Company Secretary's Link
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*Not publishing after 2014*
Company Secretary's Link offers a comprehensive, easy to use reference and guidance tool for all company secretaries. This source provides an up to date and authoritative reference service on this rapidly growing area of business.
From audit arrangements to trading on the Internet, it covers a broad span of subjects in unrivalled depth. Whether it's a quick reference on new regulatory procedures, or more in depth material to help guide a strategic business decision, Company Secretary's Link provides the busy company secretary, accountant, finance manager, consultant and anyone involved in the running of a business, with all the information at their fingertips.
SOURCE CURRENCY
Updated four times a year.
AUTHOR INFORMATION
Robert Bond, Speechly Bircham LLP
Rebecca Cave, Taxwriter Limited
Andrew Haynes
Alistair Hogarth, Landwell
Emma Lloyd, Nabarro LLP
Sonia McKay, Working Lives Institute
David Martin, Buddenbrook Consultancy
Mike Mead, MSc, FCII
Glynis D Morris, Chartered Accountant
Andrea Oates, Freelance Health and Safety Writer
Alec Ure, Alec Ure & Associates
David Venus, David Venus & Company
Susan Wallace, FCIS
In This Issue
The following chapters have been updated-Audit Arrangements; Corporate Governance; Document Retention; Financial and Accounting Responsibilities; Insolvency, Health and Safety and Taxation. Particular attention should be paid to the following-
1 Audit Arrangements
This chapter has been updated for developments in the period to 30 June 2014, including in particular:
(a) The publication by the Financial Reporting Council (FRC) of Bulletin 4 ‘Recent Developments in Company Law, the Listing Rules and Auditing Standards that affect United Kingdom Auditor’s Reports’.
(b) The publication by the Institute of Chartered Accountants in England and Wales (ICAEW) of TECH 14/13 ‘Disclosure of auditor remuneration’, which sets out the position based on legislation and other pronouncements in force at December 2013, but is substantively unchanged from the earlier guidance on this subject.
(c) The FRC report on the results of its audit quality review activities in 2013/14.
(d) The finalisation of a new EC Regulation on the statutory audit of public interest entities and related changes to the Statutory Audit Directive. Areas affected include auditor independence, the provision of non-audit services by auditors, auditor reporting, audit committees and changes in audit appointments. Member States have until 17 June 2016 to translate the amended Directive into their national legislation and the Regulation generally applies from the same date.
3 Corporate Governance
This chapter has been updated for developments in the period to 30 June 2014, including in particular detailed FRC proposals for changes to the UK Corporate Governance Code. These relate primarily to the principles and provisions on executive remuneration, risk management and going concern and are intended to apply for periods beginning on or after 1 October 2014.
7 Employment
Updates on case law including on:
· Simply to take account of the unequal bargaining power of the work actors is insufficient to establish a contract of service between a worker, an employment agency and a hirer.
· An employee can be fairly dismissed after having blown the whistle if the dismissal is as a consequence of the employee having become unmanageable due to the continuous making of complaints.
· An individual who is working without documents but who has been subjected to sexual harassment in the workplace, is not absolutely debarred from taking a claim of harassment where the harassment is not intrinsically linked to the individual’s legal status.
· A worker on call in a residential care home is entitled to the national minimum wage, even if they could sleep while on call, provided that there was (as in this case) a statutory requirement for the employee to be on the premises.
· The calculation of holiday pay should include commission where, had the employee been at work, he would have been paid.
· It is enough for employees to show that a provision, criterion or practice was applied to them and that it put them at a disadvantage without having to show why they had suffered the disadvantage.
· A false explanation put forward by the employer for why there was a difference in treatment between two comparable employees would be sufficient to amount to that ‘something more’ to cause a shift in the burden of proof from the employee to the worker.
· Victimisation which occurs post termination is also covered under discrimination law.
· The protection under the Equality Act 2010 that covers nationality does not extend to mistreatment on the grounds of immigration status.
· Although individuals in civil partnerships have equal access to rights as would apply to married couples the right only applies to those benefits accrued after the legislation was in force from 2004.
· Where the employee requests a reasonable adjustment in a disciplinary claim the fact that more than three months has passed since the request is make does not necessarily mean that the request is out of time.
