18 March 2021
BTOverview In this edition
No jab, no job?
New Lanark - A “one-off” or the way forward?
When is it an abuse of process not to settle?
Cladding in Commercial Buildings
Opt-out Organ Donation
WEBINAR: Protecting Your Brand Online
BTO NEWS
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No jab, no job? Douglas Strang considers the so-called “no jab, no job” rules now that the UK’s coronavirus vaccination programme is well under way.
The UK’s coronavirus vaccination programme is well under way. For employers, there has been much discussion of so-called “no jab, no job” rules. What are my health and safety obligations in relation to the vaccine? As an employer you have a duty on an ongoing basis to ensure, so far as reasonably practicable, the health, safety and welfare at work of your employees. The Covid pandemic has raised the prospect of employees being exposed to risk in the form of other members of staff who are carrying the virus. You need to assess and address these risks, and the question of whether staff have been vaccinated will have a direct impact on the health and safety of others. Many employers want to ask staff whether they have been vaccinated. Are there data protection considerations? There are undoubtedly significant data protection issues in having employees disclose sensitive personal data (about health issues – whether they have had or intend to have the vaccine). This will be special category and employers will need a lawful basis for collecting and using that data. Employers may be able to process data where it is necessary for the purposes of carrying out obligations or exercising rights in the field of employment law. Whether or not the processing is necessary will vary on a case-by-case basis, and expert advice should be taken. Can I sack an employee who won’t be vaccinated? This is certain to be a heavily litigated issue over the next year or so. The answer will differ depending on whether the employee has reached the critical milestone of 2 years’ service and acquired the right not to be unfairly dismissed. Employees with over 2 years’ service The employer needs to show a “potentially fair” reason for dismissal, and it must have been reasonable to dismiss for that reason. The reason relied on here may be misconduct – that the employee refused to comply with a lawful and reasonable instruction (to be vaccinated) – or “some other substantial reason” (that continuing to employ the 1
employee poses an unreasonable risk to the health of others). Whether an instruction to get a vaccination is lawful and reasonable is perhaps not an easy question. We would not traditionally have thought that an employer has the right to instruct the employee in relation to medical matters. There are human rights considerations. An employment tribunal would need to consider whether, in all the circumstances, it was reasonable to dismiss – taking account of the nature of the role, the specific risks posed, ability to redeploy to other work or amend duties etc. An employer will need to take every factor into account and act cautiously - a blanket approach of dismissing all who refuse to be vaccinated is unlikely to be successful. When might dismissal be justified? It is thought that in particular roles, (for example dealing with service users who have vulnerabilities), an employer may as a last resort be able to justify dismissal, but there are a number of risks and an employer would be expected to follow a fair process and to fully consider any alternatives. Certainly, the employer would need to consider the risk of discrimination claims where those employees with particular religious or philosophical beliefs, or health vulnerabilities, or who are pregnant, may not wish to take the vaccine. Where the refusal to be vaccinated relates to a “protected characteristic”, the employer may need to justify dismissal, or other detrimental treatment, as being a proportionate means of achieving a legitimate aim. Dismissal would need to be a last resort. Employees with less than 2 years’ service Here, employers are in a stronger position. There is no right to claim “normal” unfair dismissal, but the discrimination risks mentioned above still apply, and employers would have to tread very carefully. Can I refuse to hire someone who refuses to be vaccinated? Again, there is no unfair dismissal risk, but discrimination claims could be brought if the reason for not wanting to be vaccinated engages a protected characteristic.
How should employers approach these matters? ACAS has issued helpful guidance for employers. ACAS does not recommend making vaccination mandatory, but urges employers to support employees and encourage them to get the vaccine. ACAS advises sharing information with staff about the vaccination programme and maintaining an open dialogue. Your communication strategy will be key. If an employer feels that vaccination is a necessary requirement for someone to do their job, then they should work with staff members, or the recognised trade union, to address this. This is a complex area with a real risk of claims arising and expert advice should be taken.
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This update contains general information only and does not constitute legal or other professional advice. Please contact our Employment Team should you require assistance in relation to your obligations as a result of new risks created by the coronavirus pandemic, or regarding any other employment issue. Caroline Carr cac@bto.co.uk / 0141 225 5263 Laura Salmond lis@bto.co.uk / 0141 225 5315 Jacqueline McCluskey jmcc@bto.co.uk / 0131 222 2936 Rhona Wark rmw@bto.co.uk / 0141 225 5296 Douglas Strang dst@bto.co.uk / 0141 225 5271
New Lanark - A one-off or the way forward? Marion Davis, an accredited specialist in Charity law, outlines why the existence of large scale commercial activity does not automatically prevent an organisation from gaining charitable status. On 29 January 2021, the Inner House refused appeals by the Office of the Scottish Charity Regulator (“OSCR”) and ordered OSCR to enter two commercial entities into the Scottish Charities Register. This decision provides guidance for those working with charities and for charities themselves on how trading activities interact with Scottish charity registration.
