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Coronavirus, Commercial Contracts, and Force Majeure

As cases of the novel coronavirus, or COVID-19, continue to increase, having now reached pandemic status, as defined by the World Health Organization, many businesses are feeling the impact. This is perhaps most keenly felt where employees are concerned, either with staff taking sick leave, or with the need to increase home-working. As the impact worsens, however, it is likely to start impacting more supply chains and other areas in which contracts play a key role.

The basic principle that applies to commercial contracts that are subject to English law is that the parties remain bound to perform their obligations under them although it might have become more difficult or expensive to do so. However, many commercial contracts include provisions which expressly provide a right to terminate or some other right or remedy in particular circumstances described by the contract. The most common provisions of this type found in commercial contracts governed by English law are force majeure clauses, which excuse performance in the circumstances stated in the clause.

An important question that businesses should be considering now is whether COVID-19 amounts to a force majeure event under the terms of any force majeure clause that is included in any current contract that they have with another party, and if so, how does it apply to the circumstances?

What is Force Majeure?

The term “force majeure” originates in French, meaning “superior force”. A force majeure clause in a contract is designed to relieve the parties from their contractual obligations when events beyond their control (or reasonable control) prevent or hinder their performance of those obligations.

Rather than bringing the contract to an end, the party affected by the force majeure event will often be excused from performance by a force majeure clause in the contract for the resulting delay or non-performance, and the time within which performance is required will be extended. It is also quite common for force majeure clauses to allow one or both parties to terminate the contract – but do not state that the contract automatically ends – if the force majeure event and its effects on performance continue for a certain period of time.

Contracts under English law must include specific provisions covering force majeure if the parties want to be able to rely on such exemptions from a contractual obligation. English law does not apply any doctrine of force majeure or imply any force majeure term or effect in any contract; whether a force majeure consequence arises in relation to a contract will depend on the precise circumstances and wording of the force majeure clause, if any.

Since the courts will generally prefer to enforce the performance of a contract, the party seeking to rely on a force majeure clause will usually not be able to do so unless it shows that the clause applies. Unless the contract expressly says otherwise, it will have to show that performance is legally or physically impossible, not just that it is commercially impractical or uneconomic to perform.

Is the Coronavirus a Force Majeure Event?

Whether or not the impact of COVID-19 amounts to a force majeure event will ultimately come down to the wording of the relevant clauses in the contract. Some force majeure clauses are more specific than others. If a list of possible events is included in the clause, the question will be whether or not the virus falls within one of those events. Until recently, for example, a general reference to “pandemics” would not have been helpful; however, as the World Health Organisation has now classified COVID-19 as a pandemic, such a reference in a force majeure clause would be more likely to be useful. Alternatively, the clause might include other, more general events such as “act of god”, and/or a catch-all provision such as, “any other event which is beyond the reasonable control of the effected party whether of a similar or dissimilar nature to any of the foregoing events”, but such provisions are not a guarantee of success. In any event, it will be for the party claiming that a force majeure clause covers COVID-19 and the particular circumstances relating to the contract to demonstrate that the clause does cover it.

Also of key importance will be the parties’ knowledge at the time the contract was formed. Some force majeure clauses refer to “unforeseeable events”. In such cases, the parties’ prior knowledge of outbreaks of COVID-19 in the relevant areas will be an important consideration. If the parties knew of the outbreak of the virus when the contract was formed and did not make an express reference to it in the force majeure clause, the courts may not subsequently allow a party to the contract to rely on it as a force majeure event under any non-COVID-19 wording in the clause.

Even where it is possible to rely on a force majeure clause with respect to COVID-19, such clauses should be handled with care and do not necessarily represent an “easy way out”. There may, for example, be an obligation to mitigate the impact of the force majeure event (express or implied); the scope of the clause may be limited; and there may be time limits.

Depending upon the wording of a force majeure clause, then, it may indeed be the case that the coronavirus amounts to a force majeure event. Nevertheless, force majeure clauses are not designed to be, and are not, easy get-out clauses. They cannot be used to avoid liability for contractual breaches that would have occurred in any case or which were not caused by force majeure, and many will include limitations to ensure that contracts cannot be prematurely terminated simply because performance has become tricky.

