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April 30, 2018

APRIL'S NEWSLETTER

Corporate news

Greenaway Scott Corporate Finance Workshop

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Greenaway Scott is a progressive and niche corporate commercial practice which prides itself on being proactive - driving transactions towards a timely and successful conclusion. The corporate division at Greenaway Scott are experienced business lawyers and undertake all client corporate finance transactional work and projects.


The team advise on a full range of corporate transactional projects including mergers and acquisitions, management buy-ins and buy-outs, private equity investments, deal negotiations, restructuring, de-mergers, public to private takeovers, AIM and LSE advisory and administration, schemes of arrangement and shareholder agreements.

Join Leanne Thomas and Elle McCook from our corporate team on Thursday 7th June for a corporate workshop where they will give you an insight into the following areas of corporate law:
  • Investments and investment agreements – what to expect
  • What to expect when selling your business - from finding a potential buyer to closing the deal
  • The pitfalls of a shareholders agreement
  • Acquiring a business – how to structure the deal and the due diligence process

Book your free tickets for the event here: 
https://www.eventbrite.co.uk/e/corporate-workshop-tickets-45129081297


Venue: The Maltings, East Tyndall Street, Cardiff, CF24 5EZ

Order of the day: 
9.00am - 9.30am - Networking and Breakfast
9.30am - 11.30am - Corporate Workshop

Corporate Team

Commercial news
Late payments of commercial debts: new regulations
Late Payments

The Late Payment Act created a statutory framework for dealing with late payments in commercial transactions. This was done by giving suppliers a right to at least 8% interest a year on overdue payments for goods and services plus a fixed sum and reasonable costs of recovering the debts. Where standard terms attempt to vary this right, a representative body can obtain an injunction to prevent the term being used.

As a standard, parties can only agree to a payment term longer than 60 days if it is in writing and is not grossly unfair. Grossly unfair is interpreted as being anything that is a gross deviation from commercial practice and is contrary to good faith and fair dealing. Also taking into account the goods and services in question and whether the buyer had any objective reason to deviate from the standard 60 day payment term.

The new regulations introduce a provision which allows representative bodies to challenge the use of grossly unfair contractual terms and practices in contracts to which the regulations apply. The aim is to make it easier for representative bodies to challenge the unfair terms and practices relating to payment terms or interests on behalf of businesses.

The regulations are designed to prevent late payments in commercial transactions, by imposing a rate of at least 8% per annum on overdue payments for goods and services.

The new regulations allow businesses to approach representative bodies for assistance and such bodies will have the flexibility to decide whether or not to take the case forward. Representatives of all business can challenge the payment terms, not just small or medium-sized businesses. The challenge can also be made on behalf of an individual business or a group of businesses. However, the new regulations are intended to expand the ability of the representative bodies to challenge contracts on behalf of small or medium-sized businesses, to address the power imbalance between the small or medium-sized businesses and larger companies when entering into contracts.


If you would like advice on your requirements under the GDPR please contact the Commercial team by emailing commercial@greenawayscott.com

Employment news
The risks of not paying National Minimum Wage

Minimum wage

What is National Minimum Wage?
Most workers working or ordinarily working in the UK who are over the school leaving age will be entitled to be paid National Minimum Wage (NMW). The school leaving age in UK is the last Friday in June when an individual is 16 years old.


The national limits are legally binding and increased in April 2018. The current limits are as set out below:

  • 21 to 24 year olds from £7.05 to £7.38;
  • 18 to 20 year olds from £5.60 to £5.90;
  • 16 and 17 year olds from £4.05 to £4.20; and
  • apprentices from £3.50 to £3.70.

The payments that make up the NMW include the following:

  • Basic salary (the gross amount).
  • Bonus, commission and other incentive payments based on performance (but not any premium paid for overtime or shift work.
  • Piecework payments.
  • Accommodation allowance.

Dividends are not countered towards NMW.

Reference period
The hourly pay is calculated in accordance with the reference period which corresponds with the intervals the worker is paid. Workers paid daily have a reference period of one day, workers paid weekly will have a reference period of one week and workers paid monthly will have a reference period of one month. The reference period cannot exceed a month.

For NMW purposes, the pay allocated to a pay reference period is any pay either received during that period or earned in that period but not received until the next pay reference period.

Consequences of underpayment
If an employee issues a claim against a business for underpayment and this is referred to HMRC, it could trigger a notice of underpayment. This will be issued in all cases where it is found that arrears of the NMW were outstanding at the start of the investigation. 

As of 1 April 2016, the penalty under a notice of underpayment was capped at 200% of the total underpayment with an overall maximum penalty of £20,000 per underpaid worker.

In the case of Best Connection Group Limited, the HMRC investigated the business and issued 13 notices of underpayment as a result of workers not receiving NMW. This amounted to £63,731 exclusive of the sums owed to the workers. 

If the employer does not comply with the notice of underpayment, the enforcement officer can issue civil proceedings in the civil courts or employment tribunal to recover the sums owed to workers on their behalf; or prosecute the employer.

 

It is a criminal offence to refuse or wilfully neglect to pay the NMW and fail to keep the required records. Civil enforcement is likely to be sufficient in the majority of cases. However, where employers are persistently incompliant when paying NMW and refuse to co-operate with compliance officers, criminal investigation may be appropriate and this offence is triable as an indictable as well as summary offence.

The employment team at Greenaway Scott are more than happy to assist with any clarification or further information regarding recruitment. Please contact us at employment@greenawayscott.com

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