Employing Interns
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What Legal Steps Do I Need To Take When Employing Interns?

Legal Advice For Employing Interns.

Steven Eckett, Partner and Head of Employment Law at Meaby&Co Solicitors has produced a five step check list for employers to help protect interns from harassment.

This check list aims to create best practice for employers to ensure interns can work in a safe environment and to give legal protections to employers.

Mr Eckett said: ‘Too often interns (some of whom are for the first time venturing into the workplace) are treated differently to other employees and their employment rights are overlooked or not taken as seriously.

‘This can not only be detrimental to the intern but can place the employer in a vulnerable legal position that can leave them open to potential litigation.

‘A few updates to existing HR policies and some extra induction steps offers both the interns and employers vital protection.

‘It’s really important that firms don’t make the mistake of treating interns like second class citizens when it comes to employment rights.’

Five Steps Employers Should Take When Hiring Interns.

  1. HR should adopt appropriate training specifically for staff members who will be managing or working alongside interns prior to the intern commencing the internship. 
  2. Employers needs to ensure that they have an anti-retaliation policy in place which protects an intern who has reported harassment from being retaliated against from other employees in the organisation. 
  3. Anti-harassment and anti-bullying policies should be accessible to interns from the outset of their internship usually in a staff handbook. It should be clear what actions an intern should take when they experience, see, or find out about harassment. 
  4. HR teams may also consider ensuring there are multiple ways to report harassment by an intern. An intern may wish to report in confidence or bypass specific individuals, especially those who are the cause of the harassment therefore, allowing multiple and flexible ways to report an issue may assist in doing this. It should also be open to an intern to raise a formal grievance. Alternatively, the employer can decide to treat a complaint as a grievance. 
  5. An effective induction programme for interns to allow them to understand how and to whom they should report any harassment related matters should be implemented.

 

The highly respected Human Resources Journal, HR Grapevine, recently interviewed Mr Eckett for his expert legal opinion on hiring interns. The full article can be read here: https://www.hrgrapevine.com/content/article/2020-07-28-how-can-hr-protect-interns

If you have an employment query please do not hesitate to contact us. We can give a free, no-obligation quote and advise you how best we can help you.

Contact us on 0207 7035034 or email us at info@meaby.co.uk.

Click here to view all of our Employment Legal Services.

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Landmark case on employment status in the Beauty Industry

The Employment Tribunal has ruled in a preliminary hearing that a self-employed hairdresser was entitled to claim her notice pay, holiday pay and statutory redundancy pay.  This decision will impact 330,000 people who work in the beauty industry, many of whom are women.

The focus of attention was on a 26-year-old hairdresser – Meghan Gorman who worked at the Terence Paul Salon based in Clitheroe, Lancashire.   She had worked there for six years until it closed last year.

During the hearing it was heard that the salon kept 67% of Ms Gorman’s takings and set her hours of work.  In short, they controlled the work that she undertook in terms of when and how it was undertaken.

Terence Paul who owns five luxury salons in the Manchester area alleged that the company’s ‘self-employed hairdressers’ had control over their hours and the days that they worked, their start and finish times, the treatments that they could give clients and their holidays.

Ms Gorman in her evidence to the employment tribunal said that she had to work from 9am to 6pm Monday to Saturday and that she had no control over what she charged clients.  She also said that she had to conform to the Salon’s dress code, use its products and had to inform the Salon if she wanted time off.

After the hearing Ms Gorman said “ They clearly had the power and control.  I did not believe it could be considered I was in business on my own account…..I had thought for some time that the contract they had in place was not right, saying I was self-employed when they had all those rules in place”.

Thanks to the ruling of Employment Judge Marion Batten, Ms Gorman is now able to pursue her claims for unfair dismissal, wrongful dismissal, sex discrimination, and a failure to provide a written statement of employment, as well as a claim for holiday pay arrears through to a full merits hearing.

Ms Gorman was represented by a non-practising Solicitor Judith Fiddler of Direct Law and Personnel.  She said following the decision that this preliminary judgment could affect thousands of hairdressers nationwide and could influence people in other professions, for example dentists, hygienists, delivery drivers and bookkeepers.  She went on to say, “Her bosses exercised tight control over all aspects of her work, despite her working under a contract termed Independent Contract for Services”.

