Despite another successful challenge to self-employed status against a courier company, with two more likely to follow, the legal position has not changed. Tribunal decisions are not binding, Uber has appealed a similar decision and the courier companies will probably follow. The appeal process can be prolonged for many years.
What will make a difference is the employment practices review currently being undertaken by Matthew Taylor for the government, due to be published in June. Mr Taylor has recently stated that “workers’ rights should be overhauled to reflect the gig economy realties and if a company wants control over its workers then it should respect their rights and entitlements.”
The problem is that the self-employed workers have benefitted from lower taxation and NI contributions. The test which HMRC applies to determine employed/self-employment status is different to that which applies under employment law. Under HMRC’s test individuals are either employed or self-employed. HMRC does not recognise the concept of workers. Employment law applies a test of control: the more autonomous a person is the more the likely they are to be self-employed. Workers under employment legislation have some autonomy and rights such as the national minimum/living wage and holiday pay, but not the full rights of employees (who have no autonomy).
If the law is changed so that gig economy workers and similar become entitled to holiday pay and the national minimum/living wage, then it is likely their NI and tax contributions would increase too. Price increases for customers will, doubtless, follow.
A court ruling from the ECJ has held that employers are able to ban their employees from wearing headscarves, but only if there is a wider policy preventing all workers from the visible wearing of any political, philosophical or religious signs.
The ruling is not a green light for employers to prevent only a headscarf from being worn. Such action would be discriminatory even if the policy is in response to requests from their customers.
To be legitimate the policy must apply (and be applied) universally to prevent overt expression of any employees religious beliefs. That includes preventing the wearing turbans, visible crosses and any other religious dress or icon as well as headscarves.
As the policy will also interfere with the employees Right to Religion (Article 9 of the European Convention on Human Rights) to be lawful, the employer will also need to consider the proportionality of the effect of policy against the aims it is trying to achieve. There were a number of cases brought to the European Court of Human Rights in 2013 regarding this, including the case of Ms Eweida. In that case the ECHR found that her Right to Religion had been infringed when British Airways relied on their neutral company image to require her to stop wearing a cross on her necklace. In particular it was held that the discreet cross would not detract from BA's corporate image or uniform.
With an increasingly secular society such policies may become more prevalent, but employers wishing to adopt policies enforcing a neutral corporate images have a tricky balancing act to play. Would the requirement that they have to apply the policy universally require them to take action against an employee wearing a visible cross, even if it is only discrete?
But the ban must be based on internal company rules requiring all employees to "dress neutrally", said the European Court of Justice (ECJ).
The ‘Exceptional Talent’ (ET) visa is the sole immigration category which is determined by a designated expert body and not the Home Office.
The ET visa is aimed at non-EU nationals who are world leaders or potential world leaders in the fields of science, humanities, engineering, the arts and, more recently, digital technology. If approved, the visa permits the individual to work in the UK for up to five years after which time they can apply for permanent residence.
The initial application is made to the Home Office or UK Consulate and must satisfy the general immigration requirements. The Home Office/Consulate then refers the application to the expert body for their endorsement. There are five expert bodies approved by the Home Office who determine their own criteria as to who has sufficient talent. Tech City UK is the designated expert body for digital technology applicants. If approved, an endorsed potential applicant must then apply to the Home Office for leave relying on the endorsement.
There are a maximum of 1000 visas permitted per year divided up into roughly 200 for each category. However, the take up has been low and this is why Tech City UK was able to increase its allocation since other bodies have not used up theirs.
The maximum figure for ET visas is likely to increase following Brexit, assuming EU nationals will no longer have the right to work in the UK.
Tech City UK was able to increase its allocation since other bodies, which include the British Academy and the Royal Academy of Engineering, did not use up theirs.
According to a recent report from industry body techUK, 28pc of new workers in the tech industry between 2009 and 2015 were from outside the European Union.
A number of news outlets are reporting on Waterstones' decision not to use its name, branding and trade marks in three new stores opened on local high streets.
Ownership of a trademark does not compel a owner to use that trademark on all their goods and services. The trader is free to choose whether they wish to use the mark or not, but they need to keep in mind that if they don't use the mark over a five year period then the trademark could be revoked for non-use.
The public concern is more directed at the misrepresentation to the public that occurs from not explicitly making the connection with the chain retailer clear. Some members of the public feel cheated when it turns out that money they were spending in what they thought was a local business wasn't remaining in the local community.
