Martineau Education Bulletin

December 2009

Key contact:
Smita Jamdar
Partner and Head of Education
T: 0870 763 1332
E: smita.jamdar@martineau-uk.com

If this e-mail is not displayed correctly, please click here to read it online

The Education Team at Martineau wish you all a very Merry Christmas and all the best for a successful and prosperous 2010

Contents

Strategy, Students and Governance

Lord Browne's review of higher education funding | read
Lord Mandelson recently announced the appointment of Lord Browne as the chair of the Independent Review of Higher Education Funding and Student Funding. In this article we look at what universities can expect from the review when it reports towards the end of 2010.
Equality Bill update | read
As the Equality Bill continues through the parliamentary process, we update you on two proposed new clauses.

Finance, Technology and IP

IP licences venturing into anti-deprivation | read
We examine the implications of a recent case which has confused the law on when an intellectual property licence can be terminated in insolvency situations.
The price is right? | read
We highlight a recent Intellectual Property Office booklet containing useful guidance on valuing intellectual property rights.

Estates

Carrot and stick for sustainable estates | read
We highlight some of the initiatives proposed in the government's consultation on feed in tariffs that could offset increases in costs brought about by the CRC Energy Efficiency Scheme.
Student accommodation rent arrears: a step-by-step introduction | read
This article provides guidance for universities on dealing with students in halls of residence who fail to pay their accommodation fees.

Human Resources

Temporary agency workers regulations | read
The government recently consulted on the long-awaited draft Agency Workers Regulations. Although there are few significant changes since the earlier consultation, the draft Regulations do shed light on some of the previous uncertainties. This article considers these in more detail.
Consultation on additional paternity leave and pay | read
From 2011, mothers will be able to choose whether to take their full maternity leave period or to return to work early and transfer up to 26 weeks' maternity leave to the father. We examine the proposals in more detail.

Full article details

• Strategy, Students and Governance

Lord Browne's review of higher education funding | back to top

On 9 November Lord Mandelson announced the appointment of Lord Browne as the chair of the Independent Review of Higher Education Funding and Student Funding.

The announcement came just a week after the Business Secretary launched the government’s Framework for Higher Education (Higher Ambitions - the Future of Universities) which warned that the high levels of public funding which the government says universities have enjoyed in recent years cannot continue.

What then, can universities expect from the review of funding when it reports towards the end of 2010?

The terms of reference set by Lord Mandelson are broad and include a remit to make recommendations regarding future fees policy.

In assessing the options, Lord Browne’s review will take account of the following:

achieving the goal of widening participation;
affordability of higher education;
simplification of the system of support for students.

The majority of commentators are expecting that students will see a rise in tuition fees following publication of the report. However, the importance of widening participation, affordability and simplifying the system of support for students may lead to a more creative approach to funding than the straightforward imposition of a flat fee increase across the board.

When it introduced variable tuition fees in 2004 the government intended to introduce a market in university places. Although it might have been expected that market forces might be further embedded within student funding as part of this review, no mention of creating such a market appears in the terms of reference for the review.

What is clear is a desire on the part of the government to ensure fair access to universities and to avoid barriers to access. This may include an effort to increase the awareness of the existence of bursaries to support students from disadvantaged backgrounds in order to try to ensure the aims of wider access and affordability are met. A recent report for the Office of Fair Access [Awareness, take-up and impact of institutional bursaries and scholarships in England] revealed that 25% of new students had not heard about bursaries, and more than 40% of students believe bursary schemes are ‘too complex’.

It may also include attempts to widen the demographics of the student population beyond the traditional 18-21 year old full time undergraduate. The NUS has been campaigning for an increase in support to be given to part time students. Lord Mandelson has said that Lord Browne’s team “will examine the balance of contributions to universities by taxpayers, students, graduates and employers”. A concern for universities and students alike may be the prospect of financial constraints being imposed on institutions due to the current economic climate.

