Zero Hours Contracts

The Department for Business, Innovation and Skills has produced a guide for employers on zero-hour contracts. There is also guidance from ACAS.

The BIS guide explains how zero-hour contracts work, the difference between appropriate and inappropriate use of such arrangements, and gives guidance on best practice and alternatives to zero-hour contracts.

BIS says:

Zero hours contracts allow flexibility for both employers and individuals. However, they should not be considered as an alternative to proper business planning and should not be used as a permanent arrangement if it is not justifiable.”

Having contractors available for call–in is not a zero hours contract, if the contractor remains genuinely self-employed.

In contrast someone who is not self-employed will acquire employment rights as a ‘worker’, including the National Minimum Wage, protection from discrimination, rest breaks, annual leave, sick pay and pensions auto-enrollment.

If the arrangement is one under which they work regularly but do not work regular hours, they are likely to be an ‘employee’, with additional rights to a written statement of terms & conditions, holidays, holiday pay and in time protection against unfair dismissal or the right to a redundancy payment. This will apply where there is not a full week without work from Sunday to Saturday between the times they do work, but leaving that break will not necessarily be enough to prevent a ‘worker’  becoming an ’employee’.

Because ‘zero-hours contract’ is used to cover a wide range of situations, it is important for employers to ensure that written contracts contain provisions setting out the status, rights and obligations of their zero-hours staff. Having done that they must keep to those contracts, as otherwise they may find that a ‘worker’ has become an ’employee’. A court or employment tribunal will look at the reality of what happens not just what is written down.

It is important that employers and employees understand what they are doing. Not being clear can lead to disputes, disgruntlement and litigation. Employers may feel that claims from zero-hours staff will be deterred by the costs of paying the high fees to make a claim to an Employment Tribunal, but many claims can also be brought in the Small Claims Court, which is much cheaper.

We are pleased to store your Property Documents and / or Wills free of charge

If you have important documents that you would like to be securely stored by us free of charge, please telephone Dorothy Baker on 01749 674747 or by email to

You do not have to be an existing client of Harris & Harris to use this service, but we will need you to provide proof of identification.

We are a firm of solicitors regulated by the Solicitors Regulation Authority and maintain insurance which means that you can rest assured your documents will be safe and secure, and available if you need them.

Consumer Rights – 5 Alternative Dispute Resolution (ADR) Schemes

This is the last in our series of brief summaries of the changes in consumer protection law, highlighting their significance, and with links to further advice.   This is not intended to be legal advice upon which you should act, but awareness of issues which you need to consider. For legal advice please contact Neil Howlett or Andy Hambleton

Another change to consumer rights effective from 1st October 2015 simultaneously with the Consumer Rights Act is the requirement for all traders dealing with consumers to provide details of available ADR schemes.

Good Alternative Dispute Resolution (ADR) schemes can be very helpful, and many sectors and trade organisations offer them.  However, they tend to blur the distinction between consumers legal rights in contract law and their right to moan if their (unreasonable) expectations are not met.

ADR has been the flavour of the month with governments for many years.  Currently, the governments thinks that the eBay scheme is excellent (which may not be the experience everyone who has used it).

To comply with the EU directive on ADR which is intended to make online ADR available to all consumers traders will now be required to advise consumers about relevant ADR schemes if they cannot resolve their complaints.  Confusingly, the traders will not be required to participate in such ADR schemes unless there is an existing regulatory obligation to refer complaints to an ADR scheme or ombudsman, e.g., the Financial Conduct Authority for the financial services sector or the Legal Ombudsman for solicitors. If that applies your professional or trade body should have informed you.

See Business Companion – Alternative Dispute Resolution

Consumer Rights Act 2015 – 3 Consumer Notices & Unfair Terms

From 1st October 2015 there are fundamental changes to consumer rights introduced under the Consumer Rights Act 2015.  This Act replaces almost all existing consumer protection legislation.   It introduces significant new concepts and protections for consumers.  All businesses should be reviewing their Terms of Business for consumers, their procedures and staff training.

