employer put in place a vaccination policy?

A company may decide that it wishes to put in place a vaccination policy. Before doing so, we would strongly recommend that consideration is given to:

Why is the policy required?

Are some, or all, of the workers client facing?

What concerns may arise from workers in respect of such a policy and how could they be addressed?

Would vaccinations be required for all individuals?

What other COVID-19 measures have been put in place to minimise the risk of infection and are these working?

How many workers have already received the government vaccination?

Should the vaccination policy be compulsory or voluntary?

Is it reasonable to put in place a vaccination policy?

Are some workers likely to have medical reasons preventing them from having the vaccine?

Businesses have an obligation to weigh up the needs of their workers against the needs of the business and, provided they have carried out a proper risk assessment, may be able to argue that the protection of their staff and customers/clients is of overriding importance to them. No one size policy should fit all organisations and whilst a vaccination policy may be appropriate in one organisation, this does not mean it is appropriate throughout every business. We would strongly recommend taking advice before putting in place a compulsory vaccination policy for all staff.

When deciding whether to adopt such a policy, an employer must also have consideration to the rights of their workers. A requirement to undergo medical treatment (such as a vaccination) may amount to interference with the workers right to respect for private life. For this interference to be justified, there must be a legitimate aim in requiring the vaccine. A business could argue that their legitimate aim is the need to protect the health of the public, but whether this will be accepted by the courts will be based on the specific circumstances of the matter and these circumstances will be heavily scrutinised. The courts will not view any claims of this nature lightly, and there could be serious consequences for any business breaching the human rights of their workers. Again, we would highly recommend seeking legal advice on this matter before issuing any vaccination requirements throughout the company.

Can a worker object to the policy?

Workers may have concerns about a vaccination policy. Consideration should be given to the queries above and whether, having undertaken a risk assessment, vaccinations is still considered to be appropriate for the industry. If a worker raises any concerns, it would be appropriate to discuss this with them informally. Workers personal concerns over having vaccines, whatever the reason, should be considered. Businesses should explain their reasoning for putting in place a vaccination policy, whether it is applicable to all workers in the business and provide information on the risks and benefits of the vaccination that they are basing their decision on.

Can a worker be refused work or dismissed if they object to a vaccination?

If a business wishes to dismiss an employee because of their refusal to have the vaccine, then the employer will have to follow the normal fair dismissal procedures and have a potentially fair reason for dismissal. There are five potentially fair reasons for dismissal, and an employer must be able to argue that an employee’s refusal to have the vaccination falls into one of these. The five reasons for dismissal are: capability, conduct, redundancy, illegality or ‘some other substantial reason’. Of course, as this pandemic is unprecedented, there is not much case law surrounding this matter, but it is likely that an employer may state that any dismissal based on the grounds of a refusal to have a vaccination could fall under conduct, capability or some other substantial reason for dismissal.

We would stress that whether a dismissal is fair would come down to the individual facts and whether, considering the nature of the business, it is reasonable to insist on a vaccination and/or for the employee to refuse one. For example, an employee who cannot have a vaccination for medical reasons may also be protected under the Equality Act 2020 and a dismissal may amount to disability discrimination if the vaccination cannot be objectively justified. Consideration should also be given to refusals by pregnant workers. Public Health England has advised that those who are pregnant, or who are planning a pregnancy within three months of the first dose, should not yet have the vaccination. Such employees are likely to be protected from maternity discrimination under the Equality Act 2010 if they are dismissed, or subject to a detriment for refusing to have a vaccine.

If the role is client facing, particularly working with vulnerable individuals and there is no alternative to this, then an employer may be able to rely on a refusal to abide by the policy as grounds for dismissal.

In respect of workers, whether they can be refused work will come down to the contractual arrangements and again could still give rise to a potential disability discrimination claim.

Will a worker or employee have a claim if they are dismissed or refused work?

How the courts will react to any cases of this nature, we do not yet know. As stated above, this pandemic is unprecedented and the case law on similar issues is extremely limited. If many companies do decide to adopt the ‘no jab no job’ approach though, there is expected to be an influx of unfair dismissal cases, discrimination on the grounds of age, sex, disability, religion, breach of human rights and other employment tribunal matters as a result of employees being dismissed and/or employees resigning over the policy or refusing to provide work.

Provided the organisation can show that they have reviewed the needs of the employee or worker against the needs of the business, then they may potentially be able to defend potential claims.

If your employer has put in place a ‘no jab no job’ policy and you believe it to be unreasonable, we can discuss your situation with you and assess whether your claim has any merits.

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aaronandpartner · 4 years ago

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National Minimum Wage and National Living Wage set to increase from 1 April 2021

The Government will increase National Living Wage (‘NLW’) and National Minimum Wage (‘NMW’) from 1 April 2021 in line with the recommendations made by the Low Pay Commission.

Significantly, the age threshold for receiving NLW has been lowered to 23 for the first time. We address the key points here.

Q1: Who is entitled to the minimum wage?

NMW and NLW set out the minimum rate a ‘worker’ is entitled to receive for each hour worked.

Whether a worker receives NMW or NLW depends on which age bracket they fall into and whether they are an apprentice. The NMW currently applies to under 25s and the NLW currently applies to workers aged 25 and over. It is a legal requirement for employers to pay workers the minimum amount on average for the hours worked.

The minimum rates listed are before tax, national insurance and pension contributions have been deducted.

Q2. So, what are the new NMW rates?

The NMW rates will increase as follows:

Category Old Hourly Rates from 1 April 2020 New Hourly Rates from 1 April 2021 Increase 21 – 22 year old £8.20 £8.36 2.2% 18 – 20 year old £6.45 £6.56 2.0% 16 – 17 year old £4.55 £4.62 1.7% Apprentice £4.15 £4.30 3.6% Accommodation Offset £8.20 £8.36 2.0%

Q3. What is the new NLW?