Although the hearing and decision was confirmed back in March 2020 , the written reasons have only just been released this week.   It remains to be seen whether there is an appeal against the ruling.

If you have any concerns over employment status then contact Steven Eckett – Partner and Head of Employment at Meaby & Co LLP.   seckett@meaby.co.uk or 020 7703 5034

 

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Do I have to pay my employees who have returned from their summer holidays and have to quarantine?

Late on Saturday evening, the Government announced with no warning, that it was closing its air corridor with mainland Spain, the Balearic Islands and the Canary Islands, and that those returning to the UK would need to self-isolate for a period of 14 days.

This follows a recent surge in the number of Coronavirus infections in parts of Spain and is a measured response to the UK Government’s concerns that returning holidaymakers will also trigger an increase in such infections here in the UK.  The devolved nations of the UK are also adopting the same approach.

At the time of writing there are also reports that the UK could close other air corridors for example with France and Germany following an increase in infection rates in these countries.

This is also a concern for employers, many of whom have started to unfurlough their staff and who will have concerns about whether they have to continue to pay these staff for the period that they are in quarantine.

Although the Government has suggested that no employee/worker following quarantine guidance should be penalised, there is no automatic right for such workers to be entitled to their salary in such circumstances, unless there is already in place contractual procedures which ensure that their salary continues.

In the absence of any contractual entitlement, there is nothing in law that would legally entitle an employee to their full pay in the event that they follow Government advice and quarantine themselves for 14 days.

There is also no provision for Statutory Sick Pay either unless the Government decides to legislate for this contingency and many employees will be relying on the goodwill of their employers to financially support them.

Many who are unable to work will face 14 days without pay and employers are at the moment entitled not to have to pay those employees who are self- isolating following their return from Spain.

The only entitlement to statutory sick pay is where an employee cannot work because they are self-isolating because of a test and trace direction or a member of their household has displayed symptoms of COVID-19 which deems them incapacitated.

Work from Home

There are some additional options open to employers who can ask staff to work from home if they are able to do so, and for some it will be a continuation of the status quo from the start of lockdown.

However, there could still be implications for childcare arrangements, which could impact on the ability to work from home.  In these circumstances it is suggested that employers are flexible in agreeing to alter working patterns.

Annual leave

For those employees and workers who cannot work from home then the employer can ask them to take a further period of paid annual leave from this year’s annual leave entitlement to cover the period of quarantine, or alternatively to treat it as authorised but unpaid leave.

The other possibility is to allow the employee to take their annual leave from next year’s allowance.   This could work where there is an excess contractual entitlement to annual leave.  It will not work where the employee only has the minimum number of days that are allowed under the Working Time Regulations.  This is on the basis that the employee must have minimum periods of paid holiday every year on the basis that is it is a health and safety requirement.

Furlough Employees

The other consideration is to furlough employees however  this will only be possible if the employee in question has already been furloughed for at least three continuous weeks by 30 June 2020 or has returned from maternity leave after 10 June 2020.

Even if an employee can be furloughed, then caution still needs to be exercised on the basis that this might be seen by HMRC as an abuse of the Coronavirus Job Retention Scheme where penalties might be incurred.  An employer could consider placing an employee who is required to quarantine on furlough in place of another employee which will minimise the risk of an accusation that there is any abuse of the scheme.

Offer Financial Support

Employers can of course agree to financially support staff who follow Government advice and quarantine, and to pay their full salary or perhaps an agreed reduced sum.   It is however advisable for employers to put any arrangements in writing and to confirm that it is a discretionary payment and that there is no guarantee that if it happens again that the employee will receive any payments of salary.

It is also recommended that employers formulate policies to accommodate these fast changing situations and to make it clear what the company policy is in the event that employees and workers are required to go into quarantine following their return from their summer holidays from a country that no longer benefits from air corridor partnerships.

For more advice contact Steven Eckett – Partner and Head of Employment at Meaby & Co LLP  020 7703 5034 or seckett@meany.co.uk

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Four important changes when commencing residential possession proceedings after the COVID-19 restrictions are lifted.

