Registering the Times: Changes to Company Law

Present

Legislation will soon come in to force which will make changes to the registration of company charges. The changes will simplify the process by creating a single, UK-wide system of registration.

Securities which are created by a document are required to include a certified copy of the instrument with the form. However, it was the case that the instrument was not available to view; only the form which was submitted with it. The new system provides for the instrument to be accessible to the public. This should improve the transparency of the registers. Information submitted does not always provide interested parties with sufficient details regarding the conditions attached to security. There will be a limited exception in terms of which it will be possible to redact personal information about connected individuals.

Another practical consequence of the new system is that it will now be possible to electronically register securities. It will cost £10 to file electronically or £13 to submit a paper copy of the security.

Companies negotiating the terms of a charge which may be registered under the new system should remember that the accompanying forms will change for charges created on or after 6 April, so they should be vigilant when submitting the charge for registration that they use the correct form.

Equivalent provisions will also apply to Limited Liability Partnerships.

Future?

The European Commission has launched a consultation regarding the requirement for, and feasibility of, the introduction of legislation to allow companies to transfer their registered offices across borders.

The Commission is conducting this consultation to ascertain whether there is a demand from companies for such transfers and whether clarity of the law is required.

The Commission is seeking contributions to the following questions posed:

  • Whether companies are currently contemplating cross-border transfers of their registered office or have done so in the past
  • The means that a company may currently use to effect a cross-border transfer
  • The barriers that currently exist for a company that wants to effect such a transfer, e.g. costs, complicated administrative requirements
  • Why a company may wish to effect a transfer, or what would make companies more likely to contemplate a transfer
  • Whether there is an adequate procedure in place in the EU and whether case law provides an adequate solution
  • Whether there is a need for a legislative instrument to deal with cross-border transfers

We would be interested to have your thoughts on these questions and whether you consider that there is an appetite for such a development.

The current situation in the United Kingdom would require the transfer of the assets of a UK registered company to a newly incorporated company in another EU member state and the subsequent dissolution of the UK company.

One legislative change that we think would be of benefit to a greater number of UK companies would be the ability for a company in England to change its registered office to an address in Scotland, and vice-versa.

The questionnaire for responding to the consultation is available to complete and submit until 16 April 2013.

 

Kelly Craig
Solicitor – Corporate & Commercial
 
 

Forced Retirement – Further Litigation

You may recall the landmark decision in Seldon v Clarkson Wright and Jakes issued by the Supreme Court last year where it was decided that a law firm which required one of its partners to retire at age 65 had not acted unlawfully.  For a summary of the decision see my colleague Sarah Winter’s report:

http://blackaddersbusinesslegalnews.com/2012/04/26/employment-compulsory-retirement-at-65-and-other-landmark-ruling/

Following the abolition of the default retirement age in April 2011, it remains possible for employers to insist on a fixed retirement age.  However, to avoid age discrimination claims, employers would need to demonstrate that imposing a mandatory retirement age (which is form of direct age discrimination) is a “proportionate means of achieving a legitimate aim”.  Importantly, in the landmark case reported above, the Supreme Court decided that the law firm’s objective of allowing promotion opportunities for younger solicitors by succession planning was legitimate.  That case was remitted to an employment tribunal to determine whether insisting upon retirement at the age of 65 (as opposed to a different age) was a proportionate means of achieving the legitimate aim of succession planning within the workforce.

This area of law looks set to be further tested by employment tribunals south of the border.  Five police forces have been served with employment tribunal claims from over 250 former officers who were forced to retire under “Regulation A19”.   Regulation A19 is no longer relied upon by police forces but previously it allowed officers who had served more than 30 years to be compulsorily retired.  Police forces used Regulation A19 as a means of removing officers due to funding cuts (crown servants such as police officers cannot be made redundant).

As these cases progress it will be interesting to see what unfolds.  It is not clear at this stage what the claims relate to.  However, it is likely that the claims will involve some form of age discrimination angle (either direct or indirect age discrimination).  It is also likely that further legal arguments will be heard on the employers’ justification defence.  The forces in question are set to oppose the claims vigorously.

In the earlier Supreme Court case it was decided that the justification defence is different depending on whether the allegation relates to direct discrimination or indirect discrimination.  In direct discrimination cases, justification must relate to employment policy and labour market whereas matters particular to an employer’s own situation (such as funding cuts) are generally not legitimate.  Justification in indirect discrimination claims focuses more on whether the employer can justify their own practices which means that funding cuts may be more relevant than in direct discrimination claims.

Watch this space for further developments with these topical cases.