Frustration

Where there is no force majeure or other helpful clause in a contract, or where there is such a clause but it does not cover COVID-19 and the particular circumstances, the English law doctrine of “frustration” might apply in certain very exceptional circumstances. Under this doctrine, if an unforeseen event renders a contract impossible to perform or transforms the obligations under it into something radically different, the contract is, in law, deemed to terminate. This occurs automatically, not by virtue of any termination by either party. Frustration only occurs if, on a strict view of a situation, there is such impossibility or transformation of obligations: if the performance of contractual obligations simply becomes more difficult or expensive, that is very unlikely to be sufficient for the doctrine of frustration to apply. If frustration does apply, it may be difficult to ascertain what financial adjustments between the parties are required to be made under contract law.

Complexity of Issues Requires Proper Legal Advice

Interpreting the scope and effect of any force majeure clause or reaching a view as to whether frustration applies in any situation may be a complicated, difficult, and uncertain legal matter. Similarly, reaching a view as to the financial effect on the parties of the application of a force majeure clause or frustration will also be a complex, difficult, and uncertain issue.

As well as considering suspension or the ending of a contract, it will be necessary to consider whether there is a liability to refund payments already made under the contract or to pay for value received or money expended before the suspension or termination. Therefore, in all cases you should seek appropriate professional independent legal advice as to where you stand in relation to COVID-19 and its effects on the performance of any commercial contract.

Law Commission Report on the Electronic Execution of Documents

Electronic Signature

Following our blog back in September 2018 on the Law Commission Consultation (available here), the Law Commission has now issued its report on the electronic execution of documents.

The report confirms that current laws permit electronic signatures, but that the law is not very accessible to non-lawyers and businesses. The aim of the report is to clarify concerns as to whether electronic signatures are admissible and to ensure that the law governing this area is sufficiently certain. The Law Commission has set out an option for reform – that the Government may wish to consider codifying the law on electronic signatures in order to improve the accessibility of the law.

It is important to note that this report excludes two categories: 1) documents that are to be registered at the Land Registry; and 2) wills. The issue of whether electronic signatures can be used in these two instances is being considered separately.

The report affects England and Wales only.

Key Conclusions

1. The Law Commission report confirms that an electronic signature can be used to execute a document (including a deed) provided that the person signing the document intends to authenticate the document and that they comply with any execution formalities. The Commission’s view is based upon legislation and court decisions which relate to both non-electronic and electronic signatures.

2. An electronic signature is admissible in legal proceedings.

3. In terms of executing deeds in the presence of a witness, the physical presence of that witness is still required even where both the person executing and the person witnessing are both doing so electronically.

The Law Commission concluded that parties could not be confident that the current law allows for “remote” witnessing (where the witness is not physically present when the signatory signs the deed).  The Law Commission considered two potential options to address this issue:

a. Witnessing by video link and witnessing through a signature platform; or
b. The use of digital signatures or other form of technology to replace witnessing.

Next Steps

The report recommends that:

1. An industry working group be set up to produce guidance for the use of electronic signatures in different commercial transactions;

2. The industry working group consider practical issues concerning the electronic execution of documents, provide solutions to the practical and technical obstacles for video witnessing of electronic signatures on deeds, and provide for legislative reform to overcome these obstacles if required; and

3. There should be a future review of the law of deeds and consideration as to whether the current requirements for executing a document as a deed are still relevant today.

New Laws on Non-Disclosure Agreements – What Will They Mean for You?

NDAs in Employment

Non-Disclosure Agreements or ‘NDAs’ have become something of a touchy subject in recent years owing to their increasingly frequent appearances in high-profile cover-ups and abuse scandals. In particular, NDAs are said to be widely used to cover up allegations of unlawful discrimination and sexual harassment in the workplace and have featured in a number of major news stories, not least those involving figures such as Sir Philip Green and Harvey Weinstein.

Settlement agreements also feature significantly in this area and are used to resolve workplace disputes without recourse to an Employment Tribunal. Settlement agreements can cover matters other than harassment and discrimination and may even be used in cases where an employee leaves without any trouble. They can also be used to impose obligations of confidentiality on both parties to a dispute, meaning that neither party can discuss the circumstances leading up to the agreement. Despite their obvious use as a legitimate tool for dispute resolution and for the protection of employers and employees alike, however, such agreements also fall prey to misuse.

