Swindon & Wiltshire Business News

Expert opinion: How to handle notice periods – part 2

Mark EmeryBefore Christmas, we discussed notice periods, setting out some basic principles on how to handle an employee’s resignation and how to terminate an employee’s role.

In this part 2, we focus on payments in lieu of notice – or as they are more commonly known, ‘PILONS’, drawing on some points from the case of Société Générale, London Branch v Geys (“Geys”).

PILONs can be tricky. Some employment contracts contain a clause (the PILON) which enables an employer to terminate the employee’s role immediately and pay their notice pay as a lump sum.

However, if an employer makes a PILON and it doesn’t have the contractual right to do so, this will amount to a repudiatory breach of contract on the part of the employer.

A repudiatory breach means that the employee has two options – accept the breach and end the contract, or ignore the breach and continue with the contract. If the employee accepts the breach and ends the contract, the employer can no longer rely on any terms of the employment contract.

Getting it wrong can therefore have important implications potentially freeing employees from post-termination restrictions and leaving it open for them to claim breach of contract.

As a brief overview, Mr Geys was dismissed by Société Générale, who chose to terminate his employment by exercising the PILON in his contract.

However, Société failed to exercise the PILON correctly in accordance with his contract.

Here the arrangement with Mr Geys was that his termination date would be effective as soon as the PILON was paid to him and not on the date he was told that Société would be exercising the PILON (his contract allowed for the latter). This amounted to three weeks difference.

Geys also confirmed that a repudiatory breach does not automatically terminate the employment contract; rather the employment contract will only be brought to an end if the innocent party accepts the breach and communicates that he or she no longer wishes to continue with the contract.

In this case the employee did not accept the breach – and as a consequence the employer could not rely on its restrictive covenants in the contract.

For employers, the decision in Geys still has many implications and still leaves many questions unresolved about PILONs. But, to minimise the risk of unforeseen consequences, employers should ensure they:

• Check the terms of their contracts, including any contractual policies, to ensure that the mechanics for giving notice are observed.
• Where an employer decides to exercise a contractual right to terminate an employee’s employment by making a PILON, they should make it clear that they are exercising the right to make a PILON in accordance with their contract.
• If an employee ever challenges whether they have been given notice correctly, as Mr Geys did, it is important to see whether there is any merit in the employee’s argument, so we would encourage you to take legal advice.

Mark Emery is an employment specialist working with businesses, charities and individuals, providing advice on all HR and employment-related issues and acting on behalf of employers and individuals if disputes reach tribunal or court. Contact him on 01865 268 663.

Part 1 of this advice column was published on November 28. You can read it here.

Private client and charities expert joins Withy King

Samantha O'SullivanA solicitor with over 25 years’ experience in private client and charity law work has joined Wiltshire law firm Withy King as a consultant.

Samantha O’Sullivan, who was a partner at Mogers before joining Withy King’s expanding private client practice based in Swindon and Marlborough, advises individuals and families on a wide range of issues.

These include estate and tax planning often involving the use of trusts and tax-efficient Wills, inheritance tax and capital gains tax and the formation and winding-up of trusts.

She also works closely with charities, advising on formations and restructuring as well as their dealings with the Charity Commission.

Commenting on her role, Samantha said: “Private Client work has always interested me and I particularly enjoy the intellectual challenge of solving people’s problems. Estate planning and wealth preservation is always about more than the person sitting in front of me.

“I look at families as a whole, across the generations, thinking about the future, as well as what’s happening now. A key part of my job is cutting through the legalese and making sure my clients understand what’s being suggested.

“I know I’ve done my job properly when my clients know exactly how a legal solution will help them."

As well as advising trustees and beneficiaries, Samantha is a trustee of a number of charities herself, including DEVELOP, a charity offering advice and support to other charities and not-for profit organisations across Wiltshire, Combe Down Holiday Trust which provides advice and holiday grants to individuals in B&NES, Collins Educational Trust, Sarum St Michael Educational Trust and the Eva Crane Trust, which provide educational grants and assistance to individuals and organisations nationally and internationally.

Samantha’s appointment follows the recent recruitment of Ed Vidnes, who joined Withy King’s private client team as an Associate from Burningham & Brown, and Becky Ricards-Small, who was previously a partner at Thrings.

Find out how to do business with Council

Wiltshire CouncilSuppliers and service providers who want to do business with Wiltshire Council can find out more at a free Procurement Workshop next month.

The workshop, on Tuesday, February 25, will cover the procurement process, what is expected of the council when it runs procurements as a public organisation, how it runs procurements, and what the council expects from bidders.

The workshop, which runs from 10am to 1pm at City Hall, Salisbury will be led by the Procurement Team and will be followed by a Q&A session and a light networking lunch.

To reserve a place, email This email address is being protected from spambots. You need JavaScript enabled to view it. by Friday, February 14.

Innovative Swindon ranked UK #2 for creating patents

Centre for CitiesSwindon is ranked second only to Cambridge for creating patents, according to a major new report.

The Centre for Cities’ Cities Outlook 2014, the annual health check of UK cities, made headlines when it warned that the economic recovery was benefiting London far more than the rest of the nation, with 80 percent of national private sector jobs growth concentrated on the Capital.