Inner House Decision 1. Clarified that the UT’s description of activities having “dual purpose” did not mean that those activities were only partially primary purpose trading. A “balancing exercise” is only required if some activities do not further charitable purposes which was not the case in this instance.
Facts Two subsidiary trading companies (the “Respondents”) were established to produce income to be donated by gift aid to New Lanark Trust - the charity responsible for managing the UNESCO World Heritage Site of New Lanark.
2. The UT’s decision was in accordance with the OSCR guidance because it found the trading activities were all primary purpose trading. The UT’s intention was to clarify that OSCR guidance does not equate to legal interpretation of the statute, but it did not reject that guidance or find it to be wrong.
OSCR refused to enter the Respondents into the Scottish Charities Register on the ground that the Respondents’ activities as a whole did not provide public benefit within the meaning of section 7(1)(b) of the Charities and Trustee Investment (Scotland) Act 2005, and as such, they failed to meet the Charity Test.
3. Individual elements of activities should be assessed in furtherance of charitable purposes.
OSCR drew a distinction between activities undertaken that directly advanced charitable purposes and other significant non-charitable activities with a large combined turnover that neither advanced such purposes, nor were a by-product thereof. Upper Tribunal Decision The First Tier Tribunal (“FtT”) upheld OSCR’s decision. This was quashed by the Upper Tribunal (“UT”) who decided that the FtT failed to provide proper adequate and intelligible reasons for its decision. In re-making the decision, the UT found that the commercial activities of the Respondents in the overall setting of the New Lanark furthered charitable purposes and amounted to a public benefit in themselves. The activities “contributed to objectives of maintaining the village as a living entity and to satisfying the needs and expectations of visitors”. The UT held that in situations where a commercial activity could have the dual purpose of furthering a charitable purpose and raising funds, it was not necessary to carry out a balancing exercise. If the activity furthered the charitable purpose and provided a public benefit, it was irrelevant that it simultaneously raised funds for its own benefit or for that of another charitable body. 1
4. The New Lanark context is considered almost unique: “Another tribunal might have reached a different decision but standing the evidence and the acceptance of the uniqueness of the village, and the aim of presenting it as a living, working community, the UT was entitled to make the findings which it did.” Despite the distinct characteristics that feature in this case, a key point to note is that the existence of large scale commercial activity does not automatically prevent an organisation from gaining charitable status. So it is, perhaps, neither a one-off nor the way forward for all. Instead, a broad inquiry into all trading activities should be made in order to establish where charitable purposes are furthered and what public benefit accrues (if any). If you have any queries regarding how this case might impact on trading activities undertaken by, or for, a charity please contact us. Marion Davis mda@bto.co.uk / 0141 221 8012
When is it an abuse of process not to settle? Angus Wood asks if you can be obliged to accept a settlement proposal during litigation.
It is a laudable goal for all parties to litigation to seek to reach an amicable settlement to disputes. It creates certainty, avoids stress and heartache and limits costs. However, surely no one can be obliged to accept a settlement proposal? This is the question which the Court of Session considered recently in the case of Cheyne v Balmoral Group Holdings Limited. The case concerned an unfair prejudice petition under s994 and s996 of the Companies Act 2006, which allow the court to grant relief to minority shareholders which have been unfairly prejudiced by the conduct of the majority. Unfair prejudice actions Unfair prejudice actions are an unusual species as the goal of proceedings is to secure a fair outcome, rather than giving effect to specific obligations. In order to do so, the court can grant a wide range of relief, including orders regulating the management of the company. However, it will often be the case that the relationship between the parties has broken down to such an extent that they could not continue to work together. As a result, the most common order in an unfair prejudice petition is for the minority to be bought out by the majority. Against this background, the court considered Balmoral’s application to dismiss the petition on the grounds that the petitioners had refused a settlement proposal which Balmoral said resolved any potential unfair prejudice the petitioners may be suffering. Balmoral argued that continuing with the petition when such an offer had been made amounted to an abuse of process. It is well established that the courts in England can dismiss an unfair prejudice petition as an abuse of process where the court considers that a reasonable offer has been unreasonably rejected. Abuse of process is, however, a much wider concept in England than in Scotland, where the idea of an abuse of process is generally reserved for particularly egregious conduct.