For many landlords and tenants, the COVID-19 pandemic has presented testing times which has encouraged both parties to adopt a cooperative approach to dealing with common landlord and tenant issues such as rent arrears. As landlords and tenants would be aware, the law has provided a “stay” (or a pause) to  possession proceedings and enforcement proceedings. This “stay” expires on 23 August 2020. Put simply, possession proceedings have ground to a halt to prevent evictions taking place during these difficult times. However, from 23 August 2020, existing and new possession proceedings and enforcement action will be able to take place subject to the following changes:

  1. A landlord who has already started possession proceedings (for example, before the stay on proceedings) will need to provide the tenant with a “reactivation notice” if they wish to continue the proceedings after the expiry of the stay. The “reactivation notice” will essentially inform the court and the tenant in writing of the landlord’s intention to resume proceedings.  If a landlord fails to provide a “reactivation notice” the case will remain dormant. Further information about the form and content of this “reactivation notice” will follow.
  2. Where the claim includes the non-payment of rent, the particulars of claim should set out what knowledge (if any) the landlord has as to the effect of the Coronavirus pandemic on the tenant or their dependants.
  3. The landlord is encouraged to produce a full rent arrears history in advance of the hearing rather than at the hearing.
  4. There will be a suspension on the standard period of time between the issue of a claim form and the hearing which would usually be not more than eight weeks. Therefore, the parties could be waiting a longer period of time for the possession hearing to be scheduled by the court.

These changes will remain in effect until at least 28 March 2021.

If you are either a landlord or tenant and would like assistance in relation to claiming or defending possession proceedings, please do not hesitate to contact Pranav Bhanot (pbhanot@meaby.co.uk) or Aileigh Brough (abrough@meaby.co.uk) at Meaby&Co Solicitors LLP.

 

 

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Blogs

Stamp Duty holiday and buying a shared ownership property

When you first purchase a shared ownership property you have a choice about how you pay stamp duty. You can either make a one-off payment based on the total market value of the property. Or, you can choose to pay stamp duty in stages. That is, you pay what is owed on the initial share you buy, then pay again if you buy more shares.

If you make a one-off payment, then you won’t have to pay further stamp duty if you choose to staircase. This could be beneficial if you think the value of your property will rise substantially before you buy further shares.

If you choose to pay stamp duty in stages when you first purchase a shared ownership home, then you could face a tax bill when you staircase. This depends on how much more of your property you buy. Until you own 80% of the property there is no stamp duty to pay. Once you reach 80% you pay stamp duty on the transaction that took you over 80% and any further transactions.

Choosing to pay the stamp duty in full at the time of purchase is usually a good option if the full property value is below the tax-free allowance of £125,000 or £300,000 for first time buyers. Even where a client says they are unlikely to buy further shares, it is still sensible to ‘pay’ tax based on the full market value where the actual liability is zero as this would mean there is no tax to pay if additional shares are purchased at a later date. However, where the full market value is above the tax-free allowance, as is often the case for properties throughout the South-East, many clients chose to pay in stages rather than pay tax unnecessarily now when they may never purchase additional shares in the future.

The recently announced stamp duty holiday has temporarily increased the tax-free threshold to £500,000 irrespective of whether the purchaser is a first-time buyer. This temporary increase which is in place until 31st March 2021 means that anyone buying a shared ownership property before that date is best advised to elect for stamp duty to be calculated on the basis of the full market value where such value is £500,000 or less. Such an election means there is no tax to pay now or when further shares may be acquired in the future.

If you have any questions regarding residential conveyancing, including shared ownership, please contact Stephen Carr on 01306 884432 or email scarr@meaby.co.uk

 

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What is the Government’s guidance to employers for getting staff back to work?

Many employees, especially those who are office based, have been working from home since the start of lockdown on 20 March 2020, and it has worked well for a number of businesses.

Some employers are starting to call their staff back into the workplace, and others are seriously considering doing so.  The return to work has also been strongly promoted by the Prime Minister Boris Johnson this week as he suggests that it is time for staff to start going back to work.

It is clear that for some businesses, having their staff working from home has been successful, and has not impacted too much on the needs of clients.  However, for many employees, the experience will have been stressful where they have had to juggle childcare and other personal responsibilities, together with a sense of isolation from colleagues and the wider world.