We are posting a series of brief summaries of the changes, highlighting their significance, and with links to further advice.   This is not intended to be legal advice upon which you should act, but awareness of issues which you need to consider.

See Consumer Rights Act 2015 – 1 All Change? and 2 Services & Digital Content

For legal advice please contact Neil Howlett or Andy Hambleton

The Consumer Rights Act will apply to all forms of contract.  Previously, obligations of fairness were restricted to contracts which were not individually negotiated.  The Consumer Rights Act’s test of fairness will apply to all contracts, including oral contracts.   It will be much more important for a trader to be able to prove on the balance of probabilities what they agreed to provide or do, and on what terms.  That will be a great deal easier if the terms are in writing and there is a copy signed by the consumer.

Consumer Notices & Pre-contractual statements

The Consumer Rights Act introduces a new concept of a Consumer Notice.  That is anything which sets out the rights or obligations of the trader and consumer or restricts the trader’s liability.   Anything in these will be subject to the same test of fairness as if they were set out in a trader’s Terms & Conditions.

This will apply to marketing communications, brochures, and signs at premises, all of which will be treated in the same way as if they were contract terms.

Anything said or written to a consumer about a service or trader, whether by or on behalf of the trader, will be treated as a term of the contract if the consumer takes it into account when deciding whether to enter into the contract, and when making any decision about the services after the contract is entered into.

This will make it a great deal easier for consumers to bring claims which would previously have had to be pursued under the complex law of Misrepresentation.

Unfair Terms

The Consumer Rights Act 2015 replaces the Unfair Contract Terms Act 1977 and the Unfair Terms in Consumer Contracts Regulations 1999 (though UCTA remains for B2B contracts).

All written terms of a consumer contract must be “transparent”, i.e. in plain and intelligible language, not using jargon the average consumer must be able to understand them. One ECJ decision said that it must enable the consumer “to evaluate, on the basis of clear, intelligible criteria, the economic consequences for him which derive from it”. Any ambiguity will be interpreted in favour of the consumer. In addition terms must be:-

  • Legible, if in writing, which means that they cannot be hidden away in small print
  • Prominent, which is a new definition, requiring that they are brought to the consumer’s attention in a way that an average consumer would become aware of them.  The average consumer is assumed to be reasonably well informed, observant and circumspect.  The more significant the term, or the closer to the boundary of fairness, the greater the obligation to make it prominent.

Although a term which is not “transparent” may still be enforceable it is more likely to fail the test of “fairness”.

The CRA does not apply to unwritten terms.  Although Sam Goldwyn was not precisely correct any trader seeking to rely upon verbal terms which are advantageous to them as against a consumer is going to be climbing Mount Everest.

A term is unfair if “contrary to the requirement of good faith it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer”.  Any attempt to limit or exclude liability is subject to review. In particular for:-

  • Breach of contract
  • Liability for injury or death not caused by negligence
  • Damage to property

There is a ‘black list’ of items that cannot be excluded.  Any attempt to exclude them will be ineffective.  They are:

  • Excluding liability for death or personal injury resulting from negligence
  • Excluding the statutory tests for conformity
  • Excluding liability for incorrect installation of goods
  • Excluding the obligation to provide services with reasonable skill and care.

There is an extended ‘grey list’ of terms which will be assumed to be unfair and therefore ineffective.  These include:-

  • Disproportionate charges if the consumer ends the contract.
  • Terms which allow the trader to change the characteristics of the Goods (or Services) after the consumer has become bound by the contract.
  • Terms which allow the trader to change the characteristics of the goods or services after the consumer has become bound by the contract.  There is an exception where there is a contract which is “indefinite” and where the trader gives reasonable notice and the consumer has the right to terminate the contract.
  • Terms where the trader can set the price after the consumer has become bound by the contract and has not agreed the price or method of determining the price.  The explanatory notes to the Act gives as an example of lack of prominence a low headline price with hidden extras in separate terms and conditions.