The NLW will increase by 2.2 % from £8.72 to £8.91 and will now be available to workers aged 23 and above. This will be a welcome change for young workers who have faced a difficult year. Young people have been the most economically affected due to the pandemic, with lower average earnings and higher unemployment rates. The ONS recently reported that 18 to 24 year olds have seen the greatest decrease in payrolled employees since February – more than any other age group. The lowered threshold would offer greater protection to young workers seeking employment as the group is identified as being more exposed to employment risks related to pay.

Q4. Why has the age threshold lowered?

Businesses may question the new changes considering they are operating under great uncertainty and many are struggling financially due to disruptions related to the pandemic. Added to this, the changes could mean businesses will have to make further difficult decisions as they no longer can afford to pay the new rates.

In their press announcement, the Low Pay Commission addressed these concerns stating that “recommending the minimum wage in the midst of an economic crisis coupled with a pandemic [was] a formidable task”. The commission strook a balance between ensuring businesses are not pushed into insolvency against recognising the contributions of low paid workers by ensuring they receive enough to keep them above the poverty line.

Q5. What happens if an employer is non-compliant?

HMRC have a wide range of enforcement powers including mandatory recovery of underpayments in the employment and civil courts as well as criminal prosecution. Getting it wrong can be costly. Fines increase over time in line with the rise in NMW and NLW. The fines are currently subject to the maximum cap of £20,000 per each affected worker however this amount could be considerably higher for larger companies with historic issues of underpayment.

The Government announced in February last year of their intention to reinstate the “naming and shaming” scheme where they publish details of employers that have been issued with a notice of underpayment by HMRC. The aim of the scheme is to incentivise employers to accurately calculate and pay the minimum wage and to enable workers to make an informed choice when choosing who to work with. Whilst there doesn’t appear to have been much output over the last year, the scheme acts as an extra incentive for employers to remain compliant as it could affect their ability to attract staff.

It is worth noting that NMW/NLW claims usually arise not because the employer is not paying the correct amount per hour but because the worker ends up working more hours than they get paid – meaning their average pay falls below the minimum rate. Certain sectors such as retail and manufacturing are more likely to fall foul of this, as workers tend to work extra hours which are not always accounted for in their pay.

Q6. What action should employers take considering the new changes?

Undertake a detailed audit of pay and working practices and, if necessary, amend in line with the new minimum wage rates.

Update policies to ensure workers are receiving the minimum wage on average when calculating their overall working time. Calculating working time can be a tricky area as it is not as simple as calculating the time a worker spends doing their job. Training, security checks before or after the job, waiting time to collect goods or travelling in connection of work (such as to customer meetings) all counts as working time. Workers ‘on-standby’ or working in unpaid breaks can bring up further complications which employers need to carefully consider.

Keep and maintain records documenting the hours worked by and payments made to, workers. A failure to do so is a criminal offence. These records should be kept for at least 3 years and be made available to HMRC enforcement officers and to any worker who makes a request. Keeping detailed and accurate records wins claims. For unless an employer can prove the contrary, it will be presumed that the worker has not been paid at least the minimum rate.

Paul Hennity

Employment

Associate Email: [email protected] Tel: 01244 405 431

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The post National Minimum Wage and National Living Wage set to increase from 1 April 2021 appeared first on Aaron & Partners.

from Aaron & Partners https://www.aaronandpartners.com/national-minimum-wage-and-national-living-wage-increase-2021/

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aaronandpartner · 4 years ago

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Key Employment Changes from April 2021

Cap on Public Sector Exit Payments Scrapped

Following an extensive review, the Government has scrapped the cap on public sector exit payments after finding it had “unintended consequences”.

The Restriction of Public Sector Exit Payments Regulations 2020, which came into force on 4 November 2020, set a £95,000 cap on exit payments for public sector authorities and offices listed in the Schedule to the Regulations.

Critics argued that the scheme had the potential to generate additional litigation as individuals could be awarded a greater amount by an Employment Tribunal. Moreover, long-serving employees could receive a lowered company pension if made redundant.

The Government has advised employees affected by the cap to contact his or her employer directly to request additional sums they would have received had the cap not been in place. Employers are also encouraged to proactively pay former affected employees the outstanding monies owed.

IR35 Regulations

The proposed reforms to the IR35 off-payroll working were postponed to 6 April 2021. It is likely that businesses will call for changes to IR35 to be delayed further, however, at the time of writing, they are still set to come into effect in April.

The new rules were introduced to tackle tax avoidance. HMRC noticed individuals were supplying their services through a personal service company (‘PSC’) in order to avoid paying income tax and national insurance contributions.

From 6 April 2021, companies engaging with PSCs in the private sector will be responsible for determining an individual’s employment status for tax purposes and must pay tax based on their self-assessment. Only companies classified as ‘large’ under the Companies Act 2006 will be caught by the new reforms.

Employers should scrutinise their self-employment contracts to ensure they reflect the true nature of the working relationship. HMRC have created a CEST tool, found on the uk.gov website, to help employers determine an individual’s employment status for tax purposes. It is strongly recommended for affected companies to run this tool on all self-employed staff and keep a record of the results. This would act as good evidence that a company has considered an individual’s worker status.

However, it is important to note that the CEST tool is not failproof and is used for guidance in determining employment status and therefore companies should seek legal or tax advice if they are uncertain about an individual’s employment status.