 

Jack Boyle
Solicitor – Employment Law

Charities: charitable status to be stripped from adoption agency favouring same-sex couples

OSCR, the Scottish charities regulator, may strip an adoption agency of its charitable status because it discriminates against same-sex couples. St Margaret’s Children and Family Care Society is an adoption agency based in Glasgow with ties to the Catholic Church.

The regulator’s investigation was triggered by a complaint that, when selecting parents for adoption, the charity gives preference to couples who have been married for 2 years. OSCR considered this to be a breach of the Equality Act which makes it unlawful for a service provider to discriminate on the grounds of a ‘protected characteristic’ such as sexual orientation.

OSCR’s finding follows the English Charities Commission’s decision to refuse to allow an adoption agency to amend its constitution to restrict its services to heterosexuals. That decision fuelled public debate and was challenged in the English tribunals but was eventually upheld.

This case is also set to divide public opinion: UK adoption legislation makes it clear that same-sex couples can adopt, but should a charity be restricted from setting selection criteria in accordance with its religious principles? Yes, says OSCR. Whilst there are some religious exceptions to the Equality Act, they do not apply to charities when they are carrying out services for the public, such as an adoption agency.

What does this mean for charities? Charities need to consider whether they discriminate on the grounds of any ‘protected characteristic’ under the Act; these are:

• Age
• Disability
• Gender identity and gender reassignment
• Marriage or civil partnership (in employment only)
• Pregnancy and maternity
• Race
• Religion or belief
• Sex and sexual orientation

The law recognises that charities sometimes restrict the kind of people they benefit because this helps prevent or compensate for disadvantage (such as Age UK (previously Age Concern and Help the Aged), or is a justifiable way to achieve a beneficial aim (such a drop in centre for female crime victims who would not go if it was open to men).

St Margaret’s Children and Family Care Society has until 22 April 2013 to amend its procedures and assessment criteria to meet the requirements of the Act or its charitable status will be removed. The decision is open to appeal.

Sarah Winter
Senior Solicitor, Charities Team

Employment: New Year’s Round Up

Date (2013) Change Detail

 

1 Feb Annual increases in tribunal awards limits/statutory redundancy week’s pay The upper limit on unfair dismissal compensatory awards will rise from £72,300 to £74,200, and the maximum week’s pay figure will increase from £430 to £450
March Parental leave The right to unpaid parental leave will increase from 13 to 18 weeks per parent per child in line with the EU parental leave directive
April SMP and SSP increases SMP will increase from £135.45 to £136.78 and SSP will increase from £85.85 to £86.70, most likely with effect from the week commencing 8 April 2013
Probably April Consultation period for collective redundancies The minimum collective redundancy consultation period, in redundancy situations involving 100 or more employees at one establishment within a 90-day period, will be reduced from 90 days to 45, and the expiry of fixed-term contracts at the end of their term will not trigger collective redundancy consultation obligations.  A new, non-statutory, ACAS Code of Practice will also be introduced, to include guidance on the meaning of ‘establishment’
Probably April Rights for shares Employers will be able to offer employees £2k – £50k worth of shares in their company, free of capital gains tax, in return for them agreeing (1) to give up rights in respect of unfair dismissal, redundancy, flexible working, and time off for training, and (2) to provide 16 weeks’ notice of a firm date of return from maternity or adoption leave, instead of the usual 8.  The Bill is likely to be passed early in the year with the changes most likely to come into force in April
Probably April Enterprise and Regulatory Reform Bill The Bill provides for (1) all tribunal cases to be submitted for ACAS conciliation (2) some cases to be determined by ‘legal officers’ rather than tribunals (3) EAT judges generally to sit alone (4) confidentiality of evidence of pre-termination negotiations (5) a more flexible power to set and vary the statutory maximum limit on the unfair dismissal compensatory award (6) a new power to impose financial penalties on employers where they have breached a worker’s rights and there are aggravating features (7) whistleblowing protection to be confined to disclosures made in the public interest (8) ‘compromise’ agreements to be renamed ‘settlement’ agreements (9) a narrowing of the remit and powers of the Commission for Equality and Human Rights (10) removing liability for third party acts of harassment (11) removing Equality Act 2010 provisions for obtaining information for proceedings and (12) regulations to be made requiring tribunals to order equal pay audits. The majority of the employment provisions will probably be brought into force in April, subject to consent from the Scottish Parliament in relation to devolved matters
Probably summer Tribunal Fees The introduction of a fee structure for tribunal claims
October Executive pay reporting requirements Directors’ remuneration reports will need to include (1) a report detailing the remuneration policy, which will need shareholder approval, and (2) a further annual report on how the remuneration policy has been implemented, to include details of actual payments made, expressed as a single figure for the total pay received by any given director
October Gender Reporting Changes to reporting requirements will include a requirement for quoted companies to report on the gender mix of those on its board and throughout the company