The grey list is not exclusive.  A Court could determine that any term is unfair against the statutory test.

Provisions excluding common law rights are possible but are likely to be subject to assessment against the grey list and the test of fairness.

Terms can be excluded from assessment against fairness if:-

  • They are the main subject matter of the contract, or
  • Terms that set the price; although price may be excluded, terms such as time and method of payment may still be subject to assessment against fairness.

Courts considering consumer contracts must consider the issue of fairness if there is sufficient legal and factual material available, even if it is not raised as an issue by the parties.  The introduction of an obligation of good faith is also a novel concept under English law.  Courts continue to be reluctant to apply it in commercial contracts.

Given the present pressures on the Court Service it seems unlikely that there will be legions of campaigning Judges going through the small print of every consumer contract which comes before them.  The danger is of Judges looking for ways to find in favour of consumers and that these issues will arise at a hearing without prior notice to a trader who is attempting to defend their position.

Useful guidance

Rules for the supply of goods: BIS’s Consumer Rights Act: Goods Guidance for Business 

Rules for the supply of services: BIS’s Consumer Rights Act: Services Guidance for Business

Rules for the supply of digital content: BIS’s Consumer Rights Act: Digital Content Guidance for Business

Unfair terms: The current guidance on unfair terms is CMA Unfair contract terms guidance: CMA37 This guidance makes reference to Annex A, which contains examples of terms which the CMA’s predecessor body, the Office of Fair Trading (OFT), required be withdrawn and substitutes which were accepted under the UTCCRs.  The CMA has not updated Annex A but has stated that it remains of substantial illustrative value.

Consumer Rights Act 2015 – 2 Services & Digital Content

From 1st October 2015 there are fundamental changes to consumer rights introduced under the Consumer Rights Act 2015.  This Act replaces almost all existing consumer protection legislation.   It introduces significant new concepts and protections for consumers.  All businesses should be reviewing their Terms of Business for consumers, their procedures and staff training.

We are posting a series of brief summaries of the changes, highlighting their significance, and with links to further advice.  This is not intended to be legal advice upon which you should act, but awareness of issues which you need to consider.

For legal advice please contact Neil Howlett or Andy Hambleton

The legal standards and remedies for Services

As with goods, there is no fundamental change in the test for the quality of services, which must be provided with “reasonable care and skill”.

However, there are new specific remedies for services

  • Not performed with reasonable care and skill
  • Not performed in line with information given about the service.
  • Not performed within a fixed time given by the trader or within a reasonable time.

If services are not performed within the fixed time or a reasonable time, the consumer can demand a price reduction but cannot demand performance.

Where services are not performed with reasonable care or skill or in line with information given about the service the consumer can require repeat performance at the trader’s expense.  This must be within a reasonable time and without significant inconvenience to the consumer.  The trader can only refuse if it is impossible to re-perform the service.

The consumer can claim a price reduction at the consumer’s option.  There is no guidance on how to calculate the price reduction, but the Act does state that it may be the full price.

Consumers still retain a residual right to claim damages at Common Law (and also but less likely for Specific Performance).  The consumer also has the right to terminate a contract if there is a fundamental breach at any time.

Traders will also have to take into account the rights of Consumers to use ADR schemes.

See Business Companion – Services

Digital Content

In addition to goods and services the Consumer Rights Act introduces new rights for consumers purchasing digital content (including where no payment is made by the consumer).

Traders are obliged to use a reasonable skill and care, i.e. not to allow an App to be released unless it has been fully tested.

Where digital content is non-conforming, applying the test for Goods, the Consumer has a right to repair, replacement, a price reduction or refund.  The Consumer cannot reject digital content because it cannot be returned.  Traders are entitled to more than one attempt at repair or replacement.

