Property Factors (Scotland) Bill passed by MSPs

New legislation which will introduce statutory regulation of property factors to protect consumers in Scotland has been approved by MSPs. The Property Factors (Scotland) Bill was passed in the Scottish Parliament on Friday 3 March 2011 after attracting cross-party support.

The Bill introduces a registration scheme and a statutory code of conduct for property factors. It will be an offence for a property factor to operate in Scotland without being registered, and will introduce an accessible form of alternative dispute resolution. This will be reinforced by a code of conduct setting out minimum standards of practice for registered property factors.

Please see my blog entry from 29 September 2010 for a more in-depth discussion on the content of the Bill. The Bill now goes forward for Royal Assent and will come into force on a day or days to be set by Order.

Patricia Ferguson, MSP for Glasgow Labour, who promoted the Bill has said “The Bill recognises the plight of people who have suffered at the hands of unscrupulous factors – people identified during the consultation on the Bill, people recognised by the Office of Fair Trading in their report into property management across Scotland and the people who have come to our surgeries. In short, people have come to this Parliament for help because it can be found nowhere else…This legislation will help to root out the rascals in the industry and give it the opportunity to show that most factors do work to high standards.”

Nicola McCafferty
Commercial Property

Best Bar None Scotland National Awards 2011

The first ever Best Bar None Scotland Awards ceremony is due to take place on Sunday 6 March 2011 at the Apex City Quay Hotel & Spa, Dundee.

The scheme now in its 7th year is sponsored by Diageo and The Scottish Government and is open to all on-license premises in participating areas.  It focuses on public safety and customer care and offers each venue an opportunity to demonstrate that it is committed to addressing important issues such as: Prevention of Crime and Disorder, Public Safety, Prevention of Public Nuisance, Promotion of Public Health, Protection of children from harm.

In the last 12 months 335 premises have been accredited in Scotland.  Thirty of these were nominated by their local coordinators as national finalists in the bar, pub, nightclub and specialist entertainment categories.  Representatives from each of these premises will attend the event where all nominated venues will receive a national finalist award.  The overall winner in each category will also receive individual awards recognising their achievement.

The event will also be attended by Kenny MacAskill, MSP, Cabinet Secretary for Justice in Scotland, John Letford, The Lord Provost of Dundee Alan Dobie, Executive Director of the Scottish Business Crime Centre and Mark Baird from the main sponsors Diageo.

G4S are sponsoring the nightclub category and Blackadders Solicitors are sponsoring the Pub category.

It is anticipated that the event will be attended by approximately 260 guests from throughout Scotland the majority of whom will be eagerly awaiting to see if they will be the first ever recipients of one of these national awards.

Alan Dobie said “The Best Bar None scheme is an excellent way of rewarding, recognising and promoting good practice in local licensed premises. The safety of people who visit licensed premises to enjoy themselves is of paramount importance and contributes to the night-time economy in Scotland in a very positive way.  I am delighted that we are recognising the best of the best at this gala event”.

Gender as a risk factor in assessing premiums

In a recent judgment by the European Court of Justice (ECJ), it was found that it is not legal for insurers to treat men and women differently for the purposes of calculating insurance premiums. This will have obvious implications for both the motor and life insurance industries. There has been a significant amount of press coverage given to this matter and are still questions as to how this will unfold within the UK.

The present position

Currently, insurers are permitted to use gender as a factor in assessing the risk level involved in insuring someone, which feeds directly into the level of premium which that person must therefore pay. This is legal so long as there are relevant statistics behind the decision. For instance, in motor insurance, the Association of British Insurers (ABI) state that young male drivers are statistically more likely to be involved in a car accident than young women: they present a greater insurance risk and so must pay a higher premium for their car insurance.

Future changes

Following the ECJ ruling, insurers in the UK will not be able to use gender as a risk-assessment factor after 21 December 2012. It remains to be seen how this will develop in practice within the UK, however the ABI states that it is more likely that we will see women’s insurance premiums rise rather than men’s premiums fall.

Implications for other industries

This ECJ ruling only affects insurance services. However it is noteworthy that pension providers also operate similar practices regarding gender: currently it is more expensive for women to purchase annuities due to their longer life expectancy. Additionally a person’s gender also affects how scheme benefits are calculated: in the factors used for calculating commuted lump sum payments, transfer credits and transfer payments.

These practices are open to the same criticism which the ECJ made of the insurance industry. On that basis, future changes to the costing of pension services are entirely possible. As such, it would be wise for both insurers and pension providers to closely monitor developments in this area over the months to come.

Stewart Dunbar
Trainee Solicitor

Administrations: TUPE or not to pay?

The TUPE Regulations 2006 provide certain protections to employees whose employer transfers its business or undertaking to another party.

In an attempt to encourage the rescue of failing businesses, the regulations offer certain protections to the acquiring party where the transferor employer is subject to relevant insolvency proceedings.  This means insolvency proceedings which are commenced not with a view to liquidation of the transferor’s assets.  This includes administration.

Certain debts which the transferor employer owes to employees do not transfer to the new employer (transferee).  These are the redundancy payments, arrears of pay, notice pay and holiday pay which employees can recover from the National Insurance Fund i.e. up to the maximum of £400 per week.  Liability for amounts due to employees in excess of £400 per week (or greater than 13 weeks’ arrears of pay) will potentially pass to the acquiring party.  The regulations provide greater scope in relevant insolvency situations for the acquiring party to vary an employee’s terms and conditions of employment.

The regulations also provide that some of the protections offered to employees in ordinary circumstances do not apply where the transferor is subject to insolvency proceedings which have been instituted with a view to liquidation of the transferor’s assets.  Thus, if the transferor employer is in liquidation, its employees will not automatically transfer to the transferee and will not benefit from protection against dismissal in connection with the transfer (i.e. a dismissal in connection with the transfer will not be automatically unfair).

The Employment Appeal Tribunal recently issued its decision in OTG Limited v Barke, where it confirmed that a pre-pack administration can never qualify as “insolvency proceedings with a view to the liquidation of the transferor’s assets”.  A pre-pack administration is one where the deal to sell on the business is agreed before the transferor company enters administration, and takes effect immediately following the administrator’s appointment.  Accordingly, on the sale by the administrator, regulations 4 and 7 of TUPE will apply.

Essentially this means that employees who are employed by the company in administration immediately before the transfer will automatically become the employees of the acquiring party on the same terms and conditions of employment as before. They will also have the benefit of protection from dismissal in connection with the transfer.

Jack Boyle
Trainee Solicitor