Universities UK has been keen to point out the valuable contribution the higher education sector makes to the UK’s economy (which it puts at £59 billion), and has warned against cuts in funding as “excellence cannot be maintained on the cheap”. In his response to the announcement of the fees review, Professor Steve Smith of Universities UK pointed out that the sector’s excellent contribution to the UK’s economy has been achieved despite a reduction in public and private funding. He has also stated that Universities UK will be putting evidence to the review to show how both universities and students have benefited from additional tuition fee income.

Whether the review team is able to put forward innovative recommendations on higher education funding will become clear when it reports in 2010. In the meantime, the review committee will begin a process of consultation shortly. In doing so it will work with HEFCE and the Office for Fair Access and will take account of the conclusions of Professor Sir Martin Harris’s review on promoting access to higher education.

Andrew Holden
Associate, Commercial Disputes Team
T: 0870 763 1661
E: andrew.holden@martineau-uk.com

© Martineau 2009

Equality Bill update | back to top

We last updated you on the progress of the Equality Bill in our August bulletin. The Bill was included (for the second time) in the Queen’s Speech and has recently passed the Report stage and third reading in the House of Commons. The government currently anticipates that at least part of the Bill will come into force in the autumn of 2010, although this will clearly depend on the Bill progressing smoothly through the parliamentary process before the general election.

The Bill has undergone some further amendments, including:

Pre-employment enquiries about disability/health

A new clause has been added which seeks to deter employers from asking job applicants questions about their disability/health and then rejecting their application on the basis of the answers to those questions.

Employers will be permitted to ask questions for limited purposes, including to establish whether they need to make reasonable adjustments in relation to the interview process, or for the purpose of monitoring diversity in the range of applicants for the post. However, rejecting an applicant who discloses a disability before he/she has been given an opportunity to successfully pass an interview risks a tribunal claim in which the burden of proof will be reversed i.e. it will be for the employer to prove that it did not discriminate against the applicant because of his/her disability. Once the applicant has passed the initial interview stage questions about disability/health will be permitted provided these relate directly to the requirements of the job.

Irrelevance of alleged discriminator’s characteristics

A new clause has been added which confirms that the fact that the alleged discriminator shares a protected characteristic with the complainant is irrelevant. For example, a gay man accused by another gay man of discriminating on the grounds of sexual orientation could not argue that no discrimination has occurred because he is also gay.

We will keep you updated on the progress of the Bill in future bulletins.

Joanna Forbes
Senior Associate, Education Team
T: 0870 763 1310
E: joanna.forbes@martineau-uk.com

© Martineau 2009

• Finance, Technology and IP

IP licences venturing into anti-deprivation | back to top

Universities often licence others to use technology developed by their employees or students, frequently because this technology can be better exploited outside of the institution by a commercial partner.

Such licensing may involve a joint venture structure. This establishes a separate company to exploit the technology, in which the university and commercial partner have a joint interest by way of share ownership. Any necessary intellectual property licence is then granted to the joint venture company.

A recent decision of the High Court, in a case between the administrators of companies within the Woolworths group and BBC Worldwide, focused on these licences of technology in joint ventures. In particular, the case examined the circumstances in which any licence of technology granted to the joint venture can be recovered in the instance of the insolvency of the other joint venture party.

A key principle of insolvency law states that any attempt to deprive any other creditors of an insolvent company of valuable assets is void. This is known as the “anti-deprivation” principle, and allows the administrators to challenge various transactions and arrangements affecting the value of the insolvent company. Generally, however, grants of interests in property (such as an intellectual property licence) can be terminated on insolvency of the licensee without issue.

In this particular case, a Woolworths group company had entered a joint venture with BBC Worldwide. One clause of the joint venture agreement granted an option for either joint venture partner to purchase the other partner’s shares in the joint venture company, if that other partner became insolvent. To exercise this option, notice had to be served on the insolvent partner. This is a fairly standard clause in a joint venture arrangement. It protects the remaining partner from the sale of the other insolvent partner’s shares to an unrelated purchaser, to whom the remaining partner might have reason to object.