In light of such issues, last month, Business Minister, Kelly Tohurst, announced plans for new legislation designed to stop NDAs from being misused in this way. The proposed reforms would:

  • Require employers to clearly explain the limitations of confidentiality clauses in plain English, within settlement agreements and written statements from employees. This should ensure that individuals properly understand what they are signing and what their rights are.
  • Build on existing legislation so that individuals signing NDAs get independent legal advice on the limitations of confidentiality clauses. This would include making it clear that information can still be disclosed to the police, legal professionals, and other regulated health and care professionals (e.g. doctors and social workers), irrespective of the NDA.
  • Introduce new enforcement measures to deal with confidentiality clauses that do not comply with the law, such as voiding those not following the new legislative requirements.

Critics of the proposals have said that they do not go far enough. Employees entering into NDAs would not be permitted to disclose matters covered by the NDA to their friends and relatives, and detail relating to permitted disclosure to regulations such as the Financial Conduct Authority also appears to be lacking.

Implications for Employers

For many businesses, this should not make a significant amount of difference. When announcing the proposals in July 2019, Ms Tolhurst stated that:

“The vast majority of businesses comply with the law and use NDAs legitimately – from protecting commercially sensitive information to preventing information being shared with competitors.”

“We will not tolerate the use of NDAs to silence and intimidate victims from speaking out. The new legislation will stamp out misuse, tackle unacceptable workplace cultures, protect individuals, and create a level playing field for businesses that comply with the law.”

At present NDAs and confidentiality clauses are barred from preventing individuals from reporting wrongdoing in the public interest (also known as ‘whistleblowing’). Such disclosures could include a criminal offence, danger to health and safety, or failing to comply with legal obligations. NDAs and confidentiality clauses are also unable to prevent individuals from taking matters to an employment tribunal.

In the realm of employment, written confidentiality clauses are a common (and, indeed, perfectly normal and acceptable) feature in employment contracts. Not only that, but some employees actively prefer NDAs in the form of settlement agreements as, when used properly, they can alleviate the stresses of an acrimonious departure, legal action, and tribunals. Moreover, the courts have established that all employment contracts contain an implicit expectation of confidentiality with respect to information which has a necessary quality of confidence. This cannot, however, be used to cover up immoral or grossly unfair conduct.

The proposed reforms will not, therefore, have a negative impact on those businesses using NDAs and confidentiality clauses properly, and they will continue to have an important and valid role to play. It is nevertheless good practice to ensure that your documentation complies ahead of time, making sure that the boundaries of such provisions are clearly defined and clearly explained, and making sure that you do not attempt to prevent individuals from making disclosures that should be permissible.

What About Commercially Sensitive Information?

Not all NDAs are created equal. Indeed, many have very little to do with terms of employment. With so much talk in the media of new laws to clamp down on NDAs, however, it is easy to become concerned that all NDAs are being targeted.

It is important to understand that the proposed reforms are specifically targeted at those NDAs and confidentiality provisions that seek to supress evidence of wrongdoing in the workplace. NDAs which are rightfully used to protect commercially valuable information, for example, when sharing confidential information with another business for limited purposes in a joint project, should not be affected.

As is often the case in such matters, if you are using NDAs as the law and good practice dictate, there is no reason to believe that business will not simply continue as usual.

When Will the Reforms Take Effect?

At present, there is no parliamentary timetable for the new law, but we will update you as and when more precise information becomes available. In the meantime, your comments are, as ever, welcome.

Do you use NDAs in your business? Do you include confidentiality provisions in employment contracts? How do you limit the scope of such provisions to balance the fair and lawful treatment of your employees with the protection of your commercially sensitive information?

Brexit Notes: What Will a No-Deal Brexit Mean for Your Commercial Contracts?