However, the tactic is nothing new and has been used in other circumstances. People may well remember the Student Loans Company became embroiled in a dispute after sending letters out in the name of Smith Lawson & Company, purporting to be a debt recovery company acting on their behalf.
In that instance the Office of Fair Trading intervened but only asked the Student Loans Company to change some of the wording in the letters which it felt were deliberately misleading (such as "We are instructed by our client"). In the case of the Waterstones shops, the first store was launched as "a quintessentially local bookshop", but it seems unlikely that there is any legal misrepresentation which needs to be addressed.
The firm has opened three shops that do not feature its distinctive branding, prompting accusations of deception.
But Waterstones' chief executive, James Daunt, told the BBC the move was justified, saying he wanted the shops to have a more independent feel.
An interesting commentary on the recent ruling on heterosexual couples and civil partnerships written by Stala Charalambous, Partner and Head of Family Law at GSC Solicitors LLP.
On 21st February, the Judges in the Court of Appeal case Steinfeld and Keidan v Secretary of State for Education Judgement  EWCA Civ 81] dismissed the Appeal of Rebecca Steinfeld and Charles Keidan, for the right of a couple of the same sex to be able to enter into a civil partnership. This has caused a stir in the media. The decision has been referred to as ‘discriminatory’ and a ‘Breach of Human Rights’.
At present, couples of the same sex can simply live together, without any legal rights, enter into a civil partnership or marry. Couples that are not of the same sex can either cohabit or marry. The law in relation to civil partnerships is set out in The Civil Partnership Act 1974. Section 3(1) (a) of the Act, prohibits couples who are not of the same sex from entering into a civil partnership.
A couple living together who have neither married nor entered into a civil partnership are referred to as cohabitees. A cohabitee does not have the same legal rights as either a married person or a person in a civil partnership. There is no legal recognition of a ‘common law wife’. To have any legal rights, a different sex couple would have to marry whilst a same sex couple have the additional option of entering into a civil partnership.
Tim Loughton MP for East Worthing and Shoreham, has presented a Bill (The Civil Partnership Act 2004 (Amendment) Bill 2016-17) before Parliament to amend The Civil Partnership Act1974 to allow couples of a different sex to enter into a Civil Partnership.This Bill will have the second reading on 24th March 2017.
The Government is adopting a cautious ‘wait and see’ approach. Statistical data has shown that since same sex couples have been able to marry, there have been less civil partnerships taking place and more of them have been dissolving. The government is therefore waiting to see what effect there will be on the number of civil partnerships being taken up by same sex couples now that they also have the option to marry. If fewer are choosing to enter into a civil partnership, then the government may decide to abolish civil partnership altogether.
The ever-controversial yet ever-popular taxi hailing app 'Uber' has hit the headlines again this week with claims that it should be paying VAT on fares. If the claims are well-founded, this could result in Uber having to pay VAT going back four years or more – a hefty blow when you consider Uber’s VAT bill was allegedly £20 million for the year 2015 alone.
A leading tax barrister, Jolyon Maugham QC plans to argue in the High Court that Uber is making a “taxable supply” and should therefore be paying VAT on rides.
Uber have sought to describe themselves as merely a “platform” which connects riders and drivers rather than a transportation service, meaning that it does not have to pay VAT. Instead, Uber shifts the responsibility for VAT onto its drivers, arguing that if drivers earn above the VAT threshold then the tax is their responsibility.
This case echoes the landmark employment tribunal ruling last October in which Uber lost the right to classify UK drivers as self-employed and was ordered to pay drivers minimum wage and holiday pay. The tribunal in that case found that Uber supplied transportation services to passengers. This reasoning could be applied to argue that Uber should therefore be paying VAT.
If this challenge is successful and Uber are forced to pay VAT on fares, Uber may be forced to re-think its business model and either increase fares or decrease drivers’ pay. When you consider that Uber replicates this structure across the EU, the tax bill could be multiplied significantly given that VAT should operate identically across the EU.
The company is facing yet another legal challenge, this time in the UK, from a respected barrister who claimed Uber owes the country at least £20 million in VAT.
I am very proud that my colleague Michael Shapiro has been made an equity partner in the Firm. Michael's route to partnership has not been the conventional one, joining the firm as an office junior back in 1988, with just his O-Level's and a year's business administration course behind him.
Undertaking all his training whilst at the firm, Michael qualified as a legal executive in 1997 and his hard work and determination has seen him continue to progress through the firm to Head of Litigation, and eventually Partner.