The major new risk for suppliers of digital content is that if a consumers device or other digital content is damaged as a result of the traders digital product being non-conforming the consumer will be entitled to the repair of the damaged caused or compensation.  As that may be difficult to calculate and may be substantial traders should consider the availability of insurance against this risk.

See Business Companion- Digital

Consumer Rights Act 2015 – 1 All Change?

From 1st October 2015 there are fundamental changes to consumer rights introduced under the Consumer Rights Act 2015.  This Act replaces almost all existing consumer protection legislation.   It introduces significant new concepts and protections for consumers.  All businesses should be reviewing their Terms of Business for consumers, their procedures and staff training.

We are posting a series of brief summaries of the changes, highlighting their significance, and with links to further advice.  This is not intended to be legal advice upon which you should act, but awareness of issues which you need to consider.

See the guidance issued by Business Companion – the sale and supply of goods from 1 October 2015.

For legal advice please contact Neil Howlett or Andy Hambleton

Goods & Services

Although there remains a distinction between Goods and Services any installation provided by the same trader will be treated as part of the provision of the goods, not as a separate service.   Whether the goods are compliant with the law will be assessed based upon their qualities once installed.

What is a Consumer?

Consumers must be individuals acting for purposes which are wholly or mainly outside their trade business craft or profession. This definition is wider in the UK than is required by the EU Directive or applies in most of the rest of the EU.

A Company, Partnership or LLP cannot be a consumer.  However, someone who works from home may be.  Where a trader is selling Goods or Services that may be used by individuals and for trade they will need to consider how much they ask to establish the status of the buyer or may want to assume that the other party is going to be a Consumer.  If a claim is made the trader might reasonably ask whether the “Consumer” has put the costs through their business accounts.

The legal standards for Goods?

The Consumer Rights Act broadly reproduces the existing implied terms from the Sale of Goods Act under which Goods must:-

  • be of satisfactory quality
  • be fit for purpose
  • match their description
  • match any sample

In addition, Goods must match any model seen or examined by the consumer (e.g. in a showroom).  The onus is on the trader to bring to the Consumer’s attention any differences between those and the Goods to be supplied.  General disclaimers are unlikely to be enough.  Traders will need to consider being able to prove exactly what was drawn to the consumer’s attention and that this was before the consumer entered into the contract.

 Consumer remedies for Goods not up to the standards

There is a new structured hierarchy of rights where goods are up to standard.  These are a great deal clearer than the previous law, which should make it more difficult for traders to fob off consumers and sit back hoping that they will not take matters further.

For many traders the new law will represent good commercial practice and for low value goods there may be no need to change practices other than making staff aware of the new deadlines.

Consumers still retain a residual right to claim damages at Common Law (and also but less likely for Specific Performance).  The consumer also has the right to terminate a contract if there is a fundamental breach at any time.

1. Short term right to reject.

If the goods are non-conforming the consumer can reject the goods within 30 days of transfer of ownership, delivery or installation the consumer will be entitled to a full refund without any deduction for usage.  Where goods are installed the short term right to reject does not apply.

The consumer has an option to agree to a repair or replacement.  If the consumer agrees either of these the period for rejection is paused for 7 days (or longer if that is required for repair or replacement).

2. Right to repair or replacement

After 30 days the consumer still has the right to require a repair or replacement (unless this would be impossible or the cost disproportionate to the value of the goods).  Traders cannot refuse a repair or replacement on the grounds that they are more expensive than the price reduction or refund that the consumer could claim.

Traders get one go at repair or replacement.  If the trader does not carry out the consumer’s chosen remedy the consumer can reject the goods.

There may be disputes where consumers want repairs but traders will want to replace goods (and seek compensation from their suppliers).  The burden is on the trader to demonstrate that the cost of repair is disproportionate.  For traders selling high value goods which may not immediately show defects, or where they have been used to trying tiered repair strategies will need to be aware of the right to reject if the first repair is unsuccessful.