HMRC CEST Tool

To learn more on how to effectively prepare for IR35 then please see our IR35 Q&A here

Gender Pay Gap Reporting Delayed

The Equality and Human Rights Commission (ECHR) has confirmed that the gender pay gap enforcement action has been delayed for a further six months until 5 October 2021 due to the COVID-19 pandemic.

The Gender Pay Gap Regulations (‘Regulations’) require employers with 250 or more staff to report their gender pay gap – being the difference between the average earnings of men and women.

Under the Regulations, public sector and private sector employers would have been required to submit reports by 30 March and 4 April respectively.

The ECHR strongly recommend for all employees to submit their data for 2020/2021 before October 2021 where possible.

See the Government Equalities Office guidance here.

Changes to calculating Post-Employment Notice Pay

The Government has announced two new changes to the Post-Employment Notice Pay (‘PENP’) with effect from 6 April 2021. These changes will impact the termination payments made by employers to terminated employees.

Non-UK resident employees employed by UK employers will now be subject to UK tax and national insurance deductions. The new measure aligns the position for UK and non-UK resident employees.

There is an alternative PENP calculation for monthly paid employees whose notice pay is defined in weeks, days or where employees work some but not all of their notice period. The aim is to ensure consistency across calculations.

For more guidance please visit UK Gov website.

NMW and NLW Increased

The Government has accepted the recommendations of the Low Pay Commission regarding changes to the National Living Wage (‘NLW’) and National Minimum Wage (‘NMW’) from 1 April 2021.

The NLW will increase by 2.2 % from £8.72 to £8.91. This shall be available to workers aged 23 and above as the age threshold has been lowered from 25 and above, as it is currently. Young people have been the most economically affected due to pandemic therefore the lowered threshold will offer greater protection to young workers seeking employment.

The NMW rates will also increase as follows:

from £8.20 to £8.36 per hour for 21 to 22 year olds.

from £6.45 to £6.56 per hour for 18 to 20 year olds.

from £4.55 to £4.62 per hour for 16 and 17 year olds.

from £4.15 to £4.30 per hour for apprentices.

Paul Hennity

Employment

Associate Email: [email protected] Tel: 01244 405 431

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No National Minimum Wage for sleeping ‘sleep-in’ workers

The long-awaited Supreme Court decision on ‘sleep-in’ worker pay has today been handed down in the Judgments in the linked cases Royal Mencap Society (Respondent) v Tomlinson-Blake (Appellant) and Shannon (Appellant) v Rampersad and Others (Respondent).

After a full year since the hearing, and following the sad passing of Lord Kerr, the Supreme Court has finally released the Judgment of the four remaining Judges, confirming that residential care workers who ‘sleep in’ are not entitled to the national minimum wage (“NMW”) for time that is not spent actually awake performing some specific activity.

This Judgment will be a relief for employers in the residential care sector particularly but may come as quite a blow to care sector workers and Unions.

The facts

Tomlinson-Blake appeal

Mrs Tomlinson-Blake provided residential care to two adults with autism and substantial learning difficulties. Her usual work pattern involved a day shift and a morning shift, for which she received appropriate salaried remuneration. She also carried out a 10pm – 7am sleep-in shift, for which she received a payment of £22.35 plus one hour’s pay of £6.70.

Although Mrs Tomlinson-Blake didn’t have to carry out any specific work, she had to keep out a “listening ear” for emergencies, in her own words. On the few occasions, she had to provide night-time support, 6 times in a 16 month period, the first hour was not remunerated but she received payment in full for any additional hours thereafter.

Her claim in the Employment Tribunal was successful – determining that she was entitled to be paid for all hours whilst she was ‘sleeping-in’, which were held to be working time for NMW calculations. The Employment Appeal Tribunal supported this decision, but on further appeal by Mencap, the Court of Appeal overturned it.

The Supreme Court has now followed the Court of Appeal’s Judgment.

Shannon appeal

Mr Shannon was employed as an “on-call night care assistant”. He was paid £50 a week (later £90) with free accommodation in the studio within the Clifton House care home. He was required to be in the studio from 10pm to 7am and was able to sleep during those hours but had to respond to any request for assistance by the night care worker on duty at the home.

In practice, he was very rarely asked to assist the night care worker, though he occasionally had day jobs as a driver.

His claim was that he was entitled to have all hours between 10pm and 7am counted as salaried hours work for minimum wage purposes for 365 days per year, amounting to almost £240,000 in arrears. His claim has been dismissed by all levels of Tribunal and Court and the Supreme Court have now affirmed the decision that Mr Shannon is not entitled to NMW.

Rationale

The Supreme Court referred to the National Minimum Wage Regulations 2015 and the National Minimum Wage Act 1998. The regulations provide that, in general, time when a worker is required to be available at or near his employer’s place of business for the purposes of doing time work, is included in calculating time work and salaried hours work but there are exceptions: (1) where the worker is permitted to sleep during the shift and (2) where the worker is at home.

In considering the meaning of this legislation, Lady Ardern gave weight to recommendations by the Low Pay Commission (“LPC”), a statutory body set up by the National Minimum Wage Act 1998, with relevant industry knowledge and expertise.

The LPC recommendation was published in their first report and has been repeated in subsequent reports, to the effect that sleep-in workers should receive an allowance and not the NMW unless they are awake for the purposes of working.

Lady Ardern, therefore, noted her view that previous decisions about sleep in worker pay, including Burrow Down Support Services Ltd v Rossiter [2008] ICR 1172, British Nursing Association v Inland Revenue [2002] EWCA Civ 494 (“British Nursing”) and Scottbridge Construction Ltd v Wright [2003] IRLR 21 were wrongly decided and should be overruled.

Accordingly, sleep-in workers are not entitled to receive NMW for any shifts slept through, though if they are required to carry out any work during the night, as before, their time should be paid for and NMW rules will apply.