Michael has always brought something different and unique to the firm. He is testament to the fact that the same approach doesn't always work for everybody in every situation, a culture and philosophy he continues to apply to his clients on a day to day basis.
Many congratulations Michael, Mazeltov.
Having been introduced originally in 1999, the National Minimum Wage is affecting more businesses across the UK as the rates continue to rise.
The National Minimum Wage has risen nearly 17% since 2010 and is due to rise to £7.05 (for 21 to 24 year olds) from April 2017.
That increase doesn't taken into account the higher National Living Wage for workers aged at least 25. Introduced in April 2016, the current National Living Wage is £7.20 per hour and is set to rise to 7.50 per hour in April 2017.
With the current Chancellor targeting a rate of £9 per hour by 2020, businesses now more than ever should be ensuring that they are comfortable that their employees are being paid at least the minimum rates, especially in light of recent decisions from the European Court which have meant additional hours need to be included in the calculation (such a travel time for peripatetic workers).
Whilst disputes over wages should be discussed between the employer and employee initially, ultimately enforcement of the minimum wage (along with other statutory payments such as maternity pay) is the responsibility of HMRC. Disputes are often swiftly resolved as employers are quick to rectify their errors, but expect HMRC to increasingly use "name and shame" tactics to enforce compliance with the rules and raise awareness of employers' obligations.
More than 15,500 workers had to be paid back nearly one million pounds.
Excuses used by businesses for not paying the full basic wage included using tips to top up their pay, making reductions to pay for a Christmas party, or making staff pay for their own uniforms.
This article by the BBC highlights the need for all parties to a property transaction (whether residential property or commercial property) to take time to understand what is being transferred and on what terms. Generally, solicitors are not there to provide investment advice to their clients, but it is important that individuals and businesses understand the potential legal ramifications of a leasehold arrangement including break clauses, service charge, ground rent, rent review clauses and the costs of obtaining licences to alter if you want to carry out works to your leasehold property.
For instance, in the example from the video linked to the article, the ground rent due on a flat over the course of the 190 year lease totalled over £1.3 billion despite the leasehold interest in the flat only costing £150,000. This resulted from a fairly unusual provision which doubled the ground rent every 10 years, meaning that the ground rent due grew exponentially over the term of the lease. However, the long term effect of any rent review clause should always be discussed with your solicitor, regardless of the current level of rent due.
If your solicitor is not willing to discuss this with you as part of their retainer, you must seek advice from a solicitor who will, regardless of whether they have been recommended, approved or suggested by the developer, seller or your mortgagee.
As a firm we are receiving an increasing number of queries from landlords over their need to check the immigration status of their tenants. Michael Shapiro's recent article explains what is required in more detail.
The Beatles back catalogue is one of the most valuable in the world and Sir Paul McCartney has issued proceedings against its owner (Sony) to clear the way for him to reclaim his share of the publishing rights in his songs.
McCartney will not be in a position to start reclaiming his songs until 2018, but he has issued proceedings in the US seeking a declaration that in line with US law he is entitled to terminate the agreement under which assigned his publishing rights.
Over recent years, several artists have been reclaiming their copyrights in the US, but in 2016 an English Court ruled that Duran Duran could not rely on the US law to terminate their UK publishing deal even in respect of their US copyrights.
It is important to note that the Duran Duran case was decided on its own facts and contractual wording and so does not automatically indicate that McCartney's claim will fail. Indeed, as he is bringing the case in America, the right to terminate is far more likely to be effective than it was for Duran Duran in the UK court, where Mr Justice Arnold acknowledged that no expert evidence regarding the extent of the US law had been submitted by either party.
Duran Duran have already indicated that they intend to challenge the court’s ruling and with Paul McCartney's new claim, this promises to be an area of significant importance to writers and publishers in the coming years.
The star has gone to a US court, seeking to regain the publishing rights to 267 of the band's classic songs.
Despite several successful tribunal decisions challenging self-employment status, the legal position has not changed.
Tribunal decisions are not binding and each case is determined on its own facts. Uber has appealed the decision against it and, the courier companies will probably follow. The appeal process can be prolonged for many years by appealing to higher courts, each time adding more costs to the individuals or their union backers.
What will make a difference is the enquiry into the future world of work by the Parliamentary Committee on business strategy. This will focus on the status and rights of agency workers, the self-employed and those working in the ‘gig’ economy. If there is a change in the law confirming worker status then this will have financial repercussions for companies in the ‘gig’ economy who will then be required to pay couriers/drivers the national living/minimum wage and holiday pay. Price increases for customers will, doubtless, follow.
