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Giving references - say it nicely or say nothing at all?

July 12, 2016 by Guest contributor

Giving references - say it nicely or say nothing at all?{{}}Were you ever told "if you can't say anything nice, then don't say anything at all"? Not a bad rule for a child looking to avoid trouble in the playground, but rather less helpful when it comes to the thorny problem of giving an employee a reference.

Your employee certainly isn't going to be happy if you give them a bad reference, especially if that means they end up missing out on the new job they were hoping to get. That could be just the encouragement they need to have another look at whether they can take you to an employment tribunal.

So how about "don't say anything at all"? A prospective employer doesn't have to be a genius to guess that your reluctance to give a reference might be covering up something you'd rather not put down in writing. So what will you say when they phone you asking why you didn't provide a reference?

Meanwhile, of course, your employee might well be justified in claiming that your refusal to give a reference is as bad as - or even worse than - just telling the truth.

Following the old childhood advice, you might look for something nice to say. That would make your employee happy. The problem is that it might well make his/her new employer very unhappy if they end up having to deal with a disastrous new hire that you deliberately decided not to warn them about.

So it should come as no surprise that employers increasingly restrict employment references to just a few basic facts, confirming job title and employment dates but refusing to say anything more. And they make a policy of doing this every time, regardless of whether an employee has been a dream or a nightmare.

It makes the employment reference next to useless, but it also minimises the risk of legal claims.

"If you can't say anything nice, have a policy of always saying the bare minimum and including appropriate disclaimers." It's not catchy, but it might be your best approach.

Chris Walker, specialist business writer, editor and content strategist

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A rough guide to employment law

June 21, 2016 by Liz Dawe

A rough guide to employment law{{}}Like many employees of a small business, I wear at least two hats; in my case content management and human resources. With my HR hat firmly in place I recently attended an Acas HR masterclass hoping to pick up a few tips.

It turned out that I wasn't alone in juggling more than one job, and I discovered that I knew more than I thought I did about people management and recruitment. So far, so good.

Then came the employment law bit.

At that point I braced myself to be the one who didn't know the answer to various situational posers. But you know what? Neither, it seems, did the employers, the employees, the lawyers, the courts or the employment tribunals in the case law examples we were given. Alongside the "it depends" responses to the "is this discriminatory?" type of question sat quite a lot of "the first judge said yes, the appeal judge said no".

Can you ban an employee from wearing a religious symbol at work? What if other people find it offensive? What, legally, constitutes "reasonable"? There are no clear answers but there are lots of legal opinions and a great deal of interest in the latest legal judgments setting precedent for the next appeal.

Of course, there are some obvious cases of discrimination, and it would take an extremely obdurate employer to advertise for only young, white, male employees. But it seems that recruitment, work requirements, office behaviour, dress codes, offensive language or freedom of individual expression are all open to quite a lot of interpretation.

If even employment law specialists and judges can't always agree, how on earth can a small business get it right?

My advice would be to gen up on the basics of employment law, have employment policies in place and make sure everyone is aware of them and sticks to them. And if in doubt, err on the side of caution.

It seems that even if one of your hats is actually a long horsehair wig, employment law is still something of a minefield.

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How do I set up a bare trust? It does what it says on the tin

June 20, 2016 by Fanny Marshall

How do I set up a bare trust? It does what it says on the tin{{}}First things first, a bare trust has nothing to do with bears. That was my first thought when I was Googling bare trusts after I discovered I, as executor, needed to set one up to fulfil the wishes set out in my Dad's will. How do you even spell 'bare trust'? (I guess I could have checked the will!)

If you are in the position of having to set up a trust, it's easy to imagine weighty rolls of parchment and a hoary old solicitor sitting at a desk, quill in hand. In fact, as I discovered, setting up a bare trust is almost ridiculously simple. So simple, in fact, that after a brief consultation with a solicitor, I was told that they very rarely do them any more - she was surprised to even be asked about it.

In reality bare trusts really are, well… bare. There is very little to them - technically you don't even need anything written on paper, although it is advisable to make a dated note of any actions you take in your role of executor. In my Dad's will, he stated that he wanted to leave set sums of money to each of his grandchildren, to be kept in a bare trust until they reached the age of 18.

