In our article on Pre-Nuptial Agreements of July last year we reported a Court of Appeal decision which may serve to increase the possibility of Pre-Nuptial Agreements being enforced by the Courts on subsequent divorce/dissolution of civil partnership of the parties.
Pre-Nuptial contracts are agreements couples enter into before marriage/civil partnership in an attempt to agree how assets should be divided in the event of their divorce/dissolution of civil partnership.
Post-Nuptial Agreements are agreements parties enter into after their marriage/civil partnership governing future arrangements for their marriage/civil partnership.
The decision of MacLeod v MacLeod  1 FLR 641 makes it clear that there is nothing to prevent a married couple from entering into financial arrangements governing their life together by entering into a Deed governing their future rights in the event that the marriage should fail. Presumably therefore by the same token the Courts would adopt the same approach for partners in a civil partnership.
The MacLeod case concerned a couple who entered into a Pre-Nuptial Agreement before their marriage and then a Post-Nuptial Agreement after their marriage confirming that they still intended to be bound by the Pre-Nuptial Agreement subject to certain variations.
Whilst this area of law is by no means certain there is a clear move towards the English Courts allowing couples to make their own decisions regarding the division of assets on separation.
For more information contact Anita Toal of our Family Team.
Landmark Decision Pre-nuptial Agreements/ New Law
Prenuptial contracts are agreements couples enter into before marriage in an attempt to agree how assets should be divided in the event of their divorce. Strictly speaking such contracts are not absolutely enforceable in English Law
However, in a landmark decision yesterday (02.07.09) the Court of Appeal rewrote the divorce laws to give resounding backing to prenuptial contracts. Lord Justice Thorpe said that any rule that prenuptial contracts are void seemed to be ‘increasingly unrealistic’
This decision effectively reverses the law to date which dictates that on a divorce, the court has ultimate jurisdiction to divide the assets of the marriage as it sees fit according to what is reasonable in the circumstances of each individual case. This meant that a court could ignore a prenuptial contract entered into by the couple before the marriage in which they agreed ‘who should have what’ in the event of their divorce. There has been no guarantee to date therefore that a court would enforce the terms of a prenuptial agreement. Prenuptial agreements that have been successfully enforced to date have usually been in cases where the marriage survives for only a short period of time and where there are no children. This latest case however suggests that couples may now stand a better chance of agreeing how their assets should be divided in the event of divorce to create greater certainty for both parties.
Only time will tell whether the decision will be overturned by the House of Lords or whether the courts will, in the future, seek to limit the circumstances in which such agreements are binding but clearly there appears to have been something of a sea change in the attitude of the courts in this area.
For more information contact Anita Toal of our Family Team
The recent case of AVH v SI and Another  EWHC 2938 (Fam) highlights the principles to be considered by the court when deciding whether, on the application of a parent, a child should be returned to a different jurisdiction.
The case concerned a 15 year old child who had been living with her mother in Mexico since the separation of her parents in 2010. In 2014 the child visited friends in London albeit unbeknown to her mother went to visit her father. At the time of the hearing the child was living with her father and the mother made an application for return of the child to Mexico.
It was held by the court that the retention of the child in the UK was wrongful and Article 12 of the Hague Convention required the court to order the return of the child forthwith to Mexico.
While the child wished to remain in the UK and the court had to take her views into account this merely gave the court discretion to consider whether or not to return. However, the court had to consider the child’s views in the context of the strength, conviction and rationality of those views and in the particular circumstances of the case the court ordered the return of the child to Mexico.
Mums and Dads to Share Parental Leave
In November 2012 Deputy Prime Minister, Nick Clegg announced that from 2015 the UK will have a new system of flexible parental leave. The changes will allow both parents to share up to a year’s leave to look after their new-born children, allowing fathers to play a greater role in raising their children and helping mothers to return to work at a time that’s right for them.
Under the new radical system of parental leave, parents will be able to choose how they share the care of their children in the first year after birth. Employed mothers will still be entitled to 52 weeks of Maternity Leave, but working parents will be able to opt to share the leave. Mothers will still have to take at least the initial 2 weeks of leave after birth as a recovery period, but following that they can choose to end the Maternity Leave and the parents can opt to share the remaining leave as flexible parental leave. It will be up to the parents to decide how they share the remaining weeks of the leave.
Obviously each parent will have to meet the qualifying criteria for leave and/or pay in their own right. The qualifying criteria is likely to mirror the current requirements of statutory maternity and paternity pay.
It is believed that the greater flexibility for parents will provide a more motivated and productive work force for businesses.
The Government also announced plans to extend the right to request flexible working to all employees, not just employees with a child under 17 (or under 18 if the child is disabled) so to again give greater choice and freedom to workers and businesses.