· Making remarks about an employee’s age in the context of a meeting to discuss his employment future would amount to age discrimination, although, where a substantial amount of time elapses prior to the employee giving notice to resign may exclude a claim of constructive dismissal..
· Making remarks about an employee’s age in the context of a meeting to discuss his employment future would amount to age discrimination.
· A sickness that continued beyond the employee’s maternity leave is dealt with in the same way as any other sickness.
· Entitlements under maternity do not apply to surrogacy.
· Termination of a temporary contract to enable the original job holder to return does not amount to a redundancy.
· The consistent application of a term in relation to redundancy pay can be taken as incorporated into a contract.
· The ban on secondary action under UK law does not prevent the union from representing its members and therefore is not in breach of the European Convention on Human Rights.
· In cases of a transfer of short-term duration the service provision change rules do not apply.
· To come within the rules of TUPE the change must involve a change in the employees that make up the workforce and a change solely of workplace location, that does not affect staff numbers is not a change in the business.
· In the process of a transfer employees cannot bring claims for failure to consult against the new employer, as the obligation to consult sits with the old employer.
· In May 2014 the public services union Unison was granted permission to appeal to the Court of Appeal on its application that the new tribunal fee system denies access to justice to workers, is unlawful and has a disproportionate negative impact on women.
Legislative changes:
· The Small Business, Enterprise and Employment Bill 2014 provides that exclusivity clauses in zero hours contracts are unenforceable.
· With effect from 20 June 2014 the right to request in writing flexible working extends to all employees who have worked for their employer for at least 26 weeks with an obligation on employers to deal with requests in a ‘reasonable manner’ and within a ‘reasonable period of time’.
· Under the Enterprise and Regulatory Reform Bill 2012 and with effect from 6 May 2014, mandatory ACAS conciliation must take place before a claimant can start tribunal proceedings.
· The Small Business, Enterprise and Employment Bill 2014 will impose a penalty on employers who fail to pay awards made by tribunals to employees. The Bill will also increase the penalties on employers who pay less than the national minimum wage.
9 Financial and Accounting Responsibilities of Directors
This chapter has been updated for developments in the period to 30 June 2014, including in particular:
(a) Changes to the Financial Reporting Standard for Smaller Entities (FRSSE) to enable micro-entities to continue to adopt this standard and the FRC’s latest plans for the future of the FRSSE.
(b) The publication by the FRC of ‘Guidance on the Strategic Report’.
(c) The publication of an updated version of the FRC statement ‘True and Fair’.
(d) New disclosure requirements for listed companies with a controlling shareholder - these apply for financial years ending after 31 August 2014.
(e) Proposed changes to the FRC’s operating procedures in respect of corporate reporting reviews.
(f) A consultation paper from the Department for Business, Innovation and Skills (BIS) on UK implementation of the new extractive industry reporting requirements under the EU Accounting Directive.
(g) Details of new Financial Reporting Lab projects on dividend policy and capacity, integrated reporting and electronic reporting.
(h) The publication of a number of revised Statements of Recommended Practice (SORPs). These have been updated in line with FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ and apply for periods beginning on or after 1 January 2015.
10 Health and Safety
This chapter has been updated to include the latest Health and Safety Executive (HSE) proposals to exempt some self-employed people from section 3(2) of the Health and Safety at Work etc Act 1974; details of recently released official statistics on work-related fatalities; the latest (seventh) corporate manslaughter conviction; the TUC's guide for workplace representatives on smoke-free workplaces; HSE proposals to amend the approved codes of practice (ACOPs) on work equipment, power presses and woodworking equipment through a "light-touch" review; the results of the HSE's latest asbestos in schools inspection initiative; the HSE consultation on draft 2015 Control of Major Accident Hazard (COMAH) Regulations to implement the so-called Seveso III directive; the HSE proposals to align domestic legislation on Classification, Labelling and Packaging (CLP) with the directly-acting European CLP Regulation.
It also reports on a successful legal challenge by the general Unite union concerning release of work-history information by HMRC in relation to workers suspected of dying from an industrial disease and recent developments with regard to whistleblowing (an Employment Appeal Tribunal (EAT) case) and blacklisting (in the High Court). Finally, it makes reference to new legislation on the horizon: the Petroleum (Consolidation) Regulations 2014 and the Explosives Regulations 2014 which will both come into force in October 2014.
