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Can Partners in Professional Partnerships claim Employment Status?

July 31st, 2012 Comments off

Madeleine Thomson, Hamlins LLP

For businesses operating as a partnership, promotion and ownership of the business can be controlled by means of operating different levels of partnership, for example a salaried partner, fixed term partner or equity partner.

Whereas salaried partners are sometimes regarded as glorified employees and will normally enjoy full employment rights, “fixed share” are a different breed as normally they will only contribute a relatively small share of the capital, and as a result be excluded from much of the decision making within the business and have limited voting rights. In terms of their actual stake and control of the business, there may in fact be little to distinguish between them and their salaried partner colleagues, but it now appears, in law, that salaried partners are much better protected when the business decides to end the partner’s tenure.

The Court of Appeal case of Tiffin v Lester Aldridge LLP, reported this month, has provided clarification that a fixed share partner, even one with very limited capital contribution and voting rights, does not have employee status and therefore is not entitled to seek unfair dismissal compensation if they are levered out of the business against their will.

Mr Tiffin started with Lester Aldridge, a firm of solicitors, as an employee in 2001.  In 2005 he was promoted to “salaried partner” and retained the status of employee. He was promoted again in 2006 to a “fixed share partner” and instead of salary, received monthly drawings based on a fixed share of the profits.  He was obliged to make a £5,000 capital contribution to the partnership. He received five profit share points, the value to be assessed once the profits were known for the financial year.  He became responsible for dealing with his own income tax and his national insurance contribution class changed to 2 and 4. In 2007, the firm converted to an LLP and Mr Tiffin entered into a members’ agreement where, as a fixed share partner, he was described as a “member”, whereas salaried partners were referred to, in the members’ agreement, as “employees”. His voting rights were limited and the agreement provided that if the firm was wound up, he would receive less than 25 times the value than a full equity partner.  His capital contribution increased by £1,250.

The partnership decided to terminate his membership of the LLP with effect from February 2009.  Mr Tiffin issued an unfair dismissal claim and other related claims in the employment tribunal. His employment status was disputed and he failed to persuade the employment tribunal he was an employee, in order to pursue his employment claims.

Because the partnership was an LLP Section 4(4) of the Limited Liability Partnerships Act 2000 also applied, which states that LLP members can enjoy employment status in certain circumstances but a member shall not be deemed as employed “unless, if he and the other members were partners in a partnership, he would be regarded for that purpose as employed by the partnership”.  This means that the same principles apply to determine whether a member of an LLP is an employee as apply to establish whether a partner in a partnership is an employee.

Though salaried partners in the Lester Aldridge business made no capital contribution, enjoyed no share of the profits or share in surplus assets in a winding up and no say in the management of the firm, the fixed share partners enjoyed all of these things, though to a far lesser degree than the full equity partners. Therefore the features of the fixed share partners bore a much closer resemblance to the equity partners than their salaried partner colleagues.  The Court of Appeal considered that the intention of the parties in signing up to the members’ agreement was to establish a relationship of partnership and not employment.

Mr Tiffin argued that he had no real say in the management of the firm.  However, the court reviewed the fact that he had been entitled to speak at partners’ meetings and he had voted on 22 of 52 proposed resolutions.  He had a vote when it came to opening or closing an office, merging or acquiring another business, selling part of the business, admission of new partners and amending the members’ agreement.

Although Mr Tiffin sought to argue in favour of being an employee, (that he did not have a prospect of a real share in the profits of the business), the Court of Appeal found that because he did draw a share of the profits, albeit less than the equity partners, in addition to the fact that in a winding up situation he would be entitled to a share of surplus assets and he had contributed capital to the business. This established him as a partner and not an employee.

The law does not provide for any minimum levels of capital contribution, profit sharing, voting rights to distinguish as between partners who can be employees and those who cannot.

Equity partners may, as a result of this decision, consider that they are best protected by having all their junior partners as fixed share partners, and moving away completely from the salaried partner grade.  With a relatively minimal capital contribution and the granting of limited voting rights with fixed profit share as opposed to salary, it appears that the business may escape the employment relationship and the risk of unfair dismissal and employment related claims if the relationship goes sour.

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Modern heating tools ‘are notably efficient’

July 31st, 2012 Comments off

There are a number of subsidies and grants available for people who wish to purchase energy-efficient devices, interior designer and TV presenter Julia Kendell said.

She suggested that people check their central heating systems to see whether these ought to be upgraded.

“I wouldn’t want to be too specific about what heating system if going to work for what property, but there are lots out there and they’re all pretty efficient these days,” the expert added.

Some of the variables the specialist outlined include the size of the house, how often people are inside the building and the type of insulation it has.