3. Final right to reject or price reduction

If after repair or replacement the goods are still non-conforming, or cannot be repaired or replaced within a reasonable time, the consumer has a final right to reject the goods, return them to the trader and claim a refund.  If this is done within six months the trader cannot reduce the refund to reflect the use of the rejected goods (other than motor vehicles).  After that period the trader can make a reduction.  The alternative remedy is for the consumer to keep the goods and claim a price reduction, which could be the full price.

The amount of a price reduction will depend upon the circumstances and should reflect the difference between what the consumer paid for and what they received, considering the benefit that the consumer has rejected.

Context will be important and traders may have to take a pragmatic approach to the time and cost involved in precise calculation.

Point of sale information using very simple wording has been agreed by business and consumer groups. This is available on the Business Companion website with more guidance.

Specialist Solicitor Gains STEP Qualification

Harris & Harris are delighted to announce that Joshua Eva, Partner at our Wells office who specialises in private client matters, has been admitted as a full member of the Society of Trust and Estate Practitioners (“STEP”).  Joshua studied for the STEP Diploma in Trusts and Estates (England and Wales) and, having passed all his exams and exceeded the STEP requirements for minimum relevant experience, was admitted as a full member on 28th July 2015.

The Diploma qualification focused on four key areas of private client practice: Administration of Estates, Administration of Trusts, Taxation of Trusts and Estates, and Trust and Estate Accounting.  Joshua commented “Studying for the diploma has been both challenging and rewarding. The best thing about it has been the immediate positive impact on my expertise, as the content covered by the qualification is highly relevant to my day to day work”.

STEP is the worldwide professional association for those advising families across generations.  STEP members can advise from drafting a will, to protecting elderly or vulnerable relatives, to advising family businesses, to helping those with interests spread across the world.  The organisation promotes best practice, professional integrity and education of its members.

Annemarie Swainson, partner and head of Wills & Probate said “Joshua has worked very hard to gain this qualification, and we are all extremely proud of his achievement”.

Joshua’s profile can be found here:-

Joshua Eva

To find out more about STEP, click here:-



Read the Contract!

English Law can be a tough beast. Some European jurisdictions have an obligation on parties to act in “good faith”. English law has a longstanding rule “caveat emptor” – until 1998 when the Civil Procedure Rules banned the use of Latin – so let’s call it “Let the Buyer beware”. If you sign a contract you are bound by the terms, even if you haven’t read them. Where judges think that innocent people have been exploited they will strive to find a way to release them, but that isn’t always possible.

The Supreme Court has dismissed (by a majority of 4:1) the tenants’ appeal on the interpretation of a service charge clause in the tenants’ 99 year leases of chalets in a holiday park. The Court held that the natural meaning of the clause requiring the tenants to pay the service charge to the landlord was clear. The reasonable reader of the clause would understand that:

  • The first part of the clause required the tenants to pay an annual charge to reimburse the landlord for providing the services.
  • The second part of the clause identified how that service charge was to be calculated and that was a fixed sum which increased at a compound rate of 10% per annum.

The fact that this meant that by 2072 each tenant would be paying a service charge of over £550,000 per annum did not justify departing from the natural meaning of the clause. Therefore the court could not apply the power it has where a clause is ambiguous to apply a meaning that it thinks accords with business sense.

Commercial common sense is not a relevant consideration where the natural meaning of the language is clear, even if this results in commercially detrimental consequences. The court will not step in to save a party from a bad bargain.

Arnold v Britton and others [2015] UKSC 36

Doing Law Online

It can be convenient and easy to do things online.  However, it isn’t always the most prudent way to do things, and can make it easier to defraud or exploit the vulnerable.

In August 2014 the government shelved plans to create a fully online process for creating Lasting Powers of Attorney (LPAs) including electronic signatures, in light of concerns that such a system would increase the scope for fraud and financial abuse, and would not be suitable for the elderly. In many cases the best way to protect the person making the LPA is to get specialist advice to ensure that an LPA is both appropriate and effective.