What this meant I had to do, once probate was granted and all the assets had been gathered together, was open a bank account (in the grandchild's name) for the trust and deposit the stated amount, to be left there until the child reaches the age of 18 at which point they are free to inherit. I could write a document saying that was what I had done and date and sign it, but that's not essential.

In this situation the two most important documents are the deceased's will and the grant of probate. The will states that the trusts are to be set up, the amount to be placed in trust and the name, date of birth and address of the beneficiary and the grant of probate places the legal responsibility to enact the will on the executor.

In my situation the bare trusts I was setting up were for the benefit of my children and therefore both myself and the other executor of the will know about them. If you were setting up a trust for someone unrelated to you it would, of course, be advisable to write a letter to the parents/guardians of the child with details of the trust, together with a copy of the will and the grant of probate. But, as I discovered, far from being a complicated and costly legal process, setting up the bare trust was one of the most straightforward tasks I had to do as an executor.

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What does the high heels row mean for your business?

June 07, 2016 by Guest contributor

What does the high heels row mean for your business?{{}}The media storm over the agency worker who was sent home for refusing to wear high heels has highlighted issues with the current discrimination laws.

Nicola Thorp, a 27 year-old receptionist, hit the news headlines recently when she was sent home from work for refusing to wear high heels. But is this legal?

Thorp was employed by PricewaterhouseCoopers' outsourced reception firm Portico. Upon arriving at work, wearing smart flat shoes, her supervisor informed her that she would need to go and buy heels that were between two and four inches high or else she would be sent home without pay. When she refused, Portico sent her home.

Thorp had signed up to Portico's appearance guidelines before accepting the role but employers need to be mindful that workers can bring cases if the dress code falls foul of sexual discrimination legislation.

Portico has since changed its uniform guidelines with immediate effect. The new dress code policy for the company allows all women to "wear plain flat shoes or plain court shoes as they prefer". However, this does not change the fact that the law in relation to dress codes, as it currently stands, is open to question and potential abuse by employers.

Thorp has set up a petition asking the Government to make it illegal for a company to require women to wear high heels at work. It has attracted more than 141,000 signatures. As a result, Parliament will consider this for debate.

What is the current legal position?

The Employment Appeals Tribunal (EAT) has made it clear that dress codes are lawful, provided they are not discriminatory.

In Thorp's case, the issue is that it is still legal for a company to require female members of staff to wear high heels at work against their will. In addition, employers can also send staff home if they fail to live up to "reasonable dress code" requirements, as long as they have been given enough time to buy the right shoes and clothes.

It can be argued therefore that dress code laws as currently drafted are potentially sexist and may therefore need to be changed so that women have the option to wear flat formal shoes at work, if they so wish. Wearing flat shoes at work would enable a woman to carry out her job more efficiently, particularly, as in Thorp's case, if a nine-hour shift is expected, requiring her to be on her feet all day.

Gender equality

Gender-specific dress codes are lawful in the UK, as long as they do not treat one or other of the sexes less favourably and there is an "equivalent level of smartness".

If it can be established that members of one sex are being treated less favourably than members of the opposite sex, the "but for" test comes into play (Smith v Safeway). But for the fact that Ms Thorp was a woman, would she have been required to wear high heels?

The Tribunal said no to a similar question posed in the case of Safeway. The case concerned a male staff member who was required to wear a collar and tie. The EAT found that the Tribunal's decision was flawed and that the Tribunal had misapplied the "but for" test. The test only becomes relevant once it has been established that members of one sex have been treated less favourably than members of the other sex. In the case of Safeway, the Tribunal had only asked itself whether “but for the fact that T was a man, would he have been required to wear a collar and tie?”. The first limb of the test had not been satisfied.

Advice to employers

The correct approach is to consider whether the level of smartness required could only be achieved for women by requiring them to wear high heels. If it could be achieved by other means then the lack of flexibility shown in the approach taken towards women may suggest less favourable treatment. Whilst dress codes are lawful, employers with similar dress codes therefore may wish to consider whether the requirement for women to wear high heels is actually necessary to achieve the level of smartness required.