The central London employment tribunal ruled that CitySprint had unlawfully failed to award holiday pay to Mags Dewhurst and had wrongly classed her as a self-employed freelancer. CitySprint, which has 3,500 self-employed couriers in the UK, could now face further claims.
The penalties for failing to pay the national minimum wage and national living wage are high. They amount to 200% of unpaid wages (or 100% if paid within 14 days of any enforcement notice) up to £20k per worker maximum. This is in addition to the unpaid wages payable to the individual (penalties are payable to the government). Any enforcement action will also result in ‘naming and shaming’ on Government websites.
Whilst HMRC’s enforcement action should be sufficient to persuade most solvent and scrupulous employers to pay the NMW/NLW, there are a number of grey areas where HMRC does not tend to get involved. These include cases involving whether travel time between assignments is working time (it is now confirmed that it is), interns who are required to work unpaid for long periods and workers in the “gig” economy who are required to register as self-employed with recent tribunal decisions upholding their status as workers. Worker status entitles an individual to be paid the NMW/NLW in addition to holiday leave.
Enforcement via HMRC for any worker/employee who has not been paid the NMW/NLW is relatively quick and free. But perhaps more resources ought to be allocated for complex cases which require determination by an employment tribunal. Without financial backing, these cases can be expensive and prohibitive for any individual to pursue which defeats the purpose of the national minimum/living wage.
“This campaign will raise awareness among the lowest paid in society about what they must legally receive and I would encourage anyone who thinks they may be paid less to contact Acas [the advisory, conciliation and arbitration service] as soon as possible," she said.
“Every call is followed up by HMRC and we are determined to make sure everybody in work receives a fair wage.”
An interesting case emanating from the Intellectual Property Enterprise Court has shed light on what rights a professional may have in respect of the use of their name following retirement.
A partner at a law firm created a separate sub-brand for her work, which incorporated both the firm name and her own. This was registered as a trade mark by the firm and was used for a number of years. However once the solicitor left the partnership, the firm continued to use the sub-brand in her area of expertise attracting the ire of its previous partner.
The solicitor claimed that by continuing to use her name in the sub-brand the firm was passing itself off as associated with her and the goodwill she had built up as a professional in her field.
This argument was rejected by the court. Whilst acknowledging the reputation that the solicitor enjoyed, the court found that this did not mean she had built up any goodwill which she herself owned. A key fact was that at all material times she traded as part of a partnership and therefore goodwill generated by her actions were owned by those partnerships rather than herself.
The position may well have been different if she had at some point in the past traded by herself as a sole practitioner but, without owning any goodwill, the solicitor was not in a position make a claim for passing off in this instance.
It was agreed by all parties that the solicitor could continue to use her name in the field and the court opined that if the firm continued to represent that she still worked for the firm, then she would have grounds to make a complaint. So whilst the firm can not claim to be her, they do not need to disassociate themselves from her either.
In a recent case in which this firm acted for the successful claimant, the Intellectual Property Enterprise Court ruled on the interaction between the costs caps in that court and the various incentives to make offers of settlement under Part 36 of the Civil Procedure Rules.
Previous case law had limited the effect of the Part 36 incentives, holding that the costs caps still applied to the rewards otherwise available to a party making and then beating its Part 36 offer. This severely limited the benefits of making a generous offer of settlement (and so limited the attraction to the other party of considering whether to accept that offer) as there is likely to be little room left in the staged costs caps in which to recover any additional sums.
In PPL v Hagan, HHJ Hacon has altered the costs position. The judge followed the Court of Appeal's decision in Broadhurst v Tan (on fixed costs) and ruled that an award of indemnity costs pursuant to Part 36 fell outside of both the stage and overall cost caps.
This will provide a strong incentive for claimants and defendants to make reasonable part 36 offers, especially in the early stages of the litigation. Failure to accept an offer that subsequently beaten will deprive the paying party of the protection of the costs cap (from the time that the offer was due for acceptance) and so is likely to have a severe effect on the amount of costs that will be awarded against them.
See my comments on the new draft tax legislation which will come into force on 5 April 2017.
One of the recent trade mark disputes to have received publicity, this case concerns the battle between the Icelandic Government and frozen food retailer Iceland over the use of the country's name. The dispute originates from an application by the Icelandic Government to register the trade mark "Inspired by Iceland" which was subsequently blocked by the supermarket chain.
