In this regular feature, partners at Davies Lavery deal with questions sent in by readers. Here we look at asbestos obligations, flood risks, holidays on sick leave and fixed-term employment contracts

I am an employer and lease my current premises. Do I have any obligation to secure the building in relation to the likely presence of asbestos?Robert Dodgson explains the risks and obligations involved.The short answer is: as an occupier, yes, you do have obligations to consider. The Control of Asbestos at Work Regulations were introduced in 1987 and were amended in 1998 to cover all those people who were liable to be exposed to asbestos in the workplace. A major problem facing employers and workers is that often it is not known whether, and where, asbestos may be in a building. While under current regulations there are duties on employers to prepare risk assessments, maintain buildings, and protect workers and occupants. There is nothing within them indicating how the work is to be carried out. Therefore, under the new Control of Asbestos at Work Regulations [2002], an explicit duty is placed on those who control premises. As a business owner leasing premises, these regulations require you to:1. Take reasonable steps to locate materials likely to contain asbestos2. Assume that any material contains asbestos unless there is evidence that it does not3. Keep up to date written records of the location of materials4. Monitor the condition5. Assess the risk of exposure from asbestos and presumed asbestos materials and prepare and implement a management plan to control these risks.The Health & Safety Commission will be seeking compliance with the new regulations by the beginning of 2004. It is hoped and expected that companies will now start to implement systems by, for example, conducting an asbestos survey and budgeting for the cost of the surveys and any work necessary.The cost of failure to comply with the regulations could be very high as those involved in the construction, design and management of buildings face six-figure or more compensation bills, criminal prosecution and withdrawal of insurance. The regulations will be enforced pursuant to the Health & Safety (Enforcing Authority) Regulations [1998] which allocates responsibility between the HSE and local authorities. It is recommended that all those who believe they could be affected, particularly those who own, occupy or are responsible for the management of commercial buildings constructed between 1950 and 1999 (the period when asbestos was routinely used in construction) take steps now to assess the potential risk.Robert Dodgson is a partner at Davies Lavery and heads the commercial property division. Contact him by emailing robert.dodgson@davies-lavery.co.uk One of my employees is on long-term sick leave and is covered by our income protection cover. He has recently applied for holidays. Is he entitled to his annual leave considering that he has not been able to return to work? Will I need to top up the amount that I am receiving from the group income protection insurer?Helen Tilley discusses the impact of paid holidays on income protection cover.Monthly payments under income protection insurance cover are capped so that the employee claiming benefits, in broad terms, does not receive more than an agreed percentage of his salary. This ensures that there remains a financial incentive to return to work as and when the employee is no longer incapacitated.Normally the insurance policy contains a provision that other regular income payable as a result of incapacity, for example, similar insurance policy payments, will be taken into account to ensure the cap is not exceeded. Similar wording is used by different insurers. However, a recent Employment Appeals Tribunal decision on three similar cases, Kigass Aero Components v Brown [2002], reinforces that an employee on long-term sickness is entitled to take paid statutory holiday while off sick, provided the necessary notice is given to the employer.This could mean that while incapacitated employees are receiving payments in connection with an income protection insurance scheme, they could also be receiving payment for statutory annual leave while sick. This may reduce their financial incentive to return to work. Therefore, the employer will need to fund the difference between what is payable for those statutory holidays due to the income protection scheme, and the full salary for those days.The ability of employees to claim paid statutory annual leave, arises from the Working Time Regulations [1998]. These regulations award a right to certain workers to take paid annual leave (Regulation 13). Unlike other parts of the regulations, Regulation 13 does not specify that the person needs to be actually working. The Employment Appeals Tribunal took the view that this wording must have been missed out at the drafting stage for a particular reason. Therefore, when a worker is absent while sick, he can be regarded as enjoying a "rest-period", and he can decide to exercise his right for statutory annual leave.Since 23 November 1999, statutory annual leave has been four weeks. Different periods apply prior to that date. The statutory annual leave must be booked in advance, and the time must be taken during the leave year, otherwise that leave is lost. An employer can refuse the request for leave by serving a counter notice on the employee. Additionally, the employer can require an employee to take all or part of his leave on certain dates by giving the necessary notice. The four weeks can include public holidays.Where the employee's incapacity is genuine, the ability to receive extra money for statutory annual leave for a maximum of four weeks per year should not result in a significant change in that person's pattern of absence. Helen Tilley is a partner at Davies Lavery and heads the accident, health and life division. She can be contacted on helen.tilley@davies-lavery.co.uk My business currently falls within a known flood risk area. How well am I protected under an existing small business policy for flood cover? Philip West explores the current status of flood cover.Following the flooding in