11 Insolvency
This chapter has been updated for developments in the period to 14 July 2014, including in particular:
Consultations
· A summary of the consultation launched by the Insolvency Service to seeks views on the exercise of powers set out in the Enterprise and Regulatory Reform Act 2013, to ensure continuity of utility and IT services to insolvent businesses.
Case-law
· Re Agrenco Madeira Comercio Internacional Lda [2014] All ER (D) 118 (Apr) - consideration of the effect of the dissolution of a Portuguese company on the liquidation process in England;
· Re Brown Bear Foods Ltd; Shaw v Webb [2014] EWHC 1132 (Ch) - considers the circumstances when the court may decline to make an administration order despite the fact that the preconditions in paragraph 11 of Schedule B1 to the Insolvency Act 1986 have been made out.
· Hockin v Marsden [2014] EWHC 763 (Ch) - considers an application for assignment of a claim under paragraph 74 of Schedule B1 to the Insolvency Act 1986;
· Re Lehman Brothers International (Europe) (in administration) [2014] EWHC 704 - further detail on the Waterfall judgment and the ranking of payments where there is a surplus in the administration estate;
· Re Storm Funding Ltd (in administration) [2013] EWHC 4019 - notes that an appeal is outstanding to the Court of Appeal.
· Re Apcoa Parking (UK) Limited [2014] EWHC 997 - commentary on the latest decision involving court approval of a scheme of arrangement for a foreign company.
17 Taxation
This chapter has been fully updated with announcements made up to 14 July 2014, including changes introduced by the Finance Act 2014. New or revised commentary has been added in the following areas:
· Employee ownership trust (EOT)
· Creative sector reliefs
· Agency workers
· Offshore intermediaries
· Statutory sick pay
· Capital Allowance example
· PAYE codes
· Stamp Duty Land Tax
· Air passenger duty
· Annual tax on enveloped dwellings (ATED)
· Aggregates levy
Rates and allowances have been updated for the following taxes or reliefs:
· Personal allowances
· Rates of income tax
· Capital gains tax
· Benefits in kind
· Advisory fuel rates
· Air passenger duty
· ATED
· Climate change levy
Company Secretary's Link offers a comprehensive, easy to use reference and guidance tool for all company secretaries. This source provides an up to date and authoritative reference service on this rapidly growing area of business.
From audit arrangements to trading on the Internet, it covers a broad span of subjects in unrivalled depth. Whether it's a quick reference on new regulatory procedures, or more in depth material to help guide a strategic business decision, Company Secretary's Link provides the busy company secretary, accountant, finance manager, consultant and anyone involved in the running of a business, with all the information at their fingertips.
SOURCE CURRENCY
Updated four times a year.
AUTHOR INFORMATION
Robert Bond, Speechly Bircham LLP
Rebecca Cave, Taxwriter Limited
Andrew Haynes
Alistair Hogarth, Landwell
Emma Lloyd, Nabarro LLP
Sonia McKay, Working Lives Institute
David Martin, Buddenbrook Consultancy
Mike Mead, MSc, FCII
Glynis D Morris, Chartered Accountant
Andrea Oates, Freelance Health and Safety Writer
Alec Ure, Alec Ure & Associates
David Venus, David Venus & Company
Susan Wallace, FCIS
In This Issue
The following chapters have been updated-Audit Arrangements; Corporate Governance; Document Retention; Financial and Accounting Responsibilities; Insolvency, Health and Safety and Taxation. Particular attention should be paid to the following-
1 Audit Arrangements
This chapter has been updated for developments in the period to 30 June 2014, including in particular:
(a) The publication by the Financial Reporting Council (FRC) of Bulletin 4 ‘Recent Developments in Company Law, the Listing Rules and Auditing Standards that affect United Kingdom Auditor’s Reports’.
(b) The publication by the Institute of Chartered Accountants in England and Wales (ICAEW) of TECH 14/13 ‘Disclosure of auditor remuneration’, which sets out the position based on legislation and other pronouncements in force at December 2013, but is substantively unchanged from the earlier guidance on this subject.
(c) The FRC report on the results of its audit quality review activities in 2013/14.
