Well, yes they are but they can also end up boxing an employer into a corner – but why ?

The reason is that employment contracts are the same as any other form of contract – once agreed, neither party to the contract can alter the terms without the others consent.

This creates particular difficulties in the employment relationship where things can change rapidly, both in terms of legislation and employment trends. By way of 2 brief examples, 2 major changes in workplaces have evolved very quickly :-

1. the rise of remote or home working

2. the use of the internet and social media in the workplace

Starting with the premise that there may be some logical reasons to leave some issues out of an employment contract, there remains a sensible solution so that both employer and employee know where they stand, yet there is flexibility without the need to try and vary the contract which may create friction. The solution may be to include a number of provisions in policies and procedures or staff handbook, and make clear that these documents do not form part of the contract and are variable at the employer’s choice.

Employers should be aware that the above suggestion is not a panacea for all employment law issues and that certain issues such as pay, working hours, role and holidays do not to remain in the contract. It should also be remembered that simply having a set of detailed policies and procedures in no way obviates the need to seek a consensual and happy workplace and to treat staff consistently and fairly.

Employment law is a highly sensitive and political area, employers should also remember that regardless of what is included in contracts of employment or policies and procedures. employment law is fundamentally statute based and statutes will override unlawful or even potentially illegal content in contracts or policies or actions by employers. Remember also that Tribunals and Courts will often interfere in emp0lpoyment contracts to imply terms due to the perceived inherently unequal bargaining position between employer and employee.

Further advice and services relating to employment contracts available here.

Aside from family law, the legal issues which impact most directly on the general public relate to employment law and personal injury and in those areas, no win no fee advice has to an extent filled the gap (a lot mire successfully in injury claims with perhaps the exception of claims relating to medical negligence) but even this is now being erradicated by the swingeing personal injury reforms making no win no fee for low value personal injury claims much less likely and by the forthcoming changes to the employment tribunal rules resulting in court fees being payable.

Even worse, many employment law and personal injury claims overlap with each other. Take the example of an employee who sustains a repetitive strain injury at work. In some instances, this may create a disability and may be caused by negligence or a breach of statutory duty by the employer. This means there is a potential injury claim.

Let’s then assume that the employer is an all round bad egg and decides that instead of making adjustments to help the employee top deal with his or her disability, as required by law, they will instead dismiss the employee who is no longer able to do the job properly. Such a dismissal, especially if proper process is not followed and even perhaps otherwise may constitute unfair dismissal and also, potentially disability discrimination claims, both employment law claims which would typically be started in the employment tribunal. Let’s then assume that the employee, through his or her strenuous efforts and some luck, a couple of months post dismissal, finds another job with a very good and understanding employer.

In the above circumstances, the employee would have very strong and legitimate claims, but both the employment tribunal and personal injury claims might not be worth, in pure financial terms, more than £5,000.00 each. The personal injury claims would be a small claims matter and no costs would be recoverable, making it difficult for the claimant to find a lawyer to take the matter on and still retain the likely damages, plus in the employment tribunal, a person who through no fault of there own has had no income for several months would have to pay a court fee to start a claim and also face the same issue of having to pay the lawyer out of any damages recovered.

It is far from unlikely that in the above situation, the completely blameless victim might have no option other than not to pursue his or her claims, to accept that he or she would possibly get very little financial compensation after legal fees or to decide that it’s simply not worth the stress and hassle of doing anything, meaning that an employer who has let that employee down in a big way escapes scot free.

Both the personal injury system and employment tribunal system have been subject to some excess and abuse in the last 10 years or so, but the reforms that have been brought in certainly do not appear to be fair.

Types of Discrimination

There are four types of race discrimination:

Direct Discrimination

Direct race discrimination takes place when a person treats another person less favourably on racial grounds. It is for an employment tribunal to decide what constitutes less favourable treatment by comparing the treatment of the claimant to that of another racial group. The motive / intentions of the employer are irrelevant and there is no defence once direct discrimination has been proved.

It is important to note that in order for there to be direct discrimination it is not necessary for the claimant to have received less favourable treatment. In Weathersfield Ltd v Sargent [1999] IRLR 94 the employer was found to have been guilty of direct discrimination after instructing an employee, who subsequently resigned and was found to have been constructively dismissed, to discriminate against blacks and Asians.