The current statutory procedure for considering requests will be removed, and instead employers will have a duty to consider all requests in a reasonable manner and within a reasonable period of time. Businesses can still refuse requests on business grounds but the Government believes that these new laws will bring benefits to employers as well as to their staff.
These changes and the right to request flexible working are likely to be introduced in 2014.
Daven Naghen of our Employment Team commented as follows:-
“I can see the obvious benefit to working parents but I am not so sure that these two sets of proposals are as advantageous to businesses as Mr Clegg thinks. From my experience there are plenty of businesses already who have difficulties managing the current working patterns of their staff under the current regime, and adding more flexibility for staff could be a real headache to businesses and may involve greater administration and cost for businesses.”
If your business needs help on any current issues relating to flexible working for staff or parental leave then please contact Daven Naghen on 01775 722261 or email firstname.lastname@example.org or Gemma Mayer on 01775 722261 or email email@example.com
A Summary of Maternity Leave
The most common area for enquiries on employment law from our clients relates to maternity leave. I have written this overview to assist our clients in having a general understanding of the law on maternity leave.
Types of Maternity Leave
There are 3 types of maternity leave as follows:-
i) Ordinary Maternity Leave (“OML”)
ii) Additional Maternity Leave (“AML”)
iii) Compulsory Maternity Leave (“CML”).
This lasts up to 26 weeks or until the end of CML, if later. OML can start at any time from 11 weeks before the week the baby is due. An employee who is eligible for OML is also entitled to CML.
AML lasts up to 26 weeks. AML starts on the day after the last day of OML. Entitlement to AML depends on the employee’s expected week of childbirth.
In addition to OML and AML, there is also CML which is required essentially as a health and safety measure. An employer must not permit an employee who is entitled to OML to work during the period of 2 weeks (extended to 4 weeks for some factory/workshop workers) commencing with the day on which childbirth occurs. An employer who does so is guilty of an offence and is liable on summary conviction to a fine.
All employees are entitled to both OML and AML, together totalling 52 weeks’ leave, provided they satisfy certain notice requirements.
A woman must still be employed by the relevant employer at the point when she commences statutory maternity leave from that employment; indeed if she were not employed at that point there would be no employment from which to take leave. This contrasts with the position in relation to entitlement to statutory maternity pay (“SMP”). Once an employee qualifies to receive SMP from a given employer, she will not lose that entitlement even if she ceases to be employed by it (and even if that employment ceases before the period during which she is to receive SMP payments commences).
In order to take maternity leave an employee has to give notice to her employer on or before the 15th week before the week that she expects her baby to be born. The notice must state that she is pregnant, the week that her baby is due and the week that she plans to start her OML.
If the employer asks for proof of pregnancy, then she has to provide a medical certificate.
Within 28 days of receiving notice that an employee intends to take maternity leave, the employer must write back informing her of her expected date of return from either OML or from AML if she is entitled to it.
If the employer fails to provide this information then the employee may be entitled to return to work early without giving the requisite notice and be protected from detriment for failing to return to work on what otherwise would be her return date.
Starting maternity leave
OML can start at any time from 11 weeks before the week the baby is due.
The employee needs to give notice of when she wants to start the leave, but she can change her mind as long as she gives at least 28 days’ notice of the change. In rare circumstances, where it is not reasonably practicable to give 28 days’ notice, she may be able to change her mind even later than this but should give notice as soon as it is reasonably practicable to do so.
If the baby is born early, OML starts automatically on the date of the birth.
If the employee is entitled to AML, it starts on the day after the last day of the employee’s OML.
Premature babies and stillbirth
If the baby is born early then the employee does not have to give notice of her intended leave date but should inform her employer as soon as possible after the birth that she is starting maternity leave. If she loses the baby after 24 or more weeks of pregnancy, or if the baby is stillborn, she is still entitled to maternity leave. There is no need to notify her employer of the intended leave date, but she should tell her employer as soon as possible after the baby is lost that she is starting maternity leave.
Illness in late pregnancy
If the employee is absent from work in the last 4 weeks before her baby is due for reasons related to the pregnancy or childbirth, she has to inform her employer that the absence is pregnancy-related. This is important because if she does go off sick in this period her maternity leave starts automatically from the date of her first absence. If her absence is not related to pregnancy or childbirth then her maternity leave will not start automatically.
Rights during OML and AML
An employee who takes OML or AML is entitled to the benefit of all the terms and conditions of employment that would have applied had she not been absent, with the exception of wages or salary. The obligations during maternity leave apply both ways so that employees can continue to have contractual obligations to their employer during maternity leave such as trust and confidence and fidelity.
