Monday, 31 January 2011

Don't let debtors off the hook

Shropshire companies should not have to grin and bear it when it comes to clients stalling over paying their bills.

That's the message from our senior partner, Graham Davies, who said: "We've all encountered clients and customers who try to use delaying tactics when it comes to paying for work that's already been carried out.

"One of the most common tactics is to send a cheque for less than the amount that's owed, as they know it will cost you time and money to chase the balance. And sometimes this payment may be accompanied by a letter that says the amount is 'in full and final settlement'.

"Don't be afraid to bank the part-payment as soon as you receive it, as this will not jeopardise your right to receive the full amount.

"As long as there is no dispute over the amount that's owed, companies have every right to bank the interim cheque and demand the outstanding balance within seven days. You can also point out that if it's not received, further court action will automatically follow.

"But if there is a dispute, you need to take greater care, even if you believe the dispute is unwarranted."

Graham said if a cheque had been sent "in full and final settlement" in a case where the amount is disputed, the safest action would be to return the cheque, including a covering letter that answers the issues raised and requesting payment of the full balance as soon as possible.

"To minimise any future problems if you do cash the cheque, you should write to the debtor immediately to inform them you don't accept it as 'full and final settlement', and that you consider it a part-payment with the balance to follow.

"And don't waste time debating what action to take - the longer you wait, the more likely it is that the courts will say you have shown a strong indication that you're happy to accept the lower offer."

Thursday, 20 January 2011

Who pays the price?

Shropshire company car drivers could have parking fines deducted directly from their wages, our Employment Law specialist has warned.

John Mehtam said employees who picked up a fine while on work-related business may believe the company should foot the bill.

"But if your staff contracts have been prepared to include a specific clause, you can take the money out of their next salary payment. You do have to ensure though that the clause is clear and states that you will deduct any parking fines from their wages - if the contract doesn't say that, you can't take any money at all from the employee."

John said the contract must specifically state each kind of incident where the company reserved the right to make a deduction.

"As well as parking or speeding fines, which may occur in and out of working time, you might want to make reference to any overpayment of wages, and damage caused to company property by a staff member or someone from their family. And to deter employees from risking parking and other fines at all, you can impose an administrative charge through their contracts.

"You need to add a clause that says you reserve the right to apply an administrative charge to cover the costs of dealing with any fine, charge or penalty - and if you set it at a reasonable figure, it's more likely to be accepted by a tribunal as a fair term."

John said if your staff contracts did not include permission to deduct fines from salary payments, a company could still agree with the employee that they were personally liable - but written permission would be needed before any money is taken.

"And if the employee refuses to cover the costs, make it clear to them that any further parking tickets will lead to tough disciplinary action."

Friday, 7 January 2011

School closures hit business

Shropshire parents who face unexpected school closures due to adverse weather conditions may have to take unpaid leave to care for their children.

Emma Palmer, from our Alpha Team, said the difficult weather had already caused problems this year with schools being shut at short notice.

"Many companies will have received calls from employees who say they can't come into work because their child's school is closed. But even though this is obviously a difficult situation, the employee is not just automatically entitled to take the time off on full pay.

"You can ask them to take the time off as annual leave - but they may not have any leave left, or they may not want to use their holiday entitlement in this way. In these circumstances, parents do have the statutory right to take dependants' leave, which is also known as emergency leave.

"But they should be aware you are not required to pay them during the time they're away from the workplace. This kind of leave is also only designed to let them put alternative care arrangements in place - so if the school is closed for a whole week, they can't take it all as dependants' leave.

"It's a system that's been set up to cover one or two days' leave at most, so it's vital you don't allow anyone to abuse the policy."