Direct discrimination is permitted where there is a genuine occupational requirement (GOR) such as:

• Participation in a dramatic or other performance where the employment of a person of a particular racial group is necessary for authenticity; or
• In a place of food and drink where the employment of a person of a particular racial group is required for authenticity ; or
• Where the job role can be most effectively performed by a person of the same racial group as the people they are serving, for example, in a refuge.

Indirect Discrimination

Indirect discrimination takes place where all racial groups are treated equally, however, the effect of a particular practice imposed (on all employees) by the employer has an adverse effect on a particular racial group putting that racial group at a disadvantage. For example, in JH Walker Ltd v Hussain and Other [1996] IRLR 11, the employer was held to have been indirectly discriminatory when it decided that no holidays could be taken for its peak season between May and July. When the Muslim festival of Eid fell in June the company refused to make any exceptions to the policy even though its Muslim employees offered to work extra hours to compensate.

Employers have a defence to indirect discrimination if they can show that the practice is a proportionate way of achieving a legitimate aim. This requires an employment tribunal to consider whether there is a balance between the discrimination and the purpose of the practice taking into account whether there is an alternative way of achieving the same aim.

Harassment

Section 3A of the Race Relations Act 1976 defines harassment as unwanted conduct that either intends or has the effect of violating a person’s dignity or creates a degrading, humiliating of offensive environment. Employees are also protected from harassment by the Protection from Harassment Act 1997 which can force an employer to introduce steps to combat harassment. It allows employees to claim damages and / or injunctive relief in the civil courts and to prosecute in the criminal courts.

Victimisation

Victimisation provisions protect employees from being treated unfairly for brining claims of discrimination against the employer. In Chief Constable of West Yorkshire Police v Khan [2001] 1 WLR 1947 it was held that there are two stages for establishing harassment:

• A comparison between how the claimant is being treated with another employee who has not previously brought a complaint against the employer; and
• The less favourable treatment must be motivated by the complaint brought by the employer.

Vicarious Liability

Employers should be aware that they can be held vicariously liable for acts of racial discrimination by its employees during the course of their employment even where the acts have been done without the employer’s knowledge or approval. Employers will have a defence if they can establish that they took sufficient steps to prevent racial discrimination.

This post supplied by Ben Jones who blogs on Darlingtons employment law site which can be found at http://www.darlingtonsemploymentsolicitors.co.uk

In 2010, the Act replaced the previous anti-discrimination acts. There were historically a number of different statutes dealing with different types of discrimination, such as the Race Relations Act, the Disability Discrimination Act and the Sex Discrimination Act. The Act provides guarantees that individuals will not be treated differently as a result of having one of a number of defined characteristics which are protected. For example, the Act ensures that individuals must receive the same salary as someone else doing work that is ‘like’, ‘equivalent’, or ‘of equal value’.

The Questionnaire

In order to establish your case, you will need to demonstrate less favorable treatment and in many situations this is only possible after appropriate investigation – you might need to prove, for instance, that a man and a woman working in your company in the same or equivalent role would earn a different salary, which could be evidence of discrimination. To establish this, you can ask your employer to fill in the Equality Act Questionnaire, which is a set of questions which apply under section 138 of the Act.

From an employer’s perspective, responding to a Questionnaire is voluntary but inferences will be drawn if you fail to co-operate, either in full or part.

Why is it important?

The questionnaire enables employees to answer key questions early on in the legal process. It can dramatically speed up the case and can even avoid the necessity of going to an employment tribunal. In the event that the case is taken to the tribunal, the completed questionnaire is a clear and concise source of information and a simple way of presenting the complaint.

The questionnaire is important both for the complainant, and for the employer. While the complainant gets his or her questions answered, the employer also has the opportunity to explain and justify any differences or explain the circumstances that arose to the particular claim. It may be that there is an acceptable reason behind a perceived inequality, such as geographical concerns, or a need to incentivise in order to keep certain jobs filled.

If the factors the employer cites have resulted in an imbalance, then the employer needs to demonstrate that this is not due to discrimination (it could, for example, be due to economical concerns leading to workers doing long shifts and late hours at short notice being rewarded, which would penalise a greater proportion of women with childcare responsibilities.)

