Registered office

The registered office is a Company’s official address and all formal documents must be served there. If a company changes its registered office address the new address must be notified to Companies House. Below are a few key points to keep in mind:

1. Every company must have a registered office (Companies Act 1985 section 287 (1)).

2. The official registered office of a company must always have a notice outside the office stating the name of the company. Also, details of the registered office must be shown on all invoices, order forms, letterheads, websites and monetary documentation (Companies Act 2006).

3. The statutory books must be kept at the registered office including the Register of Members, the Register of Substantial Interests, the Register of Debenture holders and the Register of Charges. In some instances the registers can be kept at other addresses after formal notice has been given to Companies House.

4. For small businesses (or for young entrepreneurs working from home) it is important that prospective customers have the confidence to trade with them and have a high profile. To achieve this, many businesses secure a prestigious registered office address, often in central London.

Resolving workplace disputes - amended Code of Practice

As of 6 April 2009 the government has reformed the processes of dealing with problems at work. These changes put less emphasis on the mechanics of how to manage disciplinary issues, grievances or dismissals and places the onus on flexibility to resolve problems at an early stage. The content of the Code is easy to grasp and straightforward. On handling disciplinary issues and dismissals it sets out the following steps for employers to follow:

· establish the facts of each case
· inform the employee of the problem
· hold a meeting with the employee to discuss the problem
· allow the employee to be accompanied at the meeting
· decide on appropriate action
· provide employees with an opportunity to appeal.

More information can be found in our article 'Resolving workplace disputes'.

Contracts of employment

As a vast majority of businesses need employees in order to expand, company directors, sooner or later, have to face the prospect of recruiting people and familiarise themselves with employment law. Employment law, together with discrimination and data protection legislation all have major roles to play throughout the recruitment process.

Employment status

A person can be an employee or self-employed. Both have different legal, tax and National Insurance contribution implications and employers must be aware of these differences to know which category suits their business best. For example, a person can be classified as self-employed for tax purposes but as an employee for purposes of employment rights.

Contract of employment

Usually an employment is offered in a letter although it is not uncommon for it to be offered verbally. It is important that the letter is made subject to the company’s standard employment terms and conditions. However, once an employment starts, the employer is obliged to give the employee a written statement of particulars of employment no later than two months after the employee has started work. The statement sets out the terms that have been agreed between the employer and the employee, such as job title and description, starting date, place of work, salary, benefits, required hours of work, holiday and sickness entitlement, notice periods, grievance arrangements and disciplinary procedures. Often, employers include in the contracts of employments provisions for confidentiality, restrictive covenants and other provisions.

It is also common practice to provide new employees with the company’s Health and Safety Policy, Equal Opportunities Policy, Data Protection Policy and other important company documents together with, and referred to in, their employment contracts.

Contract to provide services

A contract to provide services is an agreement by which one person agrees to provide another with a service, but not necessarily undertaken by that person personally. A contract for services is typically used by a self employed person or between a temporary agency worker and the agency.

Directors as employees

A company directorship is an office and not an employment. However, the company can enter into a service contract with a director and then such a director would be an employee of the company. Where this is the case, the company must provide the director with an executive employment contract. It should be noted that the office of a director has different tax and National Insurance Contributions implications from that of an employee.

Conclusions

Contracts of employment exist to clarify both employment rights and obligations. They should detail benefits and entitlements due to the employee as well as set out what is expected from them.

It is a legal obligation in the UK for employers to provide employees with a contract of employment within two months of starting work. Despite their obligatory nature, employers should appreciate that they are hugely beneficial for a company. For example, they can be used as a mechanism to lock in highly skilled members of staff into a specific timeframe, by obliging them to offer a greater period of notice. Ultimately, employment contracts should not be perceived as another piece of paper work, but as a device to protect and strengthen a business.

Compromise agreements

As a general rule, any provision in an agreement which excludes an employee’s right to start legal proceedings against their employer is unlawful. The employee, even after receiving the agreed compensation from the employer in full, may complain to an employment tribunal. The exception to this rule is where an employer and employee have entered into a compromise agreement, which fulfils statutory requirements.

What is a compromise agreement?

A compromise agreement is a formal and legally binding agreement made between an employer and an employee (or ex-employee as the case may be) under which an en employee agrees not to pursue any claims in relation to his or her employment or its termination in return for a financial settlement.

When is a compromise agreement used?

An employer may consider using a compromise agreement as an alternative to going through disciplinary or performance review or redundancy procedures with the employee concerned.

A compromise agreement may be used to resolve all existing disputes and possible future claims once and for all without the necessity of going through tribunal or court proceedings.

Compromise agreements may also be used to settle serious grievances raised by employees, such as constructive dismissal and unlawful discrimination claims.

What are the benefits of using a compromise agreement?

A compromise agreement would be appropriate where the employer desires to take an employee out of the workplace quickly, as it saves the employer going through time-consuming statutory procedures.

A compromise agreement will generally avoid the uncertain outcome of a tribunal or court hearing while at the same time shields the employer from potential unfavourable publicity.

Conclusion

A compromise agreement is a fast and straightforward way to achieve a mutually satisfactory settlement for both the employer and employee. A compromise agreement will also avoid the costs and uncertainty of legal action.

However, compromise agreements are complex legal documents which must fulfil a number of statutory requirements in order to be legally binding. Furthermore, an employee must receive independent legal advice from a ‘relevant independent adviser’ within the meaning of the legislation governing compromise agreements, before signing a compromise agreement. It is therefore recommend that the preparation and review of compromise agreements should always be carried out by experts.

Transfer of undertakings – employment contracts

The process of transferring staff to a new employer as a result of a transfer of a business or undertaking, or a part of one is regulated by the Transfer of Undertakings (Protection of Employment) Regulations 2006, known as the TUPE Regulations. Its aim is to preserve the continuity of employment of those employees who are subject to the transfer.

The main prerequisite of the Regulations is that employees employed by the previous employer automatically become employees of the new employer when the transfer takes place. Terms and conditions included in their contracts of employment remain unchanged, with the exception of certain occupational pension rights. The new employer is obliged to take over all the contracts of employment of all permanent employees. The contracts cannot be terminated just as a result of the transfer.

The new employer also takes over all the rights and obligations arising from these employment contracts, including outstanding liabilities of the previous employer, such as breach of contract or sex discrimination which occurred before the transfer took place.

The Regulations describe circumstances when it is possible for the previous or new employer to vary terms and conditions of employment contracts. More information can be found on ACAS website.