“This long awaited judgment, announced on #WorldSleepDay comes as a welcome decision for many employers in the care sector. Employers should be ensure that time spent working on sleep in shifts is recorded in order that NMW is paid for that proportion of the shift”

Claire Brook

Employment

Partner Email: [email protected] Tel: 01244 405575 / 07912 781631

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Aaron and Partners complete 2,300 miles in salute to Captain Sir Tom Moore

Solicitors from the Chester-based law firm each ran, walked or cycled 100 miles during February to raise over £1,000 for Claire House and Hope House Children’s Hospices.

A team of solicitors from a Chester-based law firm have clocked up more than 2,300 miles as part of an effort to raise much-needed funds for two children’s charities

With five of the firm’s specialist departments taking part in the challenge, individuals committed to the challenge of walking at least 100 miles during February in memory of Captain Sir Tom Moore, who famously completed 100 laps of his garden last April ahead of his 100th birthday.

The firm collectively completed 2,332 miles with team members walking, running and cycling the distance, while also raising more than £1,000, which will be split between Claire House Children’s Hospice and Hope House Children’s Hospice.

Helen Watson from Aaron and Partners said: “As a firm we were inspired by the determination shown by Captain Sir Tom Moore, and so we decided to set ourselves a challenge that would honour his memory and raise vital funds for two charities that mean a lot to our teams.

“It was a tough challenge, but it’s been fantastic to see so many members of the team get involved. Not only were we able to raise an impressive amount of money for Claire House, but we were also able to bring our teams together at a time when many people are feeling isolated and alone.”

Claire House is a Wirral-based charity that looks after seriously and terminally ill children and helps them live life to the full by creating wonderful experiences and bringing back a sense of normality to family life.

“Charities have really felt the impact of this pandemic with most fundraising events having to be postponed or cancelled,” added Helen Watson.

“Claire House is an amazing local charity, that provides support to terminally ill children, and their families during their most challenging times. We’ve supported the charity for a number of years, and we hope that the money we have raised during this challenge will go some way towards ensuring they can continue the important work that they do.”

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Guidance for Clinically Extremely Vulnerable

Yesterday, the Government issued a new letter to all people in the Clinically Extremely Vulnerable list who are currently being advised to shield.

This letter explains that, from 1 April 2021, those to whom this applies are no longer advised to shield. It also states that until the social distancing rules are eased more widely, it is important to continue to keep the number of social interactions they have low and to reduce the amount of time spent in social settings where social distancing is unable to be maintained.

Whilst the letter confirms that those in this category may still be eligible for the further extended Coronavirus Job Retention Scheme (furlough) and Self-Employment Support Allowance, it states that they will no longer be eligible for Statutory Sick Pay or Employment and Support Allowance on the basis of being advised to shield.

This letter reiterates that everyone is advised to continue working from home where possible, but if they cannot do so, they should now attend their workplace. It also confirms the obligation upon employers to take steps to reduce the risk of exposure to COVID-19 in the workplace and that employers should be able to explain to staff the measures which have been put in place to keep everyone safe at work.

A copy of the letter can be found here.

For more information on COVID-19 guidance or for assistance with any other employment matter, please contact a member of the Employment Team.

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Latest Trade and Economic Data Published

Exports to the EU were down 40% in January and imports from the EU fell by 28.8% compared with December according to the first official figures by the Office for National Statistics (“ONS”) since the introduction of new trading rules with the European Union.

There is some evidence from the ONS that this had picked up by the end of the month but it is too early to tell.

Liz Martins, UK economist for HSBC and a regular presenter at Chester BID’s Professionals In Partnership events hosted by Aaron and Partners, was speaking about this on Radio 4 this morning.

She said that it was very hard to tell what we were going to get in these official numbers because what we’ve been told was the companies have done a lot of stockpiling prior to the end of the year and the new regulations coming in so, therefore, they didn’t do a lot of trade with the EU at the beginning of the year. However, she still thinks these numbers are quite dramatic.

There has been a slew of data out this morning with the GDP figures for January. Liz explained the consensus of economists thought we were looking at a 5% fall so the fact the UK economy shrunk by 3% last month is a smaller fall than expected especially given that it was during a lockdown. By way of comparison, in April 2020 the level of activity was 24% lower than pre-pandemic. In January, with a similar level of closures and restrictions, it was just 9% lower than before Covid so the economy becomes much more resilient and companies have learnt to do things remotely and smart ways around the restrictions. Accordingly, the fall has been smaller than expected.

Construction was the only sector of the economy that didn’t shrink in January and, unsurprisingly, services such as hospitality were most affected. Liz thought the construction sector isn’t necessarily affected by the restrictions as sites weren’t closed, they can be run in line with the regulations and much work is outdoors but, even so, for that sector to rise is impressive. However, there were big falls in manufacturing which probably also related to Brexit and in-services with the current closure of shops and restaurants.

Emma McGlinchey

Real Estate

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Arbitration in Family Law after Haley

The recent decision in the Court of Appeal in the case of Haley v Haley [2020] has confirmed the basis on which an arbitral award may be challenged/appealed.

Whilst the decision has been welcomed by many, for others it represents a shift away from one of the fundamental tenets and principles of the arbitration process.

The parties in Haley had been engaged in financial remedy proceedings. One week before the Final Hearing was due to be heard in Court, they were informed that no judge was available. In an effort to avoid further delay, Mr and Mrs Haley opted to engage an arbitrator and held a final arbitration hearing instead of waiting for another court date, potentially months ahead.