How it should be used ?

Whilst the Questionnaire is quite detailed, the questions are fairly generic and in many instances, to draw out the information which an employee may need to clarify whether discrimination is occurring, the right additional questions need to be asked. In many situations, experienced help either from employment investigators such as Blackhawk Investigations or employment solicitors can make the difference between uncovering discrimination or otherwise.

Confidential information can be requested and disclosed on the Equality Act Questionnaire. All factors which affect an employer’s treatment of employees are relevant. The employee is therefore allowed to ask the employer about the salary of equivalent colleagues for the purposes of the inquiry, in which case the permission of the ‘comparator’ should be sought.

Although the employer is not legally bound to respond to the questionnaire, it will not look good in an employment tribunal if the employer has refused to fill it in. The tribunal can draw conclusions if the form is more than eight weeks late, or if the answers are ambiguous or partial. The court may infer that if good enough reasons for the salary difference are not given, then the true reason must be discrimination.

How a solicitor can assist

After the form has been submitted, it may be that a suitable resolution can be reached, whether by an adjustment in position by the employer which is acceptable to the employee, although it should be remembered that when these situations arise, trust and confidence have often eroded to a point where the employment relationship has been severely damaged. In that situation, the best outcome may be a compromise agreement to terminate employment. Failing that, the case may well go to the employment tribunal where a solicitor can represent you and argue your case.

The majority of well drafted legal agreements for the sale or purchase of a business or company or a shareholders agreement governing how the company is to be run on a day to day basis should provide for how the company or business is to be valued in the event of a sale.

We have all seen these “expert valuer” clauses in documents and they often appear to be a fairly standard clause which people tend to skip past when negotiating a contract and don’t think of the potential impact at a later stage if the clause is not well drafted. Unfortunately this can lead to fairly serious issues.

There is a wealth of case law which considers the problems that can arise. One particular case, that comes to mind is Doughty Hanson & Co Ltd v Bruce Patrick Roe, this considers whether an expert valuation could be challenged because of an alleged mistake by the valuers.

In this particular case, a firm of accountants was appointed as valuers, but didn’t consider all relevant matters when reaching their conclusion as to the valuation of a company. Now Common sense would dictate that if a valuer makes a mistake when producing their valuation that it could be set aside, however unfortunately case law does not seem to share this view.

Mr Justice Mann was of the view that the expert determination couldn’t be challenged on this basis. The accountants who had been instructed as valuers had set out in their engagement letter that their final valuation would include all of their various assumptions and analysis as to how they had reached their conclusion. However they didn’t leave any part of their reasoning process open to scrutiny and the Judge refused to look behind the valuation. The Judge made it clear that the valuers had applied a valuation technique that was perfectly acceptable. Despite the fact that they had adopted a hypothesis that would not be used by other valuers, that wouldn’t necessarily mean they had valued something different and indeed had they adopted an erroneous hypothesis that would be a mistake which a valuer acting as an expert was entitled to make. So you can see that in this case you could end up seriously out of pocket if the valuation doesn’t match what you believe the true value of the business or company to be.

If your commercial contract doesn’t expressly provide that an expert valuers decision can be challenged then a court will only allow you to challenge on very limited grounds. The principle ground on which a party can challenge an expert determination is that the expert has materially departed from his or her instructions.

This is why it is so important that when considering whether now or in the future you will have to appoint an expert, firstly you appoint a firm of accountants that know what they are doing and secondly that your instructions to the expert, including the proposed formula which should be set out in the commercial agreement is extremely clear and detailed.

So, unless the parties have agreed to the contrary the expert does not have to give any reasons for his decision or extensive details as to how the decision was reached. There are two types of valuations which the parties can require an expert to produce, a speaking valuation which must be reasoned or a non speaking valuation which does not have to provide reasons or details as to how the conclusion was reached.

I always advise my clients that if possible to request a speaking valuation. In terms of negotiating contracts there is in my experience generally very little resistance to amendments of expert valuation clauses. If you do go for a speaking valuation then, in practice, this means that the scope for challenging the expert’s conclusions in court is increased. For example if there is manifest error, its extremely difficult to prove if a court cant look behind a valuers decision. So it is beneficial if your valuers are contractually required to provide reasons in which case they must explain the background to their conclusion and if a court thinks these reasons are inadequate they will direct the expert to provide further detail.