Recently the Court of Protection revoked an LPA made without such advice, which was drawn up by the 77 year old donor’s daughter online and appointed the daughter as sole attorney.  The donor, who suffered from Alzheimer’s disease, did not receive any independent advice, although her daughter claimed to have fully explained the document to her before she signed it, which seems unlikely as she admitted she hadn’t read it.  A friend of the family witnessed the mother’s signature.

Six months after the LPA was registered, the Office of the Public Guardian made its application to the Court of Protection on the basis of evidence indicating that there had been a number of excessive and uncharacteristic withdrawals from the mother’s bank account, reducing its value by half over the six months.  The daughter admitted that she had not read the declaration about her duties in the prescribed form of LPA (who reads terms & conditions online?). She claimed that she gave her mother £600 a month “spending money”, but the judge found that the mother was living in squalor.  Her home urgently needed deep cleaning, disinfecting and furnishing with white goods.  When questioned about the withdrawals from her mother’s account, the daughter’s response was “there is no point in her being the wealthiest woman in the graveyard”.  The case doesn’t report whether any of the money which had been taken was recovered.

The judge decided that the daughter had behaved in a way which contravened her authority and was not in her mother’s best interests.  The LPA was revoked and the local authority was appointed as deputy to manage the mother’s property and financial affairs.  This wouldn’t have been the donor’s wish when the LPA was made.  If the attorney had read the terms of the appointment she might have understood her responsibilities and carried them out appropriately.

At Harris + Harris we aim to help you make the right decisions, at the right time. We have experienced solicitors in both our Wells and Frome offices who can make sure your LPA has the effect you intend, and your wishes are carried out.

Contact Annemarie Swainson or Joshua Eva in Wells or Caroline Fletcher in Frome.

Holiday Pay – is it such a big deal?

There has been lots in the press about the Employment Appeal Tribunal (EAT) decision on holiday pay.  The EAT decided that non-guaranteed overtime which the employee is contractually bound to perform if asked must be taken into account.

This is not a great surprise.  It is in accordance with the intention of the original EC Directive that the workers should not suffer any detriment by taking holiday.  Indeed the conclusion of the EAT can be reduced to the very simple proposition – “‘Normal pay’ is that which is normally received.”

This also applies to taxable travel time payments in excess of the actual expenses incurred.  Guaranteed overtime was already to be included.  Overtime which the worker requests but is not contractually obliged to do will not.

This only matters for holiday pay calculated for the 4 weeks holiday which is covered by the Working Time regulations.  The additional 1.6 weeks holiday which makes up the statutory holiday in Britain, or any additional contractual holiday are not covered.

On a procedural point the EAT decided that as claims to the Employment tribunal will be for “unlawful deduction from wages” a claim can only be brought if the employee has taken holiday within the last 3 months, and then only for previous holidays if there has not been a break of more than three months between them.  This limits the extent of claims via the ET.

It is highly unlikely that the EAT’s decision will be the last word on this issue.  Leave to Appeal to the Court of Appeal has been given, and after that there is still the Supreme Court.  The government intervened and sent a QC to argue against the propositions accepted by the EAT.  BIS has already set up a Task Force, containing only employers organisations, to “assess the possible impact”, though a tweet from BIS put the purpose rather differently – “limiting the impact”.

This one will run and run. Expect lots of anti EU rhetoric, and possibly unsolicited calls from claims companies.  If you are an employee who may have lost a substantial amount you should get advice and start a claim within 3 months of your last deduction, but expect that to be stayed until there is a final decision on this case, which could be another year.  If you are employer you may want to calculate the potential value of claims and make provision for them.  Employers may also want to review their contracts to see if they can be changed.

For advice on Employment Law contact:

Neil Howlett

Andy Hambleton