Employment Law Update

1) Increase in Annual Leave Entitlement

The DTI has recently announced an increase in minimum holiday entitlement under the Working Time Regulation 1998 from 20 days to 28 days per annum.

Some employers currently include the eight bank holidays as part of workers' 20-day annual leave entitlement. This change effectively requires them to add the eight bank holidays to the 20-day annual leave entitlement. The DTI estimates that 6 million workers will benefit from this change. Statutory annual leave entitlement will be increased in two stages, rising from 20 to 24 days on 1st October 2007, and from 24 to 28 days on 1st October 2008. There is to be a second round of public consultation, closing on 13th April 2007, on the implementation of these changes.

We are co-ordinating responses for clients. If you would like us to include your comments please email Alison.Hazlehurst@brabnerscs.com

Practical Tip

If you currently include Bank Holidays in the calculation of minimum holiday entitlement you will need to prepare for this change. To ensure proper compliance you will need to review work rotas, possibly recruit to cover the additional days and amend your employment contracts and holiday arrangements.

If you require any specific advice in connection with the material contained in this bulletin, or on any other Employment Law issues, please contact a member of the Employment Team on 0151 600 3000.

2) The New Companies Act 2006

REDUCING THE RED TAPE TANGLE
The New Act making business easier for small companies

The North West has a long-established track record in producing successful entrepreneurs. Many businesses have started as a single person with a vision and the energy - and good fortune - to bring it to fruition.

For some time, however, small businesses have argued that their attempts to develop have been hamstrung by red tape. Business leaders estimate that they contribute a large chunk of the £340 million spent nationally each year on company administration and compliance costs. That situation could be about to change for the better.

This year sees the start of a gradual phasing in of new regulations as part of the Companies Act. Historically, company law has been based on the premise of all firms adhering to the fine detail of administration regardless of their size.

Put on the statute book last year, the Act is based on a philosophy of "think small first". Ministers have promised that the new Act will reduce the bureaucratic burden on firms by simplifying the make-up of SMEs and the processes by which they hold meetings, appoint directors or manage essential data.

All told, it's arguably the most significant shift in company law in the last 150 years.

The benefits will be introduced gradually from the early part of the year. The transition means many firms will doubtless require guidance from advisers such as ourselves as they come to terms with what differences have been enacted but the changes may well provide another spur for the growth prospects of vibrant firms in this region.

For more information about this article, please contact Denise Walker, Head of Corporate on 0151 600 3000 or email denise.walker@brabnerscs.com