I worked on a case which concluded about a year ago whereby the valuer on whom our client was obligated to rely valued a plot of land approximately £3m less in value then 3 subsequent valuers. Our client was as you can imagine not best pleased. That case did have a happy ending but only because our client managed to secure a deal.

Business valuations also come into play when a party decides to sell a business although they are not necessarily contractually bound to do so.

In that case the valuation process is generally much less fraught as the parties can chose who they wish to value the business and on what terms. Although it is important to note that certain general assumptions should be taken into account when valuing a business for sale as the purchaser will be scrutinising the valuation and going through it with a fine tooth comb and looking for anyway they can to chip the price.

Its worth thinking fairly far in advance (if you can) about selling your business and getting all of your ducks in a row prior to the purchaser starting the due diligence process. For example, make sure all of your company books are up to date, all necessary filings made to companies house, the articles of association are sufficient (and up to date with the Companies Act 2006), all contracts in order and the correct structure in place.

You don’t want any nasty surprises yourself when the legal and financial due diligence process is commenced and the purchasers valuers looking through your accounts. It is preferable to have your lawyers and accountants involved with any transaction from the early stages if you can, to help things move more smoothly.

Additional useful resources

Selling or buying a business can be a fairly daunting prospect even for those who regularly carry out such transactions so it is important to know your company from the inside out and make sure it is compliant, to make sure any deal runs smoothly.

The agreements are generally quite standard, as they are statutorily based and one of the features of compromise agreements is that the employee must receive independent and qualified legal advice which the employer normally pays for.

In the majority of compromise agreements, there is an ex gratia payment made to the employer, in addition to contractual notice money, to encourage the employee to sign. This tends to be in the order of 2-4 months equivalent salary but does differ depending on the underlying legal issues or disputes between employer and employee.

So, we’ve established that most agreements are fairly standard and without a lot of difference typically in the inducement. It’s then up to the employee whether to sign up or take his or her chances by perhaps making a claim for unfair dismissal or discrimination or trying to remain in post even though he or she knows that the employer would really rather they leave.

But, in some situations and sectors, compromise agreements can be more complicated, especially for those in the Financial Services sector or senior employees such as directors. Often in those situations, the employer will seek to incorporate additional clauses into a compromise agreement in the form of post employment restrictive covenants, whether tehse were included in the contract of employmenyt or not. In addition, the issue of contracual rigfhts can be diffciult, as regards things such as bonuses, share options and other benefits, and these agreements can require an additional and ex[pert amount of negotaition.

If you have been offered a compromise agreement of the more straightforward variety a good firm for compromise agreements is Darlingtons Solicitors. If you need compromise agreement solicitors in London who specialise in the complex and high value situations, Gannons are excellent in this regard.

No amount of compensation can fully cater for the inconvenience, pain, loss, stress and any loss in earnings experienced by the accident victim.

All accidents that happen at work are different with different levels of injuries experienced. Some injuries can be life threatening especially where brain damage is concerned resulting in permanent disability. Most of the employers opt settling the claims made for the injuries experienced out of court. This is usually the case with accidents which are common at the work place. The amount of compensation to be paid for such injuries is usually set beforehand. This is because they are insured for such claims by reputable insurance companies whereby the insurance pays for the third party claims. This can take a short time to settle. Sometimes, the employer can prove to be difficult in settling such a claim and at such a time, the victim needs to engage the services of a personal accident solicitor who will make the claim on your behalf.

A person who has suffered from an injury at his place of work needs to ensure that the incident has been recorded in the company’s accident book, a book that each company is supposed to have in its premises. The details of the injury, the day and time when the injury occurred should be put in writing for future reference. This book will be used later when the victim is making a claim for the injury suffered.

A person making a claim should also have a witness to give evidence about the role the employer has played in making the accident happen. The notes that the doctor who has examined the victim  can also be used by the patient in making the accident at work claim. An ambulance that had collected the injured person can also be used as evidence of injury at work.

If any accident at work claim has to be considered, the victim has to seek for compensation for the injury suffered before three years have elapsed since the day the injury occurred.

This post authored by Lloyd Green Solicitors, specialist personal injury solicitors.