The Government has issued guidance to employers to help them get their businesses back up and running and for workplaces to operate safely.   The Government has also consulted with around 250 stakeholders in preparing its guidance with input from businesses, trade unions, and industry bodies across the four nations of the United Kingdom.   The aim is to provide employees with the confidence that they need to return to work.

We will now take a look at the 5 key points that the Government’s guidance sets out which it is recommended that Employers implement as soon as it is practical for them to do so:-

Key Point 1 – Work from home, if you can

All reasonable steps should be taken by employers to help staff continue to work from home.  For those who are unable to work from home and whose workplace is not closed, then staff should be encouraged to go to work.  Staff should speak to their employer about when their workplace will open.

Key Point 2 – Carry out a COVID-19 risk assessment in consultation with staff and trade unions

This guidance operates within current health and safety, employment and equalities legislation.   If possible, employers should publish the results of their risk assessment on their website and the Government expects all employers with over 50 employees to do so.

Key Point 3 – Maintain 2 metre social distancing, wherever possible.

Employers should re-design workspaces to maintain the 2 metre distance rule between people and stagger start and finish times, create one-way walk-through’s, open more entrances and exits or change seating lay outs in break rooms and kitchen areas.

Key Point 4 – Where people cannot be 2 metres apart, manage transmission risks.

Employers need to consider putting barriers in place in shared spaces, creating workplace shift patterns or fixed teams aimed at minimising the number of people in contact with one another and to ensure that staff are facing away from each other.

Key Point 5 – Reinforcing cleaning processes

Workplaces should be cleaned more frequently, paying close attention to high contact objects like door handles, keyboards, office equipment and surfaces.  Hand washing and hand sanitisers should be available at entry and exit points.   A notice should be on display in the workplace to show employees, and clients and other visitors that they have followed Government guidance.

If you have any concerns about your staff returning to work then contact Steven Eckett, Partner and Head of Employment at Meaby & Co LLP on 020 3053 6506 or  seckett@meaby.co.uk

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HMRC confirms the first Furlough Fraud arrests

A man from Solihull in the West Midlands has been arrested in connection with a suspected £495,000 fraud involving abuse of the Government’s Coronavirus Job Retention Scheme. This is the first action over what is commonly referred to as furlough fraud.

HMRC were put on notice about the possibility of this individual committing furlough fraud and their officers seized computers and other digital devices, with the aid of a search warrant. The funds being held in bank accounts have also been frozen.

The man has been arrested in relation to a suspected multi-million-pound tax fraud and also alleged money laundering offences. An additional 8 men from across the West Midlands have also been arrested as part of a linked investigation involving the deployment of 100 HMRC officers to 11 locations involving their computers and records being seized.

HMRC’s own statistics have revealed that more than £27.4 billion has been claimed by 1.1 million employers on behalf of 9.4 million furloughed staff. HMRC have also disclosed that it has received more than 4,400 reports of suspected furlough fraud up to the end of June 2020, and that they received an initial 800 reports within the first month of the launch of the Coronavirus Job Retention Scheme.

Richard Las, Acting Director of the Fraud Investigation service at HMRC states “The vast majority of employers will have used the Coronavirus Job Retention Scheme responsibly, but we will not hesitate to act on reports of abuse of the scheme……This is tax payer’s money and any claim that proves to be fraudulent limits our ability to support people and deprives public services of essential funding.”

It is recommended by Richard Las, that anyone concerned that their employer might be abusing the scheme should whistle-blow and report it to HMRC online.

HMRC are now be encouraging employers who may have claimed furlough payments fraudulently to come forward and repay the sums. They are giving employers the opportunity to own up through an amnesty. There is also a Finance Bill that is expected to receive Royal Assent later this month that will formally trigger a 90 day period where businesses can notify HMRC that they received furlough scheme payments that they were not entitled to receive or retain and to repay those sums that they were not entitled to receive.

It is clear that HMRC mean business and have the teeth to prosecute those employers who have fraudulently been making claims. It is anticipated that there will be an increasing number of reported cases in the coming months with a lot of opportunity to name and shame those businesses and individuals.

For more information on the Coronavirus Job Retention Scheme please contact Steven Eckett, Partner and Head of Employment on 020 3053 6506 or seckett@meaby.co.uk

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Can I give my main residence away to my children?