autumn 2000, insurers responded to concerns about flood cover by committing to a two-year agreement on the availability of flood insurance for existing domestic properties and small business policyholders. Crucially, that agreement has just come to an end. It has now been replaced by the ABI's Statement of Principles on the provision of flood insurance, which applies from 3 January 2003, but is subject to review in the event of significant external shocks such as withdrawal of flood reinsurance.The Statement of Principles sets out the basic approach for member companies providing flood insurance. It seeks to provide a competitive market for insurance based on the actual risk of flooding. Under the general policy, ABI members will continue to provide flood insurance to as many domestic properties and small businesses as possible. The premiums charged and other terms, such as excesses, will reflect the risk of flooding but will be offered in a competitive market. Successful operation of the principles is dependent on planned information on risk levels and investment being available from relevant flood defence authorities. The application of the principles depends on the extent to which an area is subjected to a risk of flooding. The Department of Environment Food and Rural Affairs (Defra) already protects the majority of properties in flood-risk areas to the indicative minimum standard of one in 75 years for urban areas or better. The level to which properties are defended above this will vary considerably and premiums will reflect different degrees of risk; but flood cover will be available as a standard feature of household and small business policies.In a number of locations the risk of flooding is unacceptably high and existing flood defences provide less protection than the Defra indicative minimum standard. Where improvements to meet these standards are scheduled for completion within the next five years (before 2007), insurers will maintain flood cover for domestic properties and small businesses which they already insure. The premiums charged on other policy terms - such as excesses - will reflect the risk.If a domestic property in this category is sold, a current insurer will continue to provide cover, subject to satisfactory information about the new owners, especially the previous claims record. Where a small business is sold the current insurer will consider whether to continue with cover. This will depend heavily on the proposed new use of the premises and the previous claims record of the new owner. Philip West is managing partner at Davies Lavery's London office and heads the construction and property damage division. He can be contacted on philip.west@ davies-lavery.co.uk I employ a number of people under three-month fixed term contracts and sometimes do not need them for the whole time. Do I have the right to terminate their contracts if the work for that period of time dries up?Robert Manley outlines what employers need to consider in dismissing fixed-term employees.Essentially, you will not have the right to terminate the contract you have given your employee unless it contains an express provision permitting you to do so or the employee agrees to accept the termination or breaches the contract himself. Fixed term contracts are exactly what they say, a contract to employ a person for a fixed period of time. Employers sometimes prefer to employ senior staff on these contracts, usually for significantly longer than three months. The problem with them arises when the employer decides that he wishes to dispense with the services of the employee. If the contract makes no provision that permits the employer to terminate the contract before the expiry of its fixed term he will be acting in breach of contract and the employee will be entitled to damages representing the sum he would have received had the contract been fulfilled. Employers can avoid this situation arising by inserting into the fixed term contract a break clause. Break clauses permit fixed term contracts to be lawfully ended before their expiry date by permitting the employer to terminate the contract on giving notice of termination to the employee. Any such notice should comply with the statutory minimum period set out under Section 6 of the Employment Rights Act [1996]. In the case of an employee who has been with his employer for less than two years, one week's notice is the minimum requirement. Without a break clause, the contract cannot be brought to an end by notice and the statutory minimum notice periods are simply irrelevant. An alternative is to insert a termination clause. Termination clauses permit the employer to terminate the fixed term contract on the happening of some predicated event, like bankruptcy or, for the present circumstance, the loss of work. Employers should also be aware of the Fixed Term Employees (Prevention of Less Favourable) Regulations [2002], which came into force on 1 October 2002. These regulations seek to ensure that fixed-term employees are not treated comparably less favourably than permanent employees, unless this can be easily justified. Fixed-term employees who believe that they have been treated in a manner that breaches the regulations may now request a written statement from their employer explaining the reason for such treatment. Robert Manley is a solicitor and member of the company commercial division, specialising in employment law. Contact him on robert.manley@ davies-lavery.co.uk

Get your questions answered

Davies Lavery London managing partner Philip West coordinates the legal surgery. You can send queries to him by emailing LegalSurgery@davies-lavery.co.uk. If you would like more information or wish to discuss the queries answered in this issue, please either email as above or contact the lawyer concerned. Any initial discussion will be handled free of charge. Depending on the nature of the query, we may find that further advice is required. We would then recommend that you might want to formally instruct Davies Lavery or any other firm to handle the matter. You can contact Davies Lavery on 020 7780 6868.

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