Following the decision of the appointed arbitrator, Mr Haley submitted an application to the High Court seeking to appeal the award. In the alternative, Mr Haley asked the Court to decline to make an order in the terms of the arbitrator’s award and instead substitute their own decision. Mr Haley’s application was dismissed by Deputy High Court Judge Ambrose. The judge refused to amend the arbitrator’s award, instead making an order of the court in mirror terms.

Mr Haley submitted an appeal to the Court of Appeal. The key consideration of the appeal was what is the correct legal test to be applied when a party makes an application to challenge an arbitral award. In making their decision, the High Court had applied the test under section 69 of the Arbitration Act 1996. To challenge an award under section 69, the party must be able to show that the award was ‘obviously wrong’. Whether the award is ‘fair’ is not a consideration for an appeal brought under s69.

In the alternative, the Court of Appeal considered whether the ‘appeals test’ as set out within the Matrimonial Causes Act 1973 (‘MCA 1973’) might be the correct test. Whilst permission is still required to appeal the arbitral decision, the threshold for meeting the grounds for appeal is much lower. The appellant must show that the decision was ‘wrong’, not the higher test of ‘obviously wrong’ or alternatively that the decision was unjust or unfair. The overall fairness is a key consideration for the Court under this part of the appeal test.

Having considered case law and commentary in other decisions relating to arbitration in the family law context, the Court of Appeal concluded that the correct test was that set out in the Family Procedure Rules 2010. Giving their determination, Lady Justice King commented:

“The court will…only substitute its own order if the judge decides that the arbitrator’s award was wrong; not seriously, or obviously wrong, or so wrong that it leaps off the page, but just wrong.” (paragraph 74).

Their decision reflects the Family Court’s approach to sealing and approving other forms of Orders reached through so-called ‘alternative dispute resolution’ procedures such as mediation or collaborative law. The Court does not act as a ‘rubber stamp’ to agreements or processes outside of the court’s ambit and they retain the discretion to amend or refuse Orders submitted by parties for approval under the MCA 1973.

Arbitration in Family Law

Arbitration is a relatively new alternative dispute resolution method, having been introduced to the family law context in 2012. Arbitration had been used successfully in the commercial law arena for many years. Arbitration offers an alternative manner by which parties can resolve their differences outside of the court.

An arbitrator is jointly appointed by the parties and will sit as ‘judge’, considering the facts of the case and any points of dispute between the parties. Following a series of meetings, they will make an arbitral award, which is then embodied in a Consent Order and submitted to the Court for approval. Arbitration is commonly seen as a popular option for ‘big money’ cases, but it can be a helpful tool in a range of matters. Cases can be resolved in a short period of time as they are not dependent on the court’s timetabling which has been under great pressure for many years. Parties retain control, being able to agree on the identity a suitable arbitrator, determine the extent of the matters to be decided by the arbitrator, and setting a timetable and location for the matter which suits them rather than the Court.

Parties entering arbitration must sign an agreement, known as a Form ARB1FS. Signing the form indicates that the parties agree to be bound by the arbitrator’s decision. The form currently includes the following wording: ‘Arbitration is a process whose outcome is generally final. There are very limited bases for raising a challenge or appeal, and it is only in exceptional circumstances that a court will exercise its own discretion in substitution for the award.’ Before the decision in Haley the accepted approach was that arbitral awards could only be challenged in very limited circumstances (obviously wrong). The Court of Appeal commented that the wording on the Form ARB1FS goes too far. The current wording of the form is likely to be updated to reflect the approach taken by the Court of Appeal in Haley.

The decision of the arbitrator must be embodied within a Consent Order, submitted to the Court for approval and sealing before it is binding on the parties. Whilst the Court retains the discretion to amend a Consent Order, they are generally reluctant to refuse to endorse an Order which reflects the terms of an arbitral award, absent any challenge by one of the parties.

Arbitration after Haley

The decision in Haley represents a significant shift in the approach of the Family Court to challenges to financial remedy awards where the parties have been engaged in arbitration. It will, in theory, become easier for a dissatisfied party to challenge such an order. The threshold for challenge is now much lower, with a party simply needing to show that the decision is simply ‘wrong’, unfair, or unjust, rather than ‘obviously wrong’. The ability to challenge an award may make arbitration a more attractive option for some. The restricted grounds on which to challenge an arbitral award may have put off parties who did not wish to take the risk of being presented with an outcome which they perceived to be unfair and which had an exceptionally high threshold for challenge. For others however, it may represent an increased risk that an arbitral award may not provide the finality it would have done before the Court of Appeal’s decision.

Arbitration offers a relatively cost-effective, time efficient, private, and flexible manner by which to resolve matters in the Family law context. Appointed arbitrators are renowned, specialist practitioners in their fields. The Covid-19 pandemic continues to impact upon the Court’s ability to process and manage matters in a timely way, with a significant backlog being reported. Stressed and busy Judges often are not the best decision-makers. For parties who wish to resolve their matter outside of the Court context, arbitration may still offer a suitable option for resolution regardless of the limitation imposed by Haley. Further details relating to arbitration in the family law context can be obtained from the Institute of Family Law Arbitrators (IFLA), or from a specialist family solicitor.

Aaron & Partners LLP have a specialist Family Law department who can offer advice and guidance on a range of family law matters, including advice and representation in arbitration or financial remedy proceedings. If you require any advice or assistance relating to a family law matter, then contact Richard Barge, Partner and Head of Family Law at Aaron & Partners.

Richard Barge

Family Law

Partner and Head of Team. Email: [email protected] Tel: 01244 405443 / 07881 950769

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Coronavirus Job Retention Scheme – 2021 Update

As part of the 2021 Budget, Chancellor Rishi Sunak announced on Wednesday that the Coronavirus Job Retention Scheme (CJRS) will be further extended to the end of September 2021.