This is probably one of the most frequent questions we are asked. The main reasons given are to save inheritance tax or to protect the property against having to pay care home fees.

In general terms if you give away money or assets to your children during your lifetime, then in order for it not to be counted as your asset you need to survive 7 years. So on the face of it, it seems that you could transfer your property to your children, survive 7 years and for most people their most valuable asset is not counted as part of their estate for inheritance tax purposes? Unfortunately not!

What is a gift?
According to HMRC website “- a gift can be:
• anything that has a value, such as money, property, possessions
• a loss in value when something’s transferred, for example if you sell your house to your child for less than it’s worth, the difference in value counts as a gift”

Many of you may have heard of the 7 year rule in which any gift made is discounted from your estate for inheritance tax purposes if you survive by 7 years. This is known as a Potentially Exempt Transfer (PET).

Inheritance tax
The Finance Act 1986 introduced anti-avoidance rules to stop people giving away assets in which they continued to receive a benefit. These gift with reservation of benefit rules means that if you continue to live in the property or give it away with conditions then this will be classed as a gift with reservation of benefit, so unless you pay a market rent to the new owners (i.e. your children) and pay your share of the bills then on your death it will still be counted as your asset for inheritance tax purposes.

If you have a second home that you do not live in but pay rent out to receive an income, then you could transfer that property to your children. If you do so, then you cannot continue to receive the income as again that would be seen as reserving a benefit. You could decide that you only need half the rental income and transfer half the property to your children. You could then receive half the income from this second property and this would be a successful PET, provided you survived 7 years. Please note however that whenever you make a disposal of a property that is not your main residence, there may be a capital gains tax charge between the value of the property when you bought it and the value at the date you made the gift (the disposal).

A gift of a property which does not qualify as a potentially exempt transfer could be subject to this lifetime charge of inheritance tax at 20%

Care Home fees
If you give away your home or any assets with a view to avoiding them being taken into account for care home fees funding, then this could be seen as a deliberate deprivation of assets. The local authority may view those assets still belonging to you and this will have an affect on the financial assessment they carry out. Local Authorities also have powers of recovery so that if you gave away your property to your child and then the local authority has to fund your care, they can seek to recover those care costs from the children who received the property.

Timing is a key issue in relation to these gifts. If you transferred the property many years ago before you could reasonably expect that you would need care and support, then it unlikely to be seen as a deliberate deprivation of assets. However please note there is no time limit as to how far the Local Authority can go back.

Other risks
Once you give something away, you no longer have a say what happens to it. Your children can then decide to sell the property, charge you rent or take out mortgages on the property. It could also be at risk of your children were to die, divorce or become bankrupt.

Some examples
Example 1 – Adult child lives at home with their mum. The property is valued at £300,000. It is likely that the child will continue to live there long term. It may be sensible for mum to give away one half share of the property to that child. Mum and child share the bills. Mum survives 7 years. The gift of the half share is effective so that only mum’s half of the property is counted for inheritance tax purposes.

Example 2 -Mum and Dad give away their property to their children in 2010. They continue to live in the property until 2014 and then move out. Between 2010 and 2014 the property is a gift with reservation of benefit. Once the parents move out the clock on the PET starts to run, so as long as they survive to 2021 it will not be counted as part of their estate.

Example 3 – Dad gives him property away to son who does not live with him. Dad continues to live in the property and then dies 10 years after making the gift. Dad is still considered to own the home for inheritance tax purposes.

Example 4 – Mum decides to transfer property to her children as she wants to ensure they receive their inheritance in case she has to go into a care home in the future. Mum is in good health. 15 years later she has a severe stroke and needs to go into a care home. The transfer of the property was made for the purpose of avoiding care home fees in the future. The Local Authority will treat mum and still owning the property and this will affect the financial assessment and they may refuse to pay for care. If they do pay for care, they can recover the costs of that care from the children.

If you would like any further advice or guidance on the issues raised above then please do not hesitate to contact Esther Janalli-Brown on 01306 884432 or email ejbrown@meaby.co.uk for more information.

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Lawyer For Second Home
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Second Home Buyers’ Boost

If you have any conveyancing queries relating to buying a second home please do not hesitate to contact us for a free, no-obligation chat on 0207 703 5034  or fill out our contact form and we will come back to you.  We are happy to answer your questions and advise how we may be able to help.