No-Deal Brexit

As at the time of writing, the UK is due to leave the European Union on 29 March 2019 (as a result of having served a formal notice under Article 50 of the Treaty on European Union to terminate its membership of the EU), but whether this will be delayed or will take place in a ‘no-deal’ scenario it is still not clear. For the purposes of this post, we assume there will be an exit in a no-deal scenario, but this is a fluid situation that could change rapidly.

General Impact on Contracts of No-Deal

This note looks at the potential impact of a ‘no-deal’ exit on your existing and future commercial sales, purchases, or other contracts. (Note that it does not cover any contracts that you have with consumer customers.) Since contract terms will differ from contract to contract, and the subject matter and circumstances of each contract will also differ, it is impossible to provide any specific guidance or advice. We can, however, highlight some areas that you might need to focus on and so this note concentrates on a few issues that you should be considering.

Consider the Effect of No-Deal on Each of Your Contracts

In relation to an existing or a future contract, you will need to form a view as to whether Brexit might have an adverse impact, and whether that impact might be on you or on the other party to the contract. Whilst Brexit itself will have limited impact on contract law (except in relation to agency and other specialist types of contract), Brexit might have an effect in relation to the parties’ obligations set out in a contract.

Brexit might give rise to greater expense being incurred in order to perform the contract; for example, costs might rise due to new or increased (import or export) tariffs or customs checks applying to trading between the UK and the EU, due to currency exchange rates fluctuating, or due to there being restrictions on the free movement of people. In each case, this could affect the overall costs of buying or selling goods, products, or materials.

Brexit might make it more difficult or even impossible to perform the contract, or it might be that performing it will be commercially unattractive or that it will produce a different outcome from that required or expected by one or both parties. If a party is unable to perform a contract due to Brexit, it could find itself in breach of contract, and, as a result, liable for that breach.

Taking Steps to Mitigate Any Problems

We suggest that you consider firstly those contracts which will still be in existence when Brexit occurs (either on 29 March or any later date on which it is to occur), and secondly, contracts yet to be entered into either before or after it occurs.

Existing Contracts

Taking existing contracts first, if you conclude that a particular contract will be more onerous or expensive due to effects of Brexit, you might decide that you cannot afford to continue with it as it stands, or that, if possible, you would like to mitigate the adverse effects of Brexit on that contract.

What are your options, if any? If the contract has a termination clause allowing you to terminate in stated circumstances which include Brexit, you could use the clause to end the contract, but this will only be an option if the stated circumstances clearly cover Brexit.

You might instead consider renegotiating the contract if the other party is willing to do so.

If they are not, then you would do well to examine the contract to see if it is possible for you to unilaterally take some other step.

If you are seeking to be excused from performance of the contract and your contract includes a ‘material adverse changes’ clause (“MAC”), you might be able to demonstrate that a no-deal Brexit or its effects is an event or amounts to circumstances falling within the terms of the MAC clause, but all will depend on the precise wording of the MAC clause. If in effect you are looking to the MAC clause for relief from financial hardship due to Brexit, you would need to consider whether the MAC clause provides that relief. It might not allow relief where the relevant event (i.e. Brexit) was an anticipated one.

Many contracts contain ‘force majeure’ clauses which excuse performance where it is prevented or delayed by a cause beyond the reasonable control of the party relying on the clause, but it is more likely that you could make use of a MAC clause than a force majeure clause for several reasons.

Unlike a MAC clause, the scope of wording of a typical force majeure clause is confined to a case where it is not possible to perform obligations under the contract, not merely where it is more expensive or onerous to do so. In order to make use of a force majeure clause, a party would first have to show that when properly interpreted it clearly covered a no-deal Brexit, and that it covered Brexit as an event having a permanent, not temporary effect. Furthermore, a typically drafted force majeure clause would only allow reliance on it if a no-deal Brexit were not reasonably foreseen and the affected party could not reasonably have taken steps to avoid the adverse effect of it. It would seem very difficult to argue that Brexit could not be foreseen unless perhaps the relevant contract was entered into many years before it became apparent that it might occur. However, if the effect of Brexit were to make it impossible to perform the contract (a relatively rare case), it might be possible to make use of a force majeure clause. Where the clause does apply, you need to consider what relief it applies, for example, it might suspend the requirement to perform the particular obligation for a period or indefinitely, or it might give a right to terminate the contract.