The Chancellor has now confirmed that the furlough scheme will be extended until 30 September 2021, with employer contributions increasing from July 2021.

Changes to Contributions

Up until 30 June 2021, the scheme will continue with its current rules with the Government paying 80% of workers’ salaries up to the value of £2,500, as has been the case since the scheme kicked off in March 2020.

From 1 July 2021, this contribution will change and the Government grant will be reduced. Employers will be required to make a 10% contribution towards this cost throughout July. From 1 August 2021, this contribution will be increased to 20% until the scheme is due to end on 30 September 2021. Although the contributions from both the Government and the employer will change, the employee will still receive 80% of their salary (up to a maximum of £2,500 per month) for hours not worked.

The table below sets out the updated levels of Government and employer contributions per month, and the relevant caps that they are subject to:

Up to and Including June July August September Government Contribution 80% up to £2,500 70% up to £2,187.50 60% up to £1,875 60% up to £1,875 Employer Contribution N/A 10% up to £312.50 20% up to £625 20% up to £625

Which Employees Can Use The CJRS Scheme?

We have previously drafted an article detailing who can use the scheme, which you can find here, but we have set out the main changes to the rules below.

For any period starting on or before 30 April 2021, the rules have not changed. However, for any period starting on or after 1 May 2021, an employer can claim for an employee who was employed on 2 March 2021, so long as they have made a PAYE RTI submission to HMRC between 20 March 2020 and 2 March 2021, notifying a payment of earnings for that employee. It is important for employers to note that they do not need to have previously claimed for an employee before the 2 March 2021 to claim for periods starting on or after 1 May 2021.

Fixed Term Employees

For periods starting on or before 30 April 2021, we have detailed the rules in our November 2020 article which can be found here. For periods starting on or after 1 May 2021, an employer can place an employee on furlough as long as they were employed on 2 March 2021, but only if the employer has made an RTI submission to HMRC between 20 March 2020 and 2 March 2021.

Employee transfers under TUPE and on a change in ownership

As above, if an employer is claiming for a period between 1 November 2020 and 30 April 2021 and they employ someone who was transferred from another business, they can claim under the normal rules which we have detailed in our article here.

However, the updated rules state that an employer can claim for employees transferred on or after 1 January 2021, on the condition that those employees are or were:

employed by the old employer on or before 2 March 2021;

transferred from their old employer to their new employer on or after 1 January 2021; and

included on an RTI submission to HMRC by their old employer, between 20 March 2020 and 2 March 2021.

The Gov website has set out detailed criteria for those employees that qualify for use of the scheme, and this can be found at: https://www.gov.uk/guidance/check-which-employees-you-can-put-on-furlough-to-use-the-coronavirus-job-retention-scheme.

Claiming for Employee Wages

If an employer wants to make a claim for wages for those employees who have been placed on furlough or flexible furlough, they can do this through the Gov website at: https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme.

To claim for days in any particular month, claims must be submitted by 11.59pm 14 calendar days after the month you are claiming for. If this time falls on the weekend or a bank holiday, then claims should be submitted on the next working day.

The table below details the deadline for making a claim for wages in any given month:

To claim for furlough days in: The claim must be submitted by: February 2021 15 March 2021 March 2021 14 April 2021 April 2021 14 May 2021 May 2021 14 June 2021 June 2021 14 July 2021 July 2021 16 August 2021 August 2021 14 September 2021 September 2021 14 October 2021

Further details relating to the extended CJRS and the eligibility criteria are available on the government website on the link set out in this article. If you require further information about the CJRS or any other Employment Law related matter please contact a member of our Employment Team.

Debbie Coyne

Employment

Senior Associate Email: [email protected] Tel: 01244 405 537 / 07870 365 050

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2021 Spring Budget: What do businesses need to know?

The Spring Budget has always been a key date in my diary, but for myself and many others, this year’s speech was more important than ever.

As a corporate finance lawyer, I support clients with financial transactions such as buying and selling businesses, shareholder arrangements and business finance where I act for both companies and for lenders or investors. This year I’ve seen first-hand some of the devastating impacts, and also the unique opportunities that this pandemic has caused but with the easing of lockdown restrictions over coming months, this year’s Budget was the time for the government to outline the UK’s road to recovery.

The government has had to face balancing protecting people’s health, with saving jobs and supporting the economy and as a result, borrowing is at the highest level it’s been since wartime. We know that money is needed by the government, but after such a challenging year it felt too soon to be raising taxes.

In a recent survey, people were asked “raise taxes” yes or no, “cut spending “yes or no” – and unsurprisingly they said no to both! Having considered this year’s speech, I believe the Chancellor has steered a good line in the circumstances, but the best help is going to be getting the vaccine out, lockdown over and the economy back open.

What can we take from this year’s Budget?

During his speech, Rishi Sunak outlined a three-part plan towards economic recovery which focused on supporting British people and businesses, fixing the public’s finances and building the UK’s future economy.

The Chancellor announced a raft of new measures during his speech, but these are the ones I believe to be the key takeaways.

Financial support for businesses

As the pandemic has evolved, so has the financial support provided by the government. At Aaron and Partners, we’ve personally helped several businesses secure finance through the Future Fund scheme as well as through the Coronavirus Business Interruption Loan Scheme (CBILS) over the last few months and we know they have successfully provided support to many businesses across the country.

However, the current government-backed loan schemes finish on 31 March, and ahead of the Budget, many had called for further financial support to help in the coming months.

As a result of this, the government announced a new “Recovery Loan” which will be available to businesses of any size with the goal of helping them get back on their feet.

Tax changes

I was pleased to also see the government take a tapered approach to increasing income tax, capital gains tax, and corporation tax. I believe that the timelines set out will give businesses a long enough horizon to provide much-needed certainty and stability.