Our Head Of Property, Partner Chris Sarsfield, was quoted in the Sunday Times newspaper on the subject of how the Stamp Duty holiday would affect second home buyers. 

Chancellor Rishi Sunak’s decision to raise the Stamp Duty threshold to £500,000 until the end of March 2021 has proved to be an unexpected boost for second home buyers.

Although second home buyers will still be charged a 3 per cent surcharge on the total cost of their property it still creates significant savings.

For example, someone buying a second home for £500,000 during the Stamp Duty holiday will now pay £15,000 rather than £30,000.

Mr Sarsfield helped the Sunday Times produce an article explaining how the new working from home mentality caused by lockdown combined with the Stamp Duty holiday was creating large demands for second homes.

He commented: ‘Once working-from-home patterns had been established and it became apparent that this new flexible way of working was going to continue after lockdown finishes there was a  significant upsurge in people wanting properties outside of London, and particularly by the coast.

‘This second home trend is inevitably going to be turbo-charged by the chancellor’s stamp duty holiday. Until recently we’d seen a large drop in purchases of second homes after the stamp duty surcharge was introduced but I think people will take real advantage of this window. Suddenly someone buying a second home for £500,000 is having to pay £15,000 rather than £30,000 in stamp duty which is clearly a significant saving.

‘People have realised that they can work from home by the sea and perhaps only have to commute into London once a week. It suddenly doesn’t matter that a second home is a couple of hours from the office. It means they can get proper use of the home, particularly in the holidays when the children aren’t at school.

‘The stamp duty holiday has also been a real boost for those wanting to purchase holiday lets because it makes it more affordable and more likely that the numbers will add up to allow them to afford a buy-to-let mortgage.’

If you have any queries relating to conveyancing around second homes please do not hesitate to contact us for a free, no-obligation chat on 0207 703 5034  or fill out our contact form and we will come back to you.  

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A Legal Guide For Weddings Restricted By Coronavirus.

If you have any queries relating to weddings taking place under Covid-19 restrictions or any other events please do not hesitate to contact us for a free, no-obligation chat on 0207 703 5034  or fill out our contact form and we will come back to you.  We are happy to answer your questions and advise how we may be able to help.

Our expert legal advice is featured in financial guru Martin Lewis’s MoneySavingExpert website. Click here to read the full article

 

If your wedding can go ahead under the new rules, but will be drastically scaled down (ie, 30 at the wedding, six people at reception), is it fair that people pay the same price? 

  • The starting point when considering whether it is fair for a supplier to charge the same price when a wedding has been drastically scaled down, is to consider what service was being provided by the supplier.
  • Where the cost of the service is contingent on the number of people attending the wedding or reception, for example wedding caterers, decoration companies or drinks/bar services, it is likely to be unfair for the supplier to charge the same price when fewer guests will be in attendance. After all this would constitute an unfair windfall for the benefit of the supplier and to the detriment of the consumer.  Further, it is unlikely that a supplier will legitimately be able to justify the increased costs when the service they are offering has been scaled back.
  • The Consumer Rights Act 2015 aims to protect consumers from potentially unfair terms and an example of a potentially unfair term could be where a consumer is being charged a disproportionately high sum in circumstances where they are not receiving the full benefit of the contract. An unfair term in a contract is unenforceable.
  • However, where the service being provided by a supplier is not contingent on the number of people attending, for example, a DJ, live band and some wedding venues it may be more difficult for a consumer to argue for a price reduction where the wedding is scaled down. This is because the service would need to have been supplied irrespective of the number of people in attendance. In this scenario, the most efficient and cost-effective approach would be for consumers to try their best to negotiate a reduced priced or a rescheduled date.

 

Overview: “Where the contract price is determined by the number of guests attending, it may be considered an unfair term for a supplier to charge the same price where fewer guests are in attendance. Consumer legislation aims to protect consumers from being charged a disproportionately high sum in circumstances where they are not receiving the full benefit of the contract.”

 

Can you cancel the wedding if you have a booking, but can now only take 30 people/six at the reception?