Furthermore, newer technologies such as photovoltaic cells may be a useful purchase for eco-conscious homeowners, she stated.

In the long-term, people can make money through these devices through the Feed-in-Tariff scheme, Ms Kendell noted.

Recently, regulations relating to these charges were introduced by the Department of Energy and Climate Change, with these requirements set to put the policy on a more sustainable, certain and predictable footing.

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Orange ‘a trendy colour’ in 2012 interiors

July 30th, 2012 Comments off

Orange is now a key colour in home decor this year.

Vibrant tones of the colour were seen “kicking off the year with a bang”, GA Interiors and Shellshock Designs interior designer Gwendoline Alderton stated.

For example, ‘tangerine tango’ was named as the colour of the year 2012 by Pantone, which described it as a “vivacious and appealing reddish orange”.

Ms Alderton claimed vibrant orange is an “energising and happy” colour, although she admitted some people might find it “too strong”.

These individuals could whet their appetite with peach and dusky pink, which were described by the specialist as colours to fit summer 2012.

Other colours highlighted by the interior design expert include taupe, chocolate and caramel.

While some people paint their walls with magnolia, Ms Alderton argued this can look grey in English weather.

She recommended that people select colours that remind them of “soft clotted cream”.

“Summer 2012 is a time to brighten and sparkle your home,” the designer added.

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Housing boost plans under government scrutiny

July 26th, 2012 Comments off

Ministers are studying plans to boost housebuilding by lending publicly owned land to developers and relaxing requirements for building schemes to include social housing.

The recommendations are expected to be made in a report by Sir Adrian Montague, the businessman who has acted as an adviser to successive governments. Montague was asked to study how to tackle the chronic housing shortage, especially in the private rental sector, and the urgent need to revive the construction sector and boost employment.

Under the changes, the government and local authorities would “invest” land they own with private developers or housing associations, which say they can raise money to build homes but cannot afford to buy land as well.

The state would be repaid when the completed developments were sold to institutions such as pension funds, which have indicated they want steady income from rents but cannot take the risk of development or wait for their pay-back during the building phase.

To further encourage developers, councils could be urged to relax requirements for developers to build social as well as private housing; in return, they would have to agree that the rented homes could not be sold privately for a minimum period.

The report, commissioned in February and expected to be published within weeks, may also call on the government to provide seed funding and set up a task-force to get early projects off the ground.

The British Property Federation, representing developers, has likened this potential revolution in private rental developments to the boom in privately owned student accommodation blocks, which has gone from nothing to a £20bn industry in two decades.

“If the review could unleash a couple of billion a year to help build homes … that would make a useful contribution to housing supply and those needing to rent,” said Liz Peace, the federation’s chief executive.

Some experts believe total spending could reach £40bn in a decade if the UK matches the levels of institutional investment in this sector of other parts of western Europe and the US.

A spokesman for the Department for Communities and Local Government, which oversees housing, said: “The private rented sector plays an essential role in the housing market, offering flexibility and choice to people, and supporting economic growth and access to jobs. To boost supply and choice, we want to encourage greater institutional investment into the sector, and in due course we will be publishing our response to the Montague review.”

Montague is non-executive chairman of companies including 3i, Michael Page International and Anglian Water Group. He is also deputy chair of the UK Green Investment Bank.

When his review was launched last year he said he wanted to “help remove barriers to investment, contributing to the continuing health of a sector that millions of people rely on”.

The Montague report will follow two reports this week into boosting private rented housing, and a third from Labour on reducing rents and improving standards in the sector.

The Resolution Foundation, a thinktank supporting low- to middle-income households, makes similar recommendations to those thought to be favoured by Montague, but prefers a bigger role for housing associations to build private rented homes, in order to avoid a conflict with the continuing need for social housing.

“There are 11 million people in the low- to middle-income group: for a lot of those people ownership isn’t on the cards for the medium term,” said Vidhya Alakeson of the foundation. “This is an opportunity to create a different product that’s better quality because it’s professionally managed, [and] offers a longer-term home for people raising children in the rented sector.”

The Investment Property Forum has reported that if the government cut VAT on repairs and management fees and reduced demands for social housing, institutional property investors could invest £2.6bn-£2.7bn in three years, “which, with careful nurture by government, can deliver significant new stock”.

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Osborne will guarantee loans to start developers building again

July 25th, 2012 Comments off

George Osborne will announce on Wednesday new a package of measures to get Britain building major infrastructure projects which he claims could lead to £50bn of spending in the economy.

New loan guarantees and lending for big building projects follow months of criticism from across the political spectrum and from the private sector that the government has not been doing enough to generate jobs and growth.

It follows two other significant announcements in the past few days: afunding-for-lending scheme to get banks to make more loans; and support for £9bn of investment in railway infrastructure.