Notwithstanding the significant difference between Scots and English law in this regard, the court accepted that it was open to the Scottish courts to dismiss an unfair prejudice petition where a reasonable offer had been rejected. Crucially, the court considered that it was only appropriate to dismiss a petition where the rejected settlement proposal offered all the remedy which the petitioner could reasonably expect to obtain assessed on the assumption that the petitioner would prove their case in full. In the Balmoral case, the court ultimately concluded that the offer which had been rejected did not offer the petitioner everything they could reasonably expect to obtain. However, the acceptance, in principle, that a court may dismiss a petition where a reasonable offer has been refused may well be of assistance to parties involved in bitter corporate disputes. Unfortunately, it is often the case that parties to such disputes are not truly seeking the remedies claimed as part of unfair prejudice proceeding, but rather are using the cost and difficulty of the proceedings to pressure their counterparty into wider and more significant concessions. This decision may provide an additional shield in such cases. The court declined to comment on whether the principle applied to other types of proceedings. Given the unusual nature of unfair prejudice proceedings where the court is tasked with finding a solution which creates a fair outcome, it is unlikely to have broader implications. However, the court has left the door open to it being applied in other forms of dispute which do not have a black and white outcome. Angus Wood arw@bto.co.uk / 0141 483 9609
Cladding in Commercial Buildings Mark McEvinney asks where the UK’s commercial building stock stands following details of the Government’s new five-point plan in the wake of the Grenfell Tower tragedy.
The UK government has pledged £5bn to deal with the removal and replacement of aluminium composite materials (ACMs) in the housing stock in England with a new five-point plan in the wake of the Grenfell Tower tragedy. The five-point plan includes pledges: 1. The Government will pay for the removal of unsafe cladding for leaseholders in all residential buildings 18 metres and over (6 storeys) in England. 2. A generous finance scheme to provide reassurance for leaseholders in buildings between 11 and 18 metres (4 to 6 storeys), ensuring that they never pay more than £50 a month for cladding removal. 3. An industry levy and tax to ensure developers play their part. 4. A world-class new safety regime to ensure a tragedy like Grenfell never happens again. 5. To provide confidence to this part of the housing market including lenders and surveyors. Moreover, a New Homes Quality Board has been convened to put in place the New Homes Ombudsman Service, designed to protect the rights of consumers in construction standards in the building of new houses. However, the Ombudsman will not have retrospective powers that will enable it to deal with existing issues surrounding ACMs in the UK housing stock. Indeed, for that reason it is obvious that the New Homes Ombudsman Service, once it is eventually up and running, will be largely ineffective in dealing with the gargantuan problem of identifying and removing ACMs already present in the UK housing stock.
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Question marks remain over the effectiveness of the dispersal of funds from the UK government to deal with the existing issue and little has as yet been forthcoming from the Scottish Government as to whether or not the Barnett consequentials will be similarly employed north of the border. Notwithstanding the welcome news on beginning to deal with the housing stock issue, little or nothing has as yet been said about the extent of the issue in the country’s commercial building stock. Let’s face facts; business has been let down in much the same way as freehold and leasehold flat owners in England, but it seems thus far that industry and commerce will have to bear this burden alone and the knock on effect on the commercial and investment property markets could be profound and felt for many years to come both in property values and yields. Businesses surely face more than sufficient challenge in the wake of the pandemic and how we can exit from that whilst minimising the adverse effect that it will inevitably have on our economy. The last thing businesses need is to be abandoned by their respective governments to hold the ticking time bomb of ACMs in the commercial sector. Having spent circa £37bn on a test and trace capability that has delivered little or nothing insofar as one can tell, it is high time both the UK and Scottish governments took a more holistic approach to the ACM issue and tackled the impact ACMs will inevitably have on the commercial sector. The same problem must surely have the same solution. Mark McEvinney mme@bto.co.uk / 0141 225 5275
Opt-Out Organ Donation Ross Brown discusses opt-out organ donation and how the new legislation regarding organ donation affects your succession planning.
You may have seen recent news reports (or received a flyer through your door!) about changes in Scotland’s law regarding organ donation. From 26 March 2021, new legislation comes into force which means that all Scottish residents who are over 16, have lived in Scotland for 12 months prior to their death and are deemed to have mental capacity, will be opted-in to organ donation automatically.