Provided that you, as the employer, adopt an even-handed approach, the fact that members of one sex are required to wear clothing of a particular kind, but members of the other are not, will not necessarily mean that members of one sex are treated less favourably than members of the other. It will depend on the overall context of the relevant dress code.

Acas guidance

Acas provides assistance to both employers and employees. The key points made by Acas are:

  • employers must avoid unlawful discrimination in any dress code policy;
  • employers may have health and safety reasons for having certain standards;
  • dress codes must apply to both men and women equally, although they may have different requirements;
  • reasonable adjustments must be made for disabled people when dress codes are in place.

Companies have a large measure of discretion in controlling their company's image, including the appearance of staff, especially those who have contact with customers. Now's the time to review your dress code policy and ensure that it does not fall foul of discrimination or other employment laws.

Copyright © 2016 Jennifer Spain, iLaw.

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Planning what happens after you die - not just a task for old people!

May 25, 2016 by Fanny Marshall

Planning what happens after you die - not just a task for old people!{{}}Until you've been in the situation of losing a parent or spouse, you probably haven't given much thought to what happens after someone you are very close to has died. But once the initial shock and grief has subsided, there's a huge amount of clearing up and clearing out that has to be done.

Managing the affairs of someone who has passed away, whether you are their executor or not, can be made easier or harder depending on how things were left by the person who has died. Having been through this experience very recently, I have found out the hard way that this is something I don't want to have to put my own children through.

Organising your affairs and making preparations for what you want to happen after you die might feel like a morbid, grisly job but it is the kindest thing you can do to save loved ones from having to do it for you when they are least capable of making such decisions.

Make a will

This is the first and most obvious thing to do. If you are married or in a civil partnership and don't have children, the law states that if you don't have a will your other half will inherit all your assets (if they are worth £250,000 or less). If you are not married but are in a relationship with someone and die intestate (without a will), your partner will receive nothing, although any children you have together will stand to inherit with your estate being divided equally between them.

If there are items that you wish to bequeath to particular people, writing this down in a will can avoid squabbles and potential family break-ups. Better still, discuss it with your family while you can or leave letters to be opened in the event of your death explaining why you have made the decisions that you have.

A law firm can draw up a basic will from around £150 although if you have complicated financial affairs or requests, it can cost more. When you make a will it is also a good time to think about inheritance tax planning if your estate is likely to be worth more than the inheritance tax threshold (currently £325,000).

Plan your funeral

It may sound depressing but this is the hardest bit for grieving relatives to have to do if you haven't left any instructions. The pressure to pick the right piece of music, the most moving poem, the coffin made of wood/willow/cardboard, the plastic casket for the ashes or the expensive wooden one, all knowing that you only get one chance to get it right and if you get it wrong, it will be a lasting memory in everybody's mind.

Search online for companies that offer pre-paid funeral packages. This might not be for everyone but they can alleviate the financial burden of putting on a funeral which can now cost as a minimum, around £4,000. At the very least use the examples of funeral packages that they offer to make a list of what you would like to happen when the time comes.

Put your affairs in order

Different people have different understanding about what "putting your affairs in order" actually means. One person's filing cabinet with house deeds, share certificates and pension details neatly filed in alphabetical and date order is another person's plastic bags stuffed with bank statements going back 50 years. However, it is useful to put everything in one place including your most important documents such as your house deeds, share certificates, pension details, tax and bank account information, mortgage provider, passport, marriage/birth certificates and so on.

These days, when so much is done online, it is also sensible to keep a record of your most important online accounts. Even if you don't want to write down the passwords, just having a list of your online presence – Facebook, online email account, Twitter, Instagram etc. – can make it easier to tidy things up and let people know that you have passed away.

Most importantly, don't be afraid to talk to those close to you about what you're doing. It's no good writing detailed instructions about what you want if, when the time comes, they can't be found. Your will can be stored with the solicitor who drew it up (usually for a small fee) but additional information that you haven't included in the will - for example, about your funeral service - should be kept somewhere safe with at least one, but preferably more, people knowing exactly where that is.