Where the contract is incapable of being performed, it is possible, but very unlikely, that the doctrine of ‘frustration’ under the law of contract would apply. Where it does apply, the doctrine would have the effect of rendering the contract void. However, it is a very narrow doctrine and for it to apply, it would require the very purpose of the contract to have been removed by the occurrence of Brexit (i.e. the obligations would have to have been transformed by Brexit into something radically different or performance of the contract would have to be commercially sterile) or it would be physically impossible or illegal to fulfil the contract. Further, the relevant event (Brexit) must have been unforeseen by the parties as a possibility at the time of entering into the contract, and not covered by a term of the contract catering for the impact of Brexit. Although context will be important, then, only in quite rare cases will there be ‘frustration’.

Where there is no ‘frustration’ and there is no term written in the contract which helps in the circumstances, is it possible to argue that as a matter of law, a term is to be implied in the contract whose effect is to provide relief against some adverse impact of Brexit on the contract? This is very unlikely given the strict approach that the courts take when interpreting commercial contracts.

Future Contracts

Turning to contracts yet to be signed, if you conclude that carrying out the obligations under a proposed contract would or might be negatively impacted by Brexit, you might first consider the above points about existing contracts. If you reach the conclusion that you need to provide for some relief from certain effects of Brexit, then you would be well advised to include provisions in the contract catering for your needs. For example, you might insert a clause specifically referring to Brexit allowing for rapid termination of the contract upon its occurrence, or dealing with certain stated consequential effects of it. It might provide that no liability will arise from termination, or it might provide for financial adjustments to be made on termination. Alternatively, you might decide to include a MAC clause which states that it comes into play upon Brexit. If relevant, the MAC clause could provide a mechanism to adjust prices where tariff, customs, or exchange rate changes arise from Brexit. You might decide to include a force majeure clause which very specifically deals with Brexit.

It is worth emphasising, however, that the task of identifying what a Brexit clause should cover and then drafting it in a way that is effective to meet the particular requirements identified is not likely to be an easy one.

A possible option might be to enter into only a very short-term contract, but it might only mitigate and not necessarily avoid a problem arising on occurrence of Brexit.

It is also worth bearing in mind that one party (or even both parties) might not accept that Brexit should have any legal effect on the contract or give rise to any relief in relation to obligations under the contract. If that is the case, then, even if nothing in the contract states or suggests that Brexit might have an impact on the contract in any way, it would be prudent to include suitable wording in the contract whose effect is to make clear that Brexit will not have any effect on the contract.

Food for Thought

This is a complex subject, and we can only offer suggestions as to what you might need to address. A Brexit clause in a contract will not solve all Brexit-related problems. Your particular circumstances and the nature, subject matter, and terms of contracts will dictate what you should consider and what you might do, and as always, you should take professional legal advice in relation to existing and future contracts.

Sign Here Please – Electronic Signatures and the Law

Whether your signature is an example of elegant calligraphy or of the scruffiest scribble, you have probably ‘signed here’ more times than you care to count. The 1677 Statute of Frauds required certain documents to be in writing and signed. This provision is still in force today.

But what of the documents being signed? Predications of the paperless office have become increasingly common over the past 100 years, particularly with the exponential growth of desktop and then mobile computing from the 1980s onwards. While a paperless business world is still, perhaps surprisingly, far from a reality, we are now closer than we have ever been before and think nothing of entire contracts being instantaneously transmitted from the other side of the world, ready for us to read on anything from a desktop computer to a smartphone.

Signing such a contract, though, often still catapults us back to 1677. Paper and biro might have replaced parchment and quill, but that all-important squiggle of ink on a physical page remains commonplace. Electronic signatures have been around for a while in various forms, but a question mark still hangs over them, particularly when it comes to important legal documents.

Clarification from the Law Commission

At last, clarification is at hand. Last month, the Law Commission confirmed that electronic signatures can be used to sign formal legal contracts under English law. Furthermore, the Law Commission has also confirmed that an electronic document is ‘in writing’ for legal purposes if it can be viewed on a screen in a legible form, and that deeds can both exist and be executed electronically.