  • Our advice to couples is to always check the cancellation clauses in their contracts and to take great care before cancelling. Afterall, the risk is that if a party cancels a booking when they had no right to do so, they could risk being in breach of contract.
  • If a couple are seeking the return of funds paid under the contract given a drastically scaled down wedding, it may be possible for the couple to rely on the doctrine of frustration.
  • A contract may be frustrated where the performance of the contract is “radically different from that contemplated by the parties at the time of the contract”.
  • For example,  where a couple have entered into a contract for the provision of services for 100 people but only 6 can attend, it could be argued that the contractual obligations are radically different to that contemplated by the parties at the time of the contract.
  • Where a contract has been frustrated, a couple have the ability to recover monies paid under the contract, though a supplier may be able to retain a proportion of the funds where they can demonstrate that they have incurred expenses for specific to that particular wedding.

 

Overview: “Couples should carefully read their contracts and in particular the cancellation clauses as the devil is very much in the detail. However, couples may be able to exit the contract with their suppliers where the performance of the contract is radically different from that contemplated by the parties at the time of the contract”.

 

If you have a big venue and they are still allowing it and you’re going ahead, can you ask for a reduction?

  • In the first instance, couples are encouraged to check the terms of their contracts to see whether any provision has been made for a price reduction where there is a reduction in guests attending.
  • Where the contract is for a “dry hire venue” (e.g. venue only without catering and decoration) the  difficulty couples may face is that the venue may attempt to argue that irrespective of the number of guests in attendance, exclusive use of the venue would be necessary and therefore no price reduction should be provided. In these circumstances, couples may attempt a negotiation exercise to reduce the contract price.
  • Where the venue contract also includes catering and decoration, as these services are often contingent on the number of people attending, couples may be entitled to a price reduction on the catering and decoration element of the contractual price given the reduced guest list size.

 

Overview: “Couples should check whether the contract makes provision for a price reduction where there is a reduction in the number of guests attending.  It is likely to be easier to argue a price reduction for services which are charged based on the number of guests attending. Many wedding venues which provide exclusive use to a couple for the wedding day may argue against a price reduction as the service they are offering will not change irrespective of the number of guests attending”.    


If you can still have the ceremony at a venue, but not the reception – can they keep the reception money and insist you have it at a later day?

  • Couple may wish to agree an alternative day for their reception; however, the Competition and Markets Authority have made it clear that couples should not be pressurised in accepting an alternative or rescheduled date.
  • The Competition and Markets Authority also state that where a service under the contract is not going ahead, wedding supply businesses should offer a refund. However, where legitimate costs have been incurred by the business specifically for the wedding (e.g. food tasting or bespoke table centre pieces), they may be entitled to retain this sum.

 

Overview “It is likely to be unfair for a wedding venue to retain the entire contract price for a reception where the event is not going ahead.  If a wedding venue attempt to insist on keeping the entire contract price for the reception, this could be considered an unfair term and therefore, unenforceable.”


If the registrar can’t do the ceremony (many are local councils are still not doing weddings yet as too busy registering births and deaths), can the reception venue make you pay for a reception for six people if the wedding doesn’t go ahead?

Overview : “Where the wedding ceremony and reception are due to take place at the same venue and you have entered into the same contract for both, a couple may argue that on the basis that the reception was dependent on the wedding ceremony taking place, the contract has been frustrated and the parties are discharged from future obligations (including payment terms). Where the wedding ceremony and reception are at two different venues and a couple are bound by different contracts, the position is more complicated, and it may not be so straightforward for a couple to avoid their payment obligations. In these circumstances, couples should check their contract terms carefully to see whether any provisions can assist them, failing which, couples may attempt to negotiate a price reduction or rescheduled date.”

 

This legal blog was compiled by Pranav Bhanot, a litigation solicitor with a specialist interest in wedding and event industry disputes at leading law firm Meaby&Co Solicitors LLP.

Over the COVID-19 pandemic, Meaby&Co Solicitors LLP have provided legal guidance on cancelled/postponed wedding supplier contracts to over 300 couples and 100 wedding suppliers.

If you have any queries relating to weddings taking place under Covid-19 restrictions or any other events please do not hesitate to contact us for a free, no-obligation chat on 0207 703 5034  or fill out our contact form and we will come back to you.  We are happy to answer your questions and advise how we may be able to help.

 

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