Additionally, the investment “super deduction” of 130% against corporation tax is a great way to support businesses who are investing in modern equipment and will bring long term benefits.

It was also positive to hear that there would be no change to the capital gains tax regime, particularly around Entrepreneur’s Relief. Rewarding business owners for the risk they take in growing their businesses, employing people, contributing to the economy – so that they pay only a 10% tax rate on sale gains up to £1m (and then 20% on anything over that) makes sense to me. I don’t see that capital and income rates should necessarily be synchronised. It may be that this is changed in Autumn this year or Spring next year, but it does give time for people who are looking to sell their businesses to benefit from the current regime.

We also do a lot of work on share option schemes – particularly enterprise management incentive (EMI). There is no change to this, but a review has been announced, so we will wait and see what the outcomes are from this.

Stamp Duty Extension

Whilst many anticipated it would happen, the extension of the stamp duty holiday was positive and will give buyers, sellers and solicitors time to get property deals over the line. Our property team (including our new residential conveyancing expert Jo Parsons) have had a huge amount of work recently and will definitely welcome this extra time.

Business immigration changes

The new simplified process for high-skilled applicants will be welcomed by many and is definitely a positive step forward. We are a bit ahead of the game at Aaron and Partners, having recruited a new partner to join us last year, Ikram Malik. Ikram specialises in business immigration – not just for the high-skilled area, but also for businesses typically reliant on seasonal workers.

Extension to the furlough scheme

Our employment team has been perhaps our busiest team over the last 12 months and Ben Mason and his colleagues have done a huge amount in supporting businesses through furlough, which has now been extended until September. They have also had to deal with redundancy schemes but I think the furlough extension, combined with the expected end of lockdown on 21 June should hopefully mean fewer redundancies in the long term.

Insolvency

It is worth noting that there is a moratorium stopping insolvency processes, however, this expires at the end of March, but may yet still be extended. Of course, this is good news for any business in difficulty but it ignores those who are owed money. Mark Davies and our Insolvency team have been doing a lot of work in supporting creditors through this.

Help to grow

I think the help to grow management training for SMEs is great, and I’m sure we will see lots of people making use of that. The boost for apprenticeships and traineeships is also good news. We need to continue to support getting people into work at the beginning of their careers, as this will play a key part in our economic recovery.

So, in the round, not too bad – at least in immediate consequences.

Hugh Strickland

Corporate & Commercial

Partner Email: [email protected] Tel: 01743 294120 / 07912 781630

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Real Estate Developments in the Budget 2021

Spring is in the air (at least it was earlier this week) and the changes outside reflect that the world of property is on the move too.

Here are some recent real estate related developments in the budget, coronavirus related property issues and for post-Brexit Britain.

Budget

The Chancellor announced in the budget speech an extension of the stamp duty land tax holiday so that nil rate band for residential properties will be £500,000 until 30 June 2021. Thereafter, it will £250,000 until 1 October 2021 when it returns to £125,000.

Further help was announced for first-time buyers who only have a 5% deposit with a government guarantee on mortgages. Many big lenders are already backing the scheme.

Also, in the budget, the business rates holiday will continue at 100% for qualifying businesses in retail, leisure and hospitality businesses until the end of June 2021. For the remaining 9 months of the tax year, there will be 2/3 reduction in rates for those qualifying businesses that had to close due to coronavirus up to a value of £2 million with a lower cap for those business that were able to stay open.

Coronavirus Issues

The mortgage payment break to allow up to a 6 month holiday for residential mortgage payments is continuing and any applications for a new/second payment holiday have to be made by 31 March 2021. After 31 March 2021, an existing payment holiday can be extended until 31 July 2021 so long as you have not had more than 6 months of support and there has been no break-in that support.

On 29 January 2021 the Court Practice Directions were amended so the temporary changes to possession proceedings were extended until 30 July 2021. In respect of claims brought before 3 August 2020A, a reactivation notice has to be served by 30 April 2021. If no reactivation notice has been filed by 4.00 pm on 30 April 2021, the claim will be automatically stayed. No reactivation notice is required, however, where a final possession order has been made.

For possession claims brought on or after 3 August 2020, the claimant will need to produce a notice setting out the knowledge that they have as to the effect of COVID-19 on the defendant and their dependents,

Post-Brexit Britain.

The Chancellor announced new freeports to boost post-Brexit trade and industry. These will be UK wide special economic zones with simpler planning regimes, funding for infrastructure and cheaper tariffs and taxes. The first 8 regional locations in England are East Midlands Airport, Felixstowe & Harwich, Humber. Liverpool City Region, Plymouth, Solent, Thames and Teeside.

Following the end of the Brexit transition period, the Environmental Land Management Scheme (“ELMS”) for agricultural land moves into a national pilot phase for the Sustainable Farming Incentive being one of the three tiers of the ELMS. This new support is being phased in as the Basic Payment Scheme begins to be phased out over the next 7 years.

Emma McGlinchey

Real Estate

Partner Email: [email protected] Tel: 01244 405 442

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aaronandpartner · 4 years ago

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What is IR35?

‘IR35’ refers to the Off-Payroll Legislation which was introduced in the UK in the early 2000s in an attempt to tackle tax avoidance. The legislation aims to prevent tax avoidance where individuals who should be recognised as an employee for the purposes of tax, instead of supply their services through an intermediary (such as a personal service company (PSC) like a limited company), and treat themselves as self-employed. In doing this, the individual can avoid liability for income tax and national insurance (NI).

Does it apply to me?

In the private sector, the current position is that the responsibility for assessing and determining an individual’s employment status for tax purposes falls on the individual themselves.