The employer must therefore continue to provide all contractual and discretionary benefits during maternity leave but need not pay anything which constitutes wages or salary which would include overtime, shift pay or attendance allowance.
For example an employee would therefore be entitled to continue to receive (provided she was entitled to them before she want on maternity leave) things such as life insurance, permanent health insurance, medical cover and gym membership.
Employment terms and conditions with no personal benefit
When an employer normally provides an asset or facility to an employee from which that employee derives no personal benefit, it is probably the case the employer is not required to continue to provide it during maternity leave. For example in respect of the provision of a company vehicle which is solely for work use or the provision of a mobile phone which may only be used to make or receive work calls.
Where the employee is entitled to some personal use of the assets/ facility, the employee clearly derives a benefit from it and hence the employer is required to continue to provide it throughout maternity leave. For example if a company car or mobile telephone can be used partly or even exclusively for non-work activities then the employee must continue to be given the benefit during OML and AML.
The issue as to whether or not an employer must during maternity leave continue to provide childcare vouchers is a tricky subject. This is because it is debatable in most circumstances as to whether childcare vouchers are a personal benefit (which should be continued during maternity leave) or part of wages (which do not have to be continued during maternity leave).
Pension contributions and certain other benefits during maternity leave
A maternity equality rule is implied into all occupational pension schemes (see definition below). This means that any period when an employee is on maternity leave should be treated as a time when she is not, in particular in relation to any rule of an occupational pension scheme which can be applied in respect of scheme membership, accrual of scheme rights and determination of benefits.
Similar provisions apply in relation to any discretion under scheme rules which can be exercised in a way that treats a period of maternity leave differently from time when a woman is not on maternity leave.
During any period of maternity leave the employer must continue to make its usual contributions to the pension scheme, the employer’s pension contributions must be calculated on the basis of the employee’s normal pay (i.e. the pay she would be receiving if she was at work), the employee’s pension contributions must be calculated on the basis of the pay she is actually receiving (i.e. SMP) and the employee’s service must count as pensionable service for a final salary (defined benefit) pension scheme.
A woman who is on maternity leave will be entitled to continuing membership of the scheme throughout the period of maternity leave whether or not she is paid.
These provisions do not apply to the accrual of scheme rights whilst the employee is on AML and is not being paid by her employer.
The reference to “paid by her employer” includes any time when the employee is receiving statutory maternity pay (“SMP”) or other pay (e.g. contractual maternity pay, including payment for “keeping in touch” days). For SMP this will usually be a period of up to 39 weeks.
The definition of occupational pension scheme under the Equality Act 2010 is relatively wide and probably means that the employer must also continue to provide life insurance, health insurance, medical cover and permanent health insurance during paid maternity leave.
Holiday entitlement during maternity leave
As with other terms and conditions employees will continue to accrue holiday entitlement during OML and AML.
Work during maternity leave
Employees are entitled (but not obliged) to work up to 10 days (“keeping in touch days”) during their maternity leave without bringing their maternity leave to an end.
Bonus entitlement and maternity leave
Complex statutory provisions from the Equality Act 2010 apply to protect the position of pregnant women and those on, or who have taken, maternity leave, in relation to their contractual pay including bonuses. Protection for such workers in respect of non-contractual, discretionary benefits (such as truly discretionary bonus scheme) is provided by the prohibited conduct provisions of the Equality Act 2010.
In order to quality for SMP the woman needs to be an employee as defined and satisfy the following:-
i) she must have been employed for a continuous period of 26 weeks ending with the week immediately preceding the 14th week before the expected week of confinement/childbirth (“EWC”);
ii) she must have average earnings for the period of 8 weeks ending with the week immediately preceding the 14th week before EWC of not less than the lower earnings limit in force (currently £112 per week with effect from the 6th April 2015;
iii) she must have become pregnant and have reached, or given birth before reaching the commencement of the 11th week before EWC
iv) she must give the requisite notice to the employer of when she expects his liability to pay her SMP to start; and
v) be off work.
In certain situations these conditions do not need to be satisfied for a right SMP to arise, such as the following examples:-
i) when an employee has been employed for at least 8 weeks and the employer dismisses her solely or mainly to avoid liability for SMP.
ii) when an employee is confined (i.e. gives birth) more than 14 weeks before EWC, and would have otherwise qualified.