The Icelandic Government claim that the retailer is preventing Icelandic firms from describing their products as 'Icelandic'. Despite their trade mark registration, legally Iceland stores are not allowed to prevent use of this term where it serves as a term to denote the geographical origin of a goods or service.
However, it should also be noted that the dispute arose from a trade mark application whose purpose was not purely to describe the geographical origin of products. Such a sign with such a limited purpose could not be registered as a trade mark it would prevent fair competition in the market place from the producers local rivals.
The Icelandic Government could challenge the supermarket's trade marks due to their "improper use" by the trade mark owner. They could argue that the trade marks are being used to stymie legitimate products, competition and trademark applications. This argument is fraught with difficulty as not only is there little relevant case law, but it traditionally has focused on whether the actual use of the mark was likely to mislead the public as to the nature, quality or geographical origin of those goods or services. None of that is in issue in relation to the supermarket's goods.
Pending any such application, Icelandic food producers will need to be bold and stand up to the supermarket chain where use of the term Iceland or Icelandic is justified. This can be difficult, especially for small producers, when faced with a well resourced and financed international company but they will also have the potential of bringing a claim against the supermarket if they threaten trade mark infringement proceedings where the use of the Icelandic name clearly indicates the origin of the goods.
Amazon delivery drivers’ complaints follow those of the Uber drivers, Hermes couriers and other workers in the gig economy; namely, that they are treated as casual labour, forced to work on a self-employed basis with no guarantee of work and are paid per ride or delivery. Consequently, they often earn less than the national minimum or living wage (£7.20 per hour). From the reports, it would seem that Amazon Logistics or its agency, are also breaching health and safety obligations and the working time regulations. These provide for minimum daily rest breaks.
However, rather than bringing tribunal claims to enforce their members rights which brings risks of costs and uncertainty, the unions seem to be relying on adverse publicity to force such companies to change their working practices. The BBC undercover investigation and wide press coverage has drawn attention to the Amazon drivers’ working conditions.
The unions have also successfully lobbied Parliament on these issues leading to an inquiry by the Business Strategy Committee into the future world of work. This will focus on the status and rights of agency workers, the self-employed and those working in the gig economy. It will also consider the definition of ‘worker’, minimum wage enforcement and the role of trade unions in providing representation together with other related issues.
Whilst the Government is keen for companies to pay the NMW and NLW (penalties for non-compliance are high), they also want companies to provide work to individuals so will need to strike a balance between the companies and individuals’ interests. If changes are implemented, then this could affect the business models for many gig economy companies and will, doubtless, result in higher prices for customers.
Drivers for companies contracted to work for the online retailer told an undercover reporter that they were expected to deliver up to 200 parcels a day.
The report also claimed some drivers said they were effectively paid less than the minimum wage of £7.20, because of the long hours worked to deliver all their assigned parcels.
The makers of Toblerone have announced that they are changing the shape of the product in an effort to reduce the weight of the bars. The reduction of in weight has been justified on the basis of costs, but interfering with the iconic look and shape of the bars is a significant risk. Indeed the company has been beset with criticism since the move was announced.
Perhaps the decision could be better understood, when we consider the Intellectual Property Rights which exist in a Toblerone bar and its packaging.
Toblerone has trademarks over the Toblerone name and logo and also over the shapes of various different elements of their triangular and combination packaging. By changing the shape of the chocolate bar as they have, they are able to continue to use the same packaging in the same dimensions. The off the shelf product bought by the consumers will look the same and so maintain continuity for the consumers in this regard.
The key element which is not protected is the shape of the chocolate bar itself. Protection can not be granted over this element as the shape fulfills a technical function in allowing the bar to be broken into pieces by squeezing the peaks together.
Whilst the shape of the chocolate bar is the image most consumers bring to mind when they think of a Toblerone bar, this element is not seen by the public until the product has already purchased and opened. Its value in distinguishing the product 'on the shelf' is therefore limited.
Perhaps this is the reason why Toblerone have decided to interfere with the classic Toblerone bar design, but it may also be a prelude to Toblerone arguing that the new shape of the bar is no longer purely functional and so can qualify for legal protection.
Mondelez International, the company behind the product, has increased the gap between the peaks to reduce the weight of what were 400g and 170g bars.
Some consumers have described the move as "the wrong decision" and said the bigger spaces looked "stupid".
An interesting and timely article from my colleague Justin Goldspink in BASCA's 'The Works' magazine.
A look at the legal issues behind the spate of recent songwriting copyright infringement claims in the UK and elsewhere. An interesting and informative read.