Despite this, however, the Law Commission has said that there remains “a lack of clarity in the law” which is “discouraging businesses from executing documents electronically when it would be quicker and easier to do so”.

Law Commission Consultation on the Electronic Execution of Documents

With this in mind, the Law Commission has launched a formal consultation on electronic signatures and the electronic execution of documents. Specifically, the consultation seeks to:

“consider whether there are problems with the law around the electronic execution of documents and deeds (including deeds of trust) which are inhibiting the use of electronic documents by commercial parties and, if appropriate, consumers, particularly with regard to:

(a) Electronic signatures;
(b) Witnessing;
(c) Delivery…”

Following the consultation, the Law Commission will consider whether legislative or other changes are required to address these issues.

The consultation is open until 23 November 2018. Full details including a form to participate online are available on the Law Commission website.

Here at Simply-Docs, we are no strangers to electronic documents and if you’re here on our website, we suspect that neither are you. Do you distribute legal documents in electronic form? Do you use electronic signatures too, or do you prefer to execute documents using good old pen and paper? As always, we would love to hear from you in the comments below.

Zeroing in on Zero Hours Contracts?

According to the Office for National Statistics, over 900,000 employees in Britain are currently employed on zero-hours employment contracts. Zero-hours contracts often crop up in the news, and it’s fair to say that they’ve gotten something of a bad name – often not without good reason. Particularly with the rise of the gig economy, zero-hours contracts and other means of securing peoples’ labour without too much commitment have become very popular with some employers.

None of this is to say that the situation is settled, however, and some are now taking action to offer alternatives to their employees. McDonald’s, for example, recently offered fixed-hours contracts to its 115,000 zero-hours employees (according to the BBC, around 20% of employees at the Golden Arches have chosen to take the fixed-hours option. We certainly hope they’re lovin’ it).

On the political front, with a general election once again on our doorstep, the Labour Party’s 2017 manifesto includes a pledge to ban zero-hours contracts. The Liberal Democrats, while not planning to ban them, have pledged to create a formal right for zero-hours employees to request fixed contracts instead. The Conservative Party manifesto, on the other hand, is silent on zero-hours contracts themselves, but nevertheless emphasises the importance of protecting those working in the gig economy – a broad statement of policy to be sure, but one that arguably wouldn’t rule out future action on zero-hours contracts.

In October 2016, the government appointed Matthew Taylor, former policy chief to Tony Blair, and Chief Executive of the Royal Society of the Arts to lead a review of employment practices. Taylor has previously suggested improvements to zero-hours contracts including the payment of premium wages to zero-hours employees. As for the review, the deadline for the submission of evidence passed earlier this week, meaning that a final report shouldn’t be too far away. While the full results of the review have not yet been published, it is believed that Taylor will recommend a right for zero-hours employees to request fixed-hours contracts instead.

With such an emphasis on the negatives of zero-hours contracts, then, it may at first appear that the benefits are all one-sided, favouring only employers. While it is true that many employees prefer the certainty and security that zero-hours contracts simply can’t offer, there are those who like the flexibility that they provide. Indeed, according to a 2013 study (updated in 2015) by the Chartered Institute of Personnel Development, many zero-hours employees were happy with the arrangement and more content than their permanently-employed counterparts. Among the benefits, zero-hours contracts enable workers to take on a more diverse variety of work instead of being limited to one specialism or department. In other cases, they may facilitate a better work/life balance – ideal for those professionals that want to focus their energies on their families as well as their offices.

There is no question that zero-hours contracts have been used unfairly, and one may even be led to question whether their recent surge in popularity may have been buttressed by a government happy to see unemployment figures drop – even if the reality is that some of those who are “employed” have no work to do; but it is difficult to argue that the solution is simply to get rid of what can – when properly used – be a beneficial employment relationship for both employers and employees alike. What may be the better option for employers, then, is to offer employees a choice.

The future of the zero-hours contract may currently be a little uncertain; but for now at least, when used fairly and in the right circumstances, both employers and employees can benefit from their flexible nature. What’s more, thanks to the Small Business, Enterprise and Employment Act 2015, since 26th May 2015, exclusivity clauses in zero-hours contracts have been unenforceable, making them somewhat fairer than perhaps they once were.