In addition, work is continuing on more investment in housing and road building, prompting one business representative to suggest there had been “a change in gear” from the coalition.

Treasury officials said on Tuesday night that there had been no move to adopt a Plan B for the economy as urged by some critics. They said there would be no rise in public spending, and no impact on public borrowing, because the loan guarantees would not be expected to be called on.

However a government source admitted this week’s series of announcements had been tightly scheduled to create a “big splash”.

The chancellor will announce three separate schemes, the biggest of which will be UK Guarantees, under which the government will secure debts taken on to build “nationally significant” schemes which are not being built because developers cannot raise money at an affordable interest rate, if at all. In a sign of the urgency ministers feel about the need for more spending in the economy, applications will open on Wednesday. Borrowers must pledge to start building within a year.

This measure alone could generate investment of £40bn in sectors such as energy and transport, Osborne will say. The Treasury is not likely to name any single project, but schemes which could qualify include theThames Tideway (a massive sewage tunnel 15 miles long and the width of three London buses).

The government is also planning a temporary lending programme, where developers can borrow money directly from government departments to enable partly-funded projects such as housing, hospitals or new schools to go ahead, and loan guarantees for British exporters.

The government claims its ability to borrow at interest rates under 2%, much lower than commercial lending, or many other national governments, will allow it to launch the schemes.

Osborne said: “The credibility the government has earned through tackling the deficit is already helping millions of British families and businesses through keeping down the cost of borrowing.

“Now UK Guarantees will use that hard-won fiscal credibility to provide public guarantees of up to £50bn of private investment in infrastructure and exports.

“Britain’s credibility has been hard-won and involved difficult decisions, so I want to make sure its benefits are passed on to the whole economy.”

The announcements are likely to be welcomed but critics will continue to press for even more government support to “unlock” what the Confederation of British Industry, the biggest employers group, estimates could be £250bn of private and public investment – five times the size of what is announced on Wednesday.

“Investment and exports will be the dual drivers of future growth in the UK and this scheme should help fire up both engines,” said John Cridland, the CBI director general.

“While the government’s proposals address infrastructure financing, we now need to focus on project models to ensure delivery of the world-class infrastructure this country needs.”

Some of the recent government initiatives were flagged up by the chancellor in last month’s Mansion House speech to the City, when he promised a £100bn support programme for the British economy.

But critics have been concerned that until recently none of the promises have been accompanied by the detailed policymaking needed for them to happen.

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Through The Door Promotions launches into the next generation

July 24th, 2012 Comments off

Through the Door Promotions today announced that the Shoreditch based consumer and lifestyle PR company have won their first award having only been in business for nine months. Through The Door Promotions was honoured with the Next Generation Award at the HP Smart Business Awards.

The Next Generation Award recognises and celebrates successful business owners’ aged 25 or below who have driven innovation forward against the odds in such a turbulent economy.

Through The Door Promotions was carefully selected by a panel of judges with expertise in SME’s, enterprises, marketing and technology. Through The Door Promotions strong work ethics, impressive client base and diverse attitude to PR and marketing stood out amongst other competitors.

Georgia Knight, founder of Through the Door Promotions says of this achievement; “with many people sceptical and biased towards PR and marketing, and with the stereotypical perspective that has been adopted in many business circles, Through the Door Promotions was set up to alter this opinion. As a young individual, I created Through the Door Promotions to offer young creative thinkers and young professionals a platform to launch their ideas whilst improving our clients businesses. From these creative minds, Through the Door Promotions is hoping to change the face of the PR and marketing industry and make it fun once again. ”

Launched as a new programme for 2012, the annual awards will celebrate the best achievements of the UK’s small and medium sized businesses. The business awards were developed to shine the spotlight on some of the country’s most dynamic and hardworking businesses, whatever sector they may be in.

Hayley Smith, Account Director of Through the Door Promotions says of the honour; “everyone at Through The Door Promotions is extremely proud and winning this award is a great achievement for the company. It is a very exciting time for us at the moment and it has just got even more so.”

Through the Door Promotions continuously create personalised and highly innovative campaigns that are repeatedly successful, placing our company at the forefront of the industry and the HP Smart Business Next Generation Award confirms our achievements.

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Primark proposes £40m Milton Keynes development

July 23rd, 2012 Comments off

Primark has confirmed it wishes to develop a £40 million retail space at the new thecentre:mk Milton Keynes shopping centre.

This would involve the creation of a 17,500 sq ft property and the enhancement of the nearby market site and would require the removal of Secklow Gate Bridge’s southern section.

A public exhibition on these plans will occur today (July 20th) and tomorrow in Middleton Hall between 10:00 and 18:00 BST.