Of course, for loved ones this may be an incredibly difficult decision to make, particularly if they do not know what you would have chosen. Even where they may be confident of their own personal choice, the topic remains a highly sensitive issue and one which many may not feel comfortable making on someone’s behalf. This is likely to compound the upset and distress which grieving loved ones already experience.
This is a welcome change in the law for many and is designed to save lives. It does so by relieving some of the pressure on the NHS caused by very limited numbers of viable organs available for transplant. This is enacted on the belief that many Scots would be willing to be organ donors, but do not take the necessary steps to arrange this.
Opt-out organ donation
However, there are various cultural, religious or otherwise personal reasons why you may wish not to have your organs made available for transplant after your death. In these situations, it is vital to make sure that your wishes are clear and respected. Presumed consent for organ donation Under the new legislation, the presumption of consent only applies where you have not previously opted-out. In this situation, the donation itself will not be automatic and the medical team will instead seek the guidance of your next of kin or Attorney to determine whether you would have wanted your organs donated. 3
As part of your succession planning, you should consider whether you want to be an organ donor. To opt-out, you can do so online directly with the NHS. Alternatively, you can record your wishes in a written Letter of Wishes which will assist your Attorney, medical team and loved ones in being certain of your decision and understanding your reasoning. If you would like to know more about how this legislation affects your succession planning or to speak to a member of our team about recording your chosen organ donor status, please contact the BTO Personal team. Ross Brown rbr@bto.co.uk / 0141 225 4832 www.btopersonal.co.uk
WEBINAR: Protecting Your Brand Online Thursday 25 March 2021, 13:30 - 14:30 including Q&A There is no doubt that the growth of online shopping and trading has been accelerated by the Covid pandemic, with even the most traditional retailers and businesses conducting significantly more business online. With online competition becoming fiercer, the importance of protecting your business online cannot be underestimated... In this free webinar, BTO’s Lynn Richmond and Mary Kernohan of SnapDragon Monitoring Ltd, will look at some of the challenges and opportunities presented by the online market including:
protection of trade marks, websites and domain names online reputation management preventing competitors from taking advantage of your assets and goodwill how to deal with counterfeit goods proactive steps to protect your business
Lynn Richmond, Accredited Specialist in IP: lyr@bto.co.uk / 0131 222 2939 Mary Kernohan: mary.kernohan@snapdragon-ip.com / 0131 466 9249
Registration: CLICK HERE + SEND E: events@bto.co.uk / T: 0141 221 8012
You will receive a reminder email confirming the joining instructions prior to the webinar, which will be hosted via Microsoft Teams.
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BTO NEWS
New Commercial Litigation Partner We are delighted that new partner Angus Wood has joined fast-growing Commercial Dispute Resolution practice. Angus has 12 years of litigation experience, acting in a wide variety of disputes, including corporate, banking and energy. He has particular expertise in property and insolvency disputes. Angus is based in our Glasgow office, working closely with BTO’s Head of Commercial Dispute Resolution, Grant Hunter. Angus Wood arw@bto.co.uk / 0141 483 9609
New Head of Wills, Estates and Succession Planning in Edinburgh A recognised expert in private client law, Gregor brings over thirty years of experience of advising individuals. He specialises in lifetime asset protection, Powers of Attorney and Living Wills. Gregor is also particularly well known for providing a personalised service to entrepreneur, landowner and business clients, dealing with succession disputes and providing guidance in relation to tax and asset planning matters. Gregor Mitchell gmi@bto.co.uk / 0131 222 3233
BTO Celebrates Third Accredited Specialist in Employment Law Laura Salmond has been accredited by The Law Society of Scotland as an employment law specialist, joining her partners Caroline Carr and Jacqueline McCluskey, who also hold this accreditation. Laura commented: “I wanted to attain accredited specialist status for my clients. I am very pleased that they will have this assurance that they are receiving first class, pragmatic, commercially sound advice at all times and particularly in more complex cases.” Laura Salmond lis@bto.co.uk / 0141 225 5315
New Family Law Mediator Solicitor Advocate Debbie Reekie, an accredited specialist in family law and trained collaborative lawyer, has been successful in gaining her accreditation as a family law mediator. Debbie advises in relation to the full spectrum of family law matters including separation, divorce and financial provision. She has experience in dealing with complex and high value assets, as well as cases with an international element and cases involving children. Debbie Reekie der@bto.co.uk / 0131 222 2948
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