But buried in the detail of the report was the news that Swindon registered the second highest number of patents in the UK - almost 20 patents per 100,000 head of population.

The statistic suggests that Swindon beats local rival Bristol (ranked 7th, at eight patents per 100,000 people) hands down. However, the town has a long way to go to catch up with Cambridge, which registers a whopping 69 patents per 100,000 people.

Further number-crunching reveals:

  • Swindon has a lower-than-average rate for business start-ups (37.5 per 10,000 head of population) against a national average of 42
  • Swindon has a slightly higher than average skilled workforce. Nine percent of workers have no formal qualifications, compared to nearly 10 as a UK average.
  • The employment rate is slightly higher than average - with 73.5 percent of the population in work, compared to a UK average of 71 (July 2012 - June 2013)
  • At £477, weekly average earnings (2013) were the highest in the South West (beating Bristol, Bournemouth, Plymouth and Gloucester), but were lower than the UK average of £502.20 per week.

For the full report, visit http://citiesoutlook.org/summary/swindon

First Aid - are you up to date?

Nigel Inseal of EFA TrainingFirst Aid – Are you up-to-date & compliant? will be the question posed by Nigel Inseal of EFA Training at a networking event in Westbury.

The Wessex Networking Breakfast will be held at Player’s at the West Wilts Trading Estate from 7am until 9am on Tuesday, February 11.

Attendance costs £12 for members and £40 for non-members. To find out more, or to book a place, log on to http://www.wessexchambers.org.uk/events

Office and industrial space in Swindon at a five year low

James Gregory of Alder KingOffice and industrial space in Swindon is at a five year low as the economy bounces back, according to report by commercial property consultants Alder King.

The Market Monitor report suggests that in line with other large towns and cities in the South West, Swindon is experiencing a five year low in accommodation supply, meaning businesses looking to grow or relocate have nowhere to go.

The report shows that following a 2010 high for demand for office space (205,000 sq ft), demand plummeted to 85,000 sq ft in 2011. This has been gradually rising, and in 2013 was back to 199,000 sq ft.

However, over the same period supply began to fall - from 1,320,000 sq ft in 2011 to just 1,020,000 sq feet in 2013.

Meanwhile rents in the office sector have risen slightly from their 2011 low. Headline rent per sq ft is now £15 in the town centre, and £17.50 out of town, up from £16 per sq ft in 2012.

“There was a gradual reduction in good quality accommodation with no brand new office space currently available out of town, and no speculative development,” noted the report’s author, James Gregory.

In the industrial sector, meanwhile, supply fell from a 2011 peak of 2,625,000 sq ft to 1,800,000 sq ft. But demand also fell, from 1,823,000 sq ft in 2011 to 986,000 sq ft in 2013.

Rents stayed steady. For the fifth year in a row the average rent per sq ft was £6.75.

“There is now a real shortage of large buildings available for immediate occupation with the need to bring forward deliverable development becoming urgent,” noted James. “There are very few good quality opportunities for the mid-range occupier, and the supply of all sizes has steadily been eroded.”

The full report is available to download at http://www.alderking.com/media/121375/FINAL-Market-Monitor-2014-Web.pdf

Wiltshire learning and development firm set to break into China

Malcolm Miller of The rts GroupA Chippenham-based learning and development agency, which already trades across Europe, South Africa and the Middle East, is about to break into China thanks to a growing demand for UK expertise in the automotive finance sector.

The rts Group specialises in helping automotive manufacturers develop frontline staff working in their dealerships, and its clients include Ford, Mazda, Mercedes-Benz and Toyota.

One arm of the group – FIMTRAC – focusses on vehicle finance, and it is this area of expertise in particular which is seeing growing demand overseas.

“We really are working in global marketplace now, but while in the UK vehicle financing is well-developed and established this isn’t the case in the developing markets,” said rts group managing director Malcolm Miller.

“In growing automotive markets, manufacturers are finding that the dealerships’ customer-facing staff don’t have the expertise in vehicle financing to meet the opportunities presented.

“Point of sale finance is a way to help manufacturers engender customer loyalty leading to repeat business, and is also a vital tool in trade cycle management.

"Through FIMTRAC, we are the acknowledged experts in this area and at the same time are also able to ensure our clients are up-to-date with current legislation and so remain compliant.”

rts has been working in South Africa for manufacturers developing programmes for dealership staff to increase finance penetration at point of sale.

Now a number of manufacturers have asked the company to repeat this successful model in China. A team from rts will be visiting China next month to help forge links with dealerships and with the trainers who will deliver their programmes locally.

Globally, the vehicle sales market is seeing a resurgence. Just last week, figures from the Society of Motor Manufacturers and Traders revealed that UK sales for 2013 were their best since 2007, with 2.26 million vehicles registered in 2013 – a 10.8 per cent rise on 2012.

Three-quarters of sales to private buyers now involve some kind of financing package.

Malcolm said: “Now is a great time to seize the opportunity we have to extend both our client base and our geographical reach.

"We’re very excited about this opportunity in China which we are sure will be as successful as the programmes we have been running in South Africa.”

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