It follows from this that an employee does not need to be employed by the employer from whom she receives SMP at the point when she begins to receive that pay (or indeed after that), provided she was working as an employee of the employer for the continuous 26 week period immediately preceding the 14th week before EWC (and was earning at or above the required average rate), that employer will be fixed from then onwards with a liability to pay her SMP, whether or not she remains in employment with it subsequently. Once a woman qualifies for SMP against a particular employer in this way, she will retain the entitlement to be paid SMP by that employer throughout her period of entitlement even if she ceases to be employed by that employer (and it does not matter whether she ceases to be employed by that employer before the period of entitlement starts, or at some point during the period of entitlement). This contrasts with entitlement to take statutory maternity leave as the woman must at the point that she takes maternity leave still be an employee of the employer from whom she is taking that leave.
However if a woman starts, during her period of SMP entitlement, to work for an employer (“Employer B”) other than the employer (“Employer A”) that is liable to pay her SMP, then Employer A will not be liable to pay SMP from then onwards for any of the remainder of her period of SMP entitlement (even if she subsequently stops working for Employer B before the original period of SMP entitlement has ended).
SMP – period of entitlement
This is for 39 continuous weeks. An employee is not allowed to any payment after this SMP period unless she is entitled to any contractual maternity pay.
SMP – rates and payment
During the first 6 weeks of maternity pay, the rate is 90% of the employee’s normal weekly earnings during the 8 weeks immediately before the 14th week before EWC (“the Higher Rate”). Thereafter another rate is payable which is the lower of the Higher Rate and the set rate currently of £139.58 per week (with effect from the 5th April 2015).
SMP – recoupment
SMP is generally paid by the employer but can mostly be recouped by making deductions from the employer’s National Insurance contributions.
Some people who do not qualify for SMP will quality for maternity allowance (“MA”). For example the self employed and people with insufficient qualifying service to get SMP.
Currently MA is £139.58 (with effect from the 6th April 2015) or (if lower) 90% of the employee’s normal weekly earnings, and is payable for up to 39 weeks. To qualify for MA an employee must:-
i) have become pregnant and reach, or been confined before reaching, the commencement of the 11th week before the EWC;
ii) have been engaged in employment as an employed or self employed earner for any fraction of the week, in at least 26 of the 66 weeks immediately preceding her EWC.
iii) have average weekly earnings which are not less than the maternity allowance threshold for the relevant tax year (currently £30) and
iv) not be entitled to SMP for the same week in respect of the same pregnancy.
Employees are disqualified from MA if they work as an employed or self employed earner for more than 10 days in the maternity allowance period.
If you need any further advice or guidance on maternity leave, whether as an employer or an employee, then please contact Gemma Mayer on 01775 722261 or email firstname.lastname@example.org or Daven Naghen on 01775 722261 or email email@example.com or visit our offices or arrange an appointment at 23 New Road Spalding Lincolnshire PE11 1DH .
Are Pre Nuptial Agreements Worth It?
It was hoped that the long-awaited decision in the case of Radmacher v Granatino in October 2010 would answer the above question. The case established the following point of principle:
‘The Court should give effect to a nuptial agreement freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement.’
The answer appears to be therefore ‘probably!’
Couples planning to marry have long sought to agree who should have what in the event of the relationship going wrong, but the Divorce courts in England have the discretion to do whatever is considered reasonable in all the circumstances of the case when a couple divorce . Nevertheless the Courts have increasingly been willing to look at any pre-nuptial agreement entered into by the parties when considering all the circumstances of the case but the weight (if any) attached to the terms of the agreement differs from case to case. There is no law in England which states that couples are absolutely bound by any pre-nuptial agreement they entered into before they married.
However as society changes and with Divorce becoming sadly ever-more commonplace, many believe that couples ought to have the right to enter into a contract with their partner to sensibly work out the terms of any divorce settlement in the unfortunate event of the relationship just not working out. It is felt therefore that any move in the law to make pre-nuptial agreements absolutely enforceable in the event of Divorce would merely reflect the reality of modern-day living.
The fact is that despite making vows to stay together ‘til death us do part’ it makes sense to attempt to lay down an agreement for the division of assets on divorce in the hope that this will serve to cut down the bitterness and trauma of a marriage breakdown.
The case of Radmacher does not reflect a change in the law but it does provide the clearest indication from the English Courts yet that in the right circumstances a nuptial agreement in the right circumstances will be respected and upheld by the courts. However until parliament introduces legislation to firmly lay down the principles under which a nuptial agreement will be fully recognised by the courts then couples cannot be certain that the terms of their agreement will be absolutely binding.
However does that mean that couple should ignore the idea of entering into such an agreement? Absolutely not. Pre-nuptial agreements are likely to be respected by the divorce court particularly in short marriage and where the contribution in money/property of both parties to the marriage is clearly defined in the agreement. Also both parties ought to take independent legal advice before entering into the agreement