To find out more about zero-hours contracts and to see whether they might have a place in your business, take a look at our Employment templates:

Zero Hours Contract
Zero Hours Policy
Zero Hours Employment Offer Letter
Casual Workers / Zero Hours Comparison

Does your business use zero-hours contracts? Perhaps you’re a professional that is on a zero-hours contract? We want to hear your thoughts. Not all zero-hours contracts deserve the bad rap, but with the election just around the corner, they’re in the spotlight again. Would you like to see them stick around as they are, reformed with restrictions designed to protect employees, or eliminated altogether?

Five Reasons Why Document Services Could be in Greater Demand Over the Next Few Months

UK businesses need access to a wide range of business documents throughout the year, but there are certain times when that need is greater than usual. Here we present five reasons why document services businesses may experience a surge in demand over the coming months.

#1 – Letters from HMRC

November 5th is the date from which employers will start receiving letters from the HMRC informing them of their obligations for filing tax documents for the 2012-2013 tax year. Though this is generally done using HMRC’s own forms and online systems, these letters also serve as a reminder to businesses that they need to get their financial records and other key business documents in order.

#2 – New hires for a new year

Many companies choose to recruit extra staff in January and February and for some this may push them from being a small firm to a larger one. In order to comply with employment law and keep their house in order they may then need a range of employment documents and legal contracts, from job application forms to equal opportunity policies.

#3 – Holidays

During December and January, many people choose to take additional holidays on top of their days off for Christmas and New Year. This extra demand for annual leave request forms and associated documents may provide a spur for businesses to acquire document templates to ease the workload.

#4 – Filing documents with Companies House

30th December is the date that limited companies are required to file their records with Companies House by for the year ending 31st March 2013. This may trigger a rise in demand for corporate document services.

#5 – New businesses

The beginning of a new year is a time when many people decide that it’s time to start a business. During this embryonic period, a wide range of document templates are needed.

SMEs Look Ahead to a Year of Growth

Small to medium-sized enterprises (SMEs) are anticipating a year of growth in 2014, according to figures from Yorkshire and Clydesdale Banks, with 97% – 4.5 million SMEs in total – planning to invest in growth. The statistics make for promising reading for the UK economy, with SMEs often described as the lifeblood of the nation’s business sector as a whole, and build on reports of substantial new companies being launched in 2013.

Earlier in 2013, Direct Line noted the number of Brits who were launching businesses of their own as a way of boosting their income from a day job – around 800,000 new launches in local areas throughout the UK in the first half of the year. The insurer’s research found that 36% of people undertake some activity to boost their primary income each month, even if it only involves selling items on online auction sites, and across the board they average annual earnings of over £2,500.

For those going the extra mile to launch a new business as their primary means of employment, having all of the right legal contracts in place could help to protect any additional income earned, as well as to ensure there can be no doubt about customers’ obligation to pay for work done.

Looking to the future

Looking ahead to 2014 and the Cydesdale/Yorkshire Bank report, it seems many businesses are likely to need further business documents in place to ensure the legality of new recruitment measures or other types of expansion. The survey found an almost unanimous 97% of SMEs plan to invest in some way in their own expansion in 2014, with 60% saying they are doing so to keep pace with growing demand, reversing the effects you might expect to see due to austerity measures.

A majority (57%) said they are taking an optimistic approach to investing, putting funds into their business as they hope to see growth over the coming 12 months – and a reassuring 43% said they currently perceive no barriers of any kind to their investment.

Promisingly, while many SME managers face the challenge of performing both their primary task and all of the necessary admin, the main barriers to investment that were identified by the survey did not relate to red tape or burdensome paperwork. Instead, one in four SMEs were worried about the availability of funding, and 18% said their largest current challenge is finding new customers.

 Again, for those whose customer base is growing rapidly, paper client contracts are one way to ensure that the level of service that is required is set out from the start, along with any specific rules regarding payment. SMEs venturing into employing a workforce for the first time, as their order books become overwhelming for an individual, should also ensure they have contracts of employment in place that spell out employees’ duties, any obligations regarding confidentiality of data, and potential grounds for dismissal.