Fanny Marshall, Law Donut manager

Copyright 2016 

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Posted in Personal law | Tagged Will, Probate, funeral | 0 comments

Settlement agreements part 2: the practicalities

May 10, 2016 by Guest contributor

Settlement agreements{{}}

How much should an employer offer to pay an employee under a settlement agreement?

There is no set formula in terms of what an employer ought to offer an employee by way of a severance payment under a settlement agreement. It will very much depend on:

  • The surrounding circumstances of the case;
  • The terms in the employee's contract; and
  • Any potential claims that the employee may have against the employer.

In terms of guiding principles, employers need to bear in mind that they are effectively compensating the employee for their forbearance in not filing a claim with the Employment Tribunal, arising out of their employment and the termination thereof and therefore the likely value of any such claim(s). Any ex gratia sum offered should reflect this.

The tax position

The employer ought to take specialist tax advice in relation to the taxable status of the payments being made under the settlement agreement. An ex gratia payment, genuinely representing compensation for loss of employment, can be made of up to £30,000 without deductions for PAYE.

Contractual payments

Depending on what is contained in the employee's contract of employment, the settlement agreement will also make provision for the following categories of contractual payment:

  • Notice (or payment in lieu thereof);
  • Bonus;
  • Private medical care insurance;
  • Life assurance;
  • Pension; and
  • Consideration for the employee reaffirming their confidentiality and post-termination restrictions.

The importance of obtaining legal advice

We recommend obtaining professional legal advice first before putting forward a settlement offer, given the potential pitfalls involved.

Further, we recommend the settlement agreement itself is drafted by a specialist employment lawyer in order to get the terms right.

The amount your legal advisor will charge to draft a settlement agreement varies and depends on the precise circumstances and the terms being sought under the agreement itself, including for example dealing with issues such as confidentiality, intellectual property rights and post-termination restrictions.

When should the employee expect to receive the settlement monies under the agreement?

The settlement agreement typically provides that any ex gratia amount is to be paid between 14 to 28 days of the agreement itself being signed.

In terms of contractual payments such as salary, accrued untaken holiday, contractual bonuses or commission, the agreement tends to provide that such payments will be made in the next payroll run on the usual payroll date.

Who pays for the legal advice an employee has to take on a settlement agreement?

An employee needs to obtain independent legal advice on a settlement agreement if it is to be legally binding.

Since it is in the employer's interests for the employee to sign the settlement agreement, in the overwhelming majority of cases, employers agree to make a contribution of between £250 to £500 plus VAT towards the employee's legal fees in needing to obtain independent advice as to the terms and effect of the settlement agreement.

It is not recommended to offer a higher cost contribution than this since, by doing so, the employer may effectively be paying the employee's additional legal fees for their independent advisor to negotiate an improved settlement on their behalf.

What if an employee is not prepared to sign the settlement agreement?

An employee may decide to turn down a settlement agreement if they consider the amount on offer insufficient, based on the advice they have been provided and based on the fact that the employer is not prepared to increase this.

An employee may also elect not to sign a settlement agreement, based on the advice of their adviser, as to its terms and effect, for example if they consider its terms to be too onerous.

As explained in Settlement Agreements Part 1, if an employee refuses to sign the settlement agreement then there is a risk that they may rely on it and the conversations surrounding it as evidence in bringing a grievance, resigning and claiming constructive dismissal, discrimination and bringing any employment proceedings.

Advantages and disadvantages of offering a settlement agreement

The ACAS guidance sets out a number of key advantages and disadvantages for employers that are considering offering an employee a settlement agreement.


A settlement agreement can:

  • Provide a swift and dignified end to an employment relationship that is not working; and
  • Avoid the time and cost involved in dealing with a grievance and/or defending a tribunal claim.


A settlement agreement can:

  • Involve substantial financial cost to the business in having to pay an agreed financial sum to an employee;
  • Expose the employer to potential risk in terms of any on-going employment relationship with the employee, if a mutually agreed settlement cannot be reached, with the potential that they may rely on the settlement agreement offered and any conversations or documents relating to it as grounds for resignation and making a claim in the employment tribunal; and
  • The potential risk to employment relations in the wider workforce if used inappropriately or as a substitute for good management practices.

Copyright © 2016 Julian Cox, head of employment at iLaw

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