Within thecentre:mk, there are currently 240 stores, cafes and restaurants, with approximately 27 million visitors attending the building every year.

Anchor stores within the development include Boots, BHS, HMV, Next, the House of Fraser, John Lewis and Marks & Spencer.

“Milton Keynes provides an ideal location for Primark as it meets our requirements for store locations and is already a popular destination for our target customer,” a spokesperson for the clothing retailer said.

The representative added that Primark is looking forward to opening its new thecentre:mk store.

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iTrent introduces a more collaborative approach to HR and Payroll at Henry Boot

July 18th, 2012 Comments off

Nottingham, UK, 18th July 2012 – Henry Boot Plc, one of the leading property and construction organisations in the UK, has chosen iTrent, the integrated workforce and talent management solution from MidlandHR, to meet all of its future HR and payroll requirements.

The company has implemented a broad range of iTrent modules, including core HR and Payroll, People Development and Absence Management, as well as Employee and Manager Self-Service.

Rachel White, Group HR Manager, comments: “When we decided to review our HR and payroll requirements, it was extremely important that we found a fully integrated solution that would prevent duplication between our HR and payroll departments, which are housed on different sites. This would ensure information remained up-to-date and accurate across the organisation for all of our 500 employees.

“It was also essential that we found a provider who would be willing to meet our individual requirements. For example, we needed a solution that could integrate with BusinessObjects to provide us with high level business intelligence and cost reporting specific to the construction industry. MidlandHR has proved to be a true partner, working closely with our in-house teams to ensure that all these specific needs were met.”

One of the key areas in which MidlandHR has helped to transform Henry Boot’s HR and payroll processes has been through the introduction of iTrent Employee and Manager Self-Service. Individuals now have much more responsibility for their own data, freeing up the HR and payroll department’s time from administrative duties, allowing them to take a more strategic approach and concentrate on core issues. Manager Self-Service has also given Henry Boot’s management team greater access to key information such as holiday requests and absence records, all in real time.

White explains: “Whilst iTrent impressed us with its overall functionality, it was its web self-service facilities which were of particular interest. Since its introduction, we have been able to rationalise the requirement for paper contracts and have seen a real reduction of our paper-based processes, including payslip production.

“iTrent has introduced a much more collaborative approach to the way we work, streamlining our processes and reducing duplication and errors. This has certainly created greater efficiencies and improved the visibility and accuracy of HR information.”

Declan McGrath, managing director of MidlandHR, concludes: “Henry Boot is a fantastic example of how iTrent can help organisations to transform every day working practices for management and employees alike. We are currently in the process of working closely with the payroll team at Henry Boot to ensure they become RTI-compliant in plenty of time for the deadline of April 2013.  As an RTI pilot customer, we are helping them to meet the HMRC’s requirements for data capture and quality, and take a best practice approach to the necessary changes in operation of PAYE.”

 

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Fire-damaged community swimming pool to reopen

July 18th, 2012 1 comment

Kier has helped the local authority to reopen Lime Kiln Leisure Centre’s swimming pool.

This had been closed since December 2010 following a fire, although all of the other facilities in the building have remained open.

The blaze started near the sauna but spread to the roof and caused extensive damage to the structure.

Wiltshire Council approached the construction firm as it already has a maintenance contract with it and Kier used its Small Works project team to deal with the council’s tight time restrictions.

Work commenced in June and is already nearing completion, with electrical and mechanical appliances being refitted, pool plant being reinstated and the conclusion of associated projects underway.

“Kier’s performance on this project has been outstanding, particularly in reference to the extremely short timescales and the complexity of the project,” the local authority’s project director Darren Tape said.

He added: “The contracts manager, foremen and operatives have worked extremely diligently.”

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Ucatt criticises high death volumes in construction

July 16th, 2012 Comments off

Although the number of workers in the construction sector who died in the 2011 to 2012 financial year is lower than that seen in the previous 12 months, the figure is still too high.

This is according to the Union of Construction, Allied Trades and Technicians (Ucatt), which highlighted provisional figures from the Health and Safety Executive (HSE) that found 49 employees in building firms suffered a fatal accident in the workplace during the last fiscal year, compared with 2010 to 2011’s figure of 50.

Overall, 173 people in the UK were fatally injured while working, which corresponds to a rate of 0.6 deaths for every 100,000 employees.

However, among directly-employed construction personnel, this proportion hits two in every 100,000 people, jumping to 2.4 per 100,000 among self-employed individuals in the industry.

Ucatt pointed out the number of people employed in the sector fell by 71,000 in the last year.

“Deaths remain far too high, especially given the declining number of people working in the industry,” general secretary of the organisation Steve Murphy declared.

“As the construction industry recovers, deaths are likely to increase substantially,” he predicted.

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