(d) The finalisation of a new EC Regulation on the statutory audit of public interest entities and related changes to the Statutory Audit Directive. Areas affected include auditor independence, the provision of non-audit services by auditors, auditor reporting, audit committees and changes in audit appointments. Member States have until 17 June 2016 to translate the amended Directive into their national legislation and the Regulation generally applies from the same date.
3 Corporate Governance
This chapter has been updated for developments in the period to 30 June 2014, including in particular detailed FRC proposals for changes to the UK Corporate Governance Code. These relate primarily to the principles and provisions on executive remuneration, risk management and going concern and are intended to apply for periods beginning on or after 1 October 2014.
7 Employment
Updates on case law including on:
· Simply to take account of the unequal bargaining power of the work actors is insufficient to establish a contract of service between a worker, an employment agency and a hirer.
· An employee can be fairly dismissed after having blown the whistle if the dismissal is as a consequence of the employee having become unmanageable due to the continuous making of complaints.
· An individual who is working without documents but who has been subjected to sexual harassment in the workplace, is not absolutely debarred from taking a claim of harassment where the harassment is not intrinsically linked to the individual’s legal status.
· A worker on call in a residential care home is entitled to the national minimum wage, even if they could sleep while on call, provided that there was (as in this case) a statutory requirement for the employee to be on the premises.
· The calculation of holiday pay should include commission where, had the employee been at work, he would have been paid.
· It is enough for employees to show that a provision, criterion or practice was applied to them and that it put them at a disadvantage without having to show why they had suffered the disadvantage.
· A false explanation put forward by the employer for why there was a difference in treatment between two comparable employees would be sufficient to amount to that ‘something more’ to cause a shift in the burden of proof from the employee to the worker.
· Victimisation which occurs post termination is also covered under discrimination law.
· The protection under the Equality Act 2010 that covers nationality does not extend to mistreatment on the grounds of immigration status.
· Although individuals in civil partnerships have equal access to rights as would apply to married couples the right only applies to those benefits accrued after the legislation was in force from 2004.
· Where the employee requests a reasonable adjustment in a disciplinary claim the fact that more than three months has passed since the request is make does not necessarily mean that the request is out of time.
· Making remarks about an employee’s age in the context of a meeting to discuss his employment future would amount to age discrimination, although, where a substantial amount of time elapses prior to the employee giving notice to resign may exclude a claim of constructive dismissal..
· Making remarks about an employee’s age in the context of a meeting to discuss his employment future would amount to age discrimination.
· A sickness that continued beyond the employee’s maternity leave is dealt with in the same way as any other sickness.
· Entitlements under maternity do not apply to surrogacy.
· Termination of a temporary contract to enable the original job holder to return does not amount to a redundancy.
· The consistent application of a term in relation to redundancy pay can be taken as incorporated into a contract.
· The ban on secondary action under UK law does not prevent the union from representing its members and therefore is not in breach of the European Convention on Human Rights.
· In cases of a transfer of short-term duration the service provision change rules do not apply.
· To come within the rules of TUPE the change must involve a change in the employees that make up the workforce and a change solely of workplace location, that does not affect staff numbers is not a change in the business.
· In the process of a transfer employees cannot bring claims for failure to consult against the new employer, as the obligation to consult sits with the old employer.
· In May 2014 the public services union Unison was granted permission to appeal to the Court of Appeal on its application that the new tribunal fee system denies access to justice to workers, is unlawful and has a disproportionate negative impact on women.
Legislative changes:
· The Small Business, Enterprise and Employment Bill 2014 provides that exclusivity clauses in zero hours contracts are unenforceable.
· With effect from 20 June 2014 the right to request in writing flexible working extends to all employees who have worked for their employer for at least 26 weeks with an obligation on employers to deal with requests in a ‘reasonable manner’ and within a ‘reasonable period of time’.
· Under the Enterprise and Regulatory Reform Bill 2012 and with effect from 6 May 2014, mandatory ACAS conciliation must take place before a claimant can start tribunal proceedings.
· The Small Business, Enterprise and Employment Bill 2014 will impose a penalty on employers who fail to pay awards made by tribunals to employees. The Bill will also increase the penalties on employers who pay less than the national minimum wage.
9 Financial and Accounting Responsibilities of Directors
This chapter has been updated for developments in the period to 30 June 2014, including in particular:
(a) Changes to the Financial Reporting Standard for Smaller Entities (FRSSE) to enable micro-entities to continue to adopt this standard and the FRC’s latest plans for the future of the FRSSE.