For example, if you are supplying services to a third party (the engager) through a PSC, the burden is on you/the PSC to assess whether or not you are an employee for the purposes of tax and therefore whether or not you should be paying income tax and NI. The engager (or the agency should there be one) does not currently have any requirement to assess employment status, nor do they have any tax liability should HMRC disagree with the assessment.

What are the changes coming into force in April 2021?

From 6 April 2021, this is set to change. The government is reforming the IR35 rules in the private sector, to bring them into alignment with the rules in the public sector. From 6 April 2021, all medium or large-sized private sector businesses will be responsible for determining the workers’ employment status for the purposes of tax.

To classify as a small company for the purposes of IR35 and therefore be exempt from the updated legislation, a company must meet at least two of the following criteria:

Annual turnover of £10.2 million or less;

£5.1 million on your balance sheet or less; and

50 employees or less.

If your business does not meet at least two of these criteria, then they will be classed as a ‘medium or large-sized business’ under the Companies Act 2006 and the updated IR35 legislation will apply.

Following the change, it will be the burden of the engager to assess and determine the individual’s employment status for tax purposes and to pay the PSC accordingly. The engager will also now be liable should HMRC deem the determination incorrect.

Should there be other parties in the supply chain between the engager and the PSC, such as an agency, it is still the responsibility of the engager to assess and determine the employment status. The below diagram shows how the ‘engager’, the one receiving the services directly, will now be the one responsible for determining the employment status of the individual regardless of how many organisations are between the engager and the individual in the supply chain. The engager is then required to pass the outcome of their assessment down to the company paying the fees to the PSC, which would usually be the agency. Should the agency be unable to pay the tax for some reason, the liability then falls back to the engager (or the next in the supply chain should there be more than one agency involved).

What are the consequences of not complying?

Should a business fail to analyse the relationships that they have with their contractors and refuse to provide employment status determinations, or indeed make incorrect determinations without proper consideration, then there is a risk that they will be subject to large financial penalties from HMRC.

Following the incorporation of the updated legislation, HMRC will have the power to investigate the employment status of off-payroll workers in the private sector and issue a notice requesting the unpaid NI and PAYE tax should they find that a business as incorrectly categorised the employment status of one of their workers.

In addition to the outstanding NI and PAYE, HMRC also has the power to issue late payment fines and interest to the engager, along with a penalty that can be up to 100% of the outstanding liability. This penalty will be based on the circumstances as a whole, taking into account what steps have been taken by the engager in order to determine the employment status of the worker.

Further to the costs consequences above, there is also likely to be reputational damage done to the business and a competitive disadvantage.

How do we prepare for this?

Ahead of these upcoming changes, a lot of engagers and agencies in the private sector are scrutinising their business relationships with the PSC’s they engage with. Even in situations where there are written contracts that demonstrate that there is no employment relationship for the purposes of tax, remember that HMRC will look beyond this and look at the true nature of the working relationship. If the contract does not reflect the true position, it may be disregarded.

In order to prepare for the new rules, engagers and agencies should do the following:

Conduct a full audit and review of their business relationships with any contractors that they engage with in order to consider and determine whether any of these will be subject to the legislation;

If Contracts exist, consider whether they are a true reflection of the working relationship. If they are not, consider redrafting them to ensure they are more accurate;

Contact the relevant contractors to discuss the determination of their employment status, so that you can iron out any disputes in relation to this prior to the legislation coming into force;

Prepare and update your payroll and HR systems for a potential change in the way you need to pay contractors; and

Prepare and budget for the increased costs potentially involved as contractors may wish to raise their prices in order to take account of the tax to be paid.

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aaronandpartner · 4 years ago

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What is “rectification”?

Occasionally, a person will pass away leaving a Will which does not seem to reflect their wishes.

This gives rise to the question of whether such a Will can be amended after death in order to give effect to the deceased’s true intentions. The court has the power to amend a Will which appears not to correctly set out the deceased’s intentions, this process is called rectification.

The recent case of Barrett v Hammond (2020 EWHC 3585 Ch) concerned an application to rectify a Will. The deceased, Dr Robert Munroe Black, had executed a Will on 29th September 1998 and had added to it by executing Codicils in August 2005 and March 2016.

The Executrix of the estate, Elizabeth Barrett, made an application to the court as she was uncertain about the effect of the Will and 2005 Codicil. The Will had divided Dr Black’s estate into 52 equal shares, leaving six shares each to six individuals and two shares each to eight charities. The 2005 Codicil amended the Will to remove the gifts to two of the individuals and to add two more gifts to different charities of two shares each. This left eight shares out of the original 52 which were no longer given away under the terms of the Codicil.

The court handed down their initial ruling in July 2019 that the Will and two Codicils together had the effect of leaving the outstanding eight shares to pass under the rules of intestacy. As part of the ruling, the court ordered the Executrix to apply for rectification of the Will.

The law surrounding rectification of a Will is set out in section 20 of the Administration of Justice Act 1982. The court can only order rectification for two reasons, firstly, when the Will fails to carry out the intentions of the deceased due to a clerical error or, secondly, where there has been a failure to understand the Will instructions.

In this case, the court considered evidence showing Dr Black’s Will making history which showed a tendency to divide his estate into parts between a number of relatives. The court found that the evidence showed the deceased’s intention to give all of his estate away in his Will rather than leaving any shares to pass under the rules of intestacy. The court held that, on balance, it was likely that the deceased intended to dispose of every share in his estate and the failure of the solicitor who prepared the 2005 Codicil to ensure that it disposed of all of the shares was a clerical error and therefore rectification could be ordered of the Codicil so that the estate was divided into the correct number of parts.

James Wallace

Contested Wills, Trusts & Estates

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