With this kind of focus on any issues that arise during investment and expansion, SMEs can protect themselves against unwanted shocks, and give themselves the best possible chance of capitalising on the potential of the coming 12 months. In amongst all this enthusiasm for business and entrepreneurial spirit, the importance of getting the paperwork right must never be underestimated.

Why Job Application Forms Are the Best Option For Recruiting New Personnel

Recruiting new staff is an integral part of running a small business. Indeed, you cannot hope to operate a competitive business if you do not have the right personnel in key positions to help make good things happen.

Like most other employers in the UK, you may well see employment application forms as being an integral part of the recruitment process. The key strength of job application forms is that they don’t just furnish you with pertinent information about prospective employees; they enable you to view it in a truly uniform format. This means that you can compare and contrast candidates’ credentials completely impartially (this is nowhere near as easy to do when looking through CVs and cover letters).

Of course, this is not the only benefit. Indeed, relying on application forms to recruit new staff also affords employers one other key advantage – peace of mind.

The fact that employment application forms require applicants to sign a declaration that confirms all of the information they have provided is true is often very reassuring to potential employers. A signed declaration means that you have a document which can serve as evidence of the claims made by an employee or potential employee.

Any background checks via references can be very useful in this day and age, as the increasingly competitive nature of the job hunting market as well as the relative scarcity of jobs in some sectors is encouraging more and more applicants to be “flexible” with the details of their credentials and work history.

So, now that you know why application forms are the best option for recruiting new staff, you simply need to make sure you have some suitably comprehensive variants of your own to hand when you next need to fill a vacancy.

Fortunately this is very easy to achieve when you come to us here at Simply-Docs, as we have a wide array of employment application form templates available for you to download from the Employment Document Folder here on our website. These high-quality templates have been designed by expert legal teams and HR professionals so you can be sure they will capture all of the pertinent information which you, as an employer, need to garner from prospective employees. In addition, all of our application form templates are compliant with current employment legislation so you can rest assured that this element of the recruitment processes will adhere fully to the Equality Act 2010.

To find out more and view samples of our high-quality document templates and legal forms, simply take a few moments to browse our pages.

Why Your Fledgling Small Business Needs To Provide Comprehensive Employment Contracts

Running a small business isn’t for the faint hearted. Starting a fledgling enterprise from nothing and then developing it into a fully functional company that is profitable and competitive takes a huge amount of effort.

Of course, there are a lot of legal issues to consider when undertaking a task of this kind, so it is important to make yourself fully aware of any and all legal aspects which may affect the way your company operates.

Although there are a great deal of issues that will need your attention (company formation, insurance and health & safety, to name but a few), arguably the most important legal aspects of all are those which pertain to your employees. After all, if you aren’t able to recruit and retain personnel, your business prospects could be hindered.

As an employer, you are legally obliged to provide all of your employees with a “written statement of employment particulars” within two months of their start date. This statement can be included in an employment contract.

But how do you go about this exactly?

Well you could take the path which many people looking for a solution take these days and use an online search engine to find a website which will let you download employment contract templates for free. However, you need to be very careful when going down this route as many of these offerings will not cover particular aspects which you, as an employer, need to include in your contracts.

With this in mind you may well find it more beneficial to come to us here at Simply-Docs. Whilst our contracts, templates and other documents are not free to download, they are guaranteed to be fully compliant with the latest legislation and they should be comprehensive enough to meet your needs. In essence, this means that you will be able to provide your employees with legal contracts that will specify their exact duties and responsibilities. This is important as, unlike a generic contract, it will ensure each and every person working for you is 100 percent aware of what is expected of them.

All of our contracts and templates have been drafted by legal professionals who are experts in their fields so you can be sure that any documents you download from us will fully address the particular needs of the roles they represent, as well as reinforce the staff seniorities which are implicit in the titles of the contracts.

As well as our comprehensive employment contracts and templates, you may also find our Staff Handbook Policies to be an invaluable addition to your business as they can provide your company with employment policies and documents which will help to ensure your contracted staff members comply fully with your firm’s employment regulations and codes of conduct.

To find out more and view samples of our high-quality offerings in greater detail, simply take a few moments to browse our web pages.

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