(b) The publication by the FRC of ‘Guidance on the Strategic Report’.
(c) The publication of an updated version of the FRC statement ‘True and Fair’.
(d) New disclosure requirements for listed companies with a controlling shareholder - these apply for financial years ending after 31 August 2014.
(e) Proposed changes to the FRC’s operating procedures in respect of corporate reporting reviews.
(f) A consultation paper from the Department for Business, Innovation and Skills (BIS) on UK implementation of the new extractive industry reporting requirements under the EU Accounting Directive.
(g) Details of new Financial Reporting Lab projects on dividend policy and capacity, integrated reporting and electronic reporting.
(h) The publication of a number of revised Statements of Recommended Practice (SORPs). These have been updated in line with FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ and apply for periods beginning on or after 1 January 2015.
10 Health and Safety
This chapter has been updated to include the latest Health and Safety Executive (HSE) proposals to exempt some self-employed people from section 3(2) of the Health and Safety at Work etc Act 1974; details of recently released official statistics on work-related fatalities; the latest (seventh) corporate manslaughter conviction; the TUC's guide for workplace representatives on smoke-free workplaces; HSE proposals to amend the approved codes of practice (ACOPs) on work equipment, power presses and woodworking equipment through a "light-touch" review; the results of the HSE's latest asbestos in schools inspection initiative; the HSE consultation on draft 2015 Control of Major Accident Hazard (COMAH) Regulations to implement the so-called Seveso III directive; the HSE proposals to align domestic legislation on Classification, Labelling and Packaging (CLP) with the directly-acting European CLP Regulation.
It also reports on a successful legal challenge by the general Unite union concerning release of work-history information by HMRC in relation to workers suspected of dying from an industrial disease and recent developments with regard to whistleblowing (an Employment Appeal Tribunal (EAT) case) and blacklisting (in the High Court). Finally, it makes reference to new legislation on the horizon: the Petroleum (Consolidation) Regulations 2014 and the Explosives Regulations 2014 which will both come into force in October 2014.
11 Insolvency
This chapter has been updated for developments in the period to 14 July 2014, including in particular:
Consultations
· A summary of the consultation launched by the Insolvency Service to seeks views on the exercise of powers set out in the Enterprise and Regulatory Reform Act 2013, to ensure continuity of utility and IT services to insolvent businesses.
Case-law
· Re Agrenco Madeira Comercio Internacional Lda [2014] All ER (D) 118 (Apr) - consideration of the effect of the dissolution of a Portuguese company on the liquidation process in England;
· Re Brown Bear Foods Ltd; Shaw v Webb [2014] EWHC 1132 (Ch) - considers the circumstances when the court may decline to make an administration order despite the fact that the preconditions in paragraph 11 of Schedule B1 to the Insolvency Act 1986 have been made out.
· Hockin v Marsden [2014] EWHC 763 (Ch) - considers an application for assignment of a claim under paragraph 74 of Schedule B1 to the Insolvency Act 1986;
· Re Lehman Brothers International (Europe) (in administration) [2014] EWHC 704 - further detail on the Waterfall judgment and the ranking of payments where there is a surplus in the administration estate;
· Re Storm Funding Ltd (in administration) [2013] EWHC 4019 - notes that an appeal is outstanding to the Court of Appeal.
· Re Apcoa Parking (UK) Limited [2014] EWHC 997 - commentary on the latest decision involving court approval of a scheme of arrangement for a foreign company.
17 Taxation
This chapter has been fully updated with announcements made up to 14 July 2014, including changes introduced by the Finance Act 2014. New or revised commentary has been added in the following areas:
· Employee ownership trust (EOT)
· Creative sector reliefs
· Agency workers
· Offshore intermediaries
· Statutory sick pay
· Capital Allowance example
· PAYE codes
· Stamp Duty Land Tax
· Air passenger duty
· Annual tax on enveloped dwellings (ATED)
· Aggregates levy
Rates and allowances have been updated for the following taxes or reliefs:
· Personal allowances
· Rates of income tax
· Capital gains tax
· Benefits in kind
· Advisory fuel rates
· Air passenger duty
· ATED
· Climate change levy