A substantial intellectual property licence was granted by BBC Worldwide to a subsidiary of the joint venture company. That licence stated that it would terminate on service of the notice under the joint venture agreement exercising the share purchase for the insolvency of one of the partners. When the Woolworths company became insolvent, BBC Worldwide issued notice to purchase the Woolworths shares and to terminate the licence to the joint venture subsidiary company.

The court objected to the linking of the right to terminate the licence on insolvency with the option to purchase the other partner’s shares in the joint venture company. The court decided that this offended the “anti-deprivation” principle as the shares could be bought at a much lower value after the licence had been terminated, and that the provisions were void. Had the two clauses not been linked in this way, there would have been no objection to terminating the licence.

This decision has confused the law on when an intellectual property licence can be terminated in insolvency situations. Those involved in granting technology licences should therefore be careful to analyse the circumstances in which they can effectively retrieve these licensed rights in insolvency situations, to ensure that these rights can be terminated as necessary.

Joanne Flack, Solicitor
Intellectual Property and Technology Team
T: 0870 763 1613
E: joanne.flack@martineau-uk.com

© Martineau 2009

The price is right? | back to top

It is rare for a university to have to value its intellectual property. And it is easy to imagine, were such a valuation to be needed, that the sums involved could be astronomical, especially when you take into account a university’s “brand image”, reputation, know-how and expertise together with any patents, registered designs and the like.

Thinking about valuing universities’ intellectual property does, however, bring into sharp relief a crucial question: how do you assess the value of something as unquantifiable as intellectual property rights? This is a topic which technology transfer officers grapple with on a regular basis, albeit on a much smaller scale.

In early December, the Intellectual Property Office produced a useful booklet entitled “Agreeing a Price for Intellectual Property Rights” which covers the basic principles used in valuing intellectual property. The booklet runs to 30 or so pages but is easy to read and includes a comprehensive overview of matters to take into account when considering how much any particular piece of IP might be worth.

Probably the most valuable part of this booklet, from a university’s point of view, is the useful checklist which itemises the criteria that are very likely to run through the minds of any potential licensee or assignee of university intellectual property.

The booklet can be found by clicking on http://www.ipo.gov.uk/iprpricebooklet.pdf.

Helen Driscoll, Partner
Intellectual Property & Technology Team
T: 0870 763 1635
E: helen.driscoll@martineau-uk.com

© Martineau 2009

• Estates

Carrot and stick for sustainable estates | back to top

We reported in our May bulletin on the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme which will come into force from April 2010. This scheme will require major users of energy to purchase allowances to emit carbon or pay a penalty. One of the key provisions in the scheme is the league table where all participants (around 5,000 in total) will be ranked according to how well they are doing with carbon reduction measures. Position in the league table will determine the level of repayment from the recycling fund.

But all is not doom and gloom. The government consultation on feed in tariffs for renewable generation up to 5MW has recently closed, and its response is eagerly awaited.

In essence, the proposal is that if electricity is generated from a renewable source (and provided that Renewable Obligation Certificates (ROCs) are not claimed), the generator will be paid for the generation even if it consumes the electricity itself (the “generation tariff”). In addition, if electricity is exported to the grid, a further payment will be made (the “export tariff”).

If electricity is used on site then it will not be counted for the purposes of the CRC unless either ROCs or the feed in tariffs are claimed, in which case that energy consumption will be counted.

The level of the feed in tariff depends on the technology used to generate the power. For example, for each kW produced using solar PV the generator will be paid (depending on the size of the installation) between 26.0p and 36.5p per kW plus an additional amount for any export.

The term over which the feed in tariff is paid is 20 years except in the case of solar PV where the period is 25 years.

Feed in tariffs will be available from April 2010.

The government also intends to introduce a “renewable heat incentive” from April 2011. The detail of the scheme is yet to be published but it is likely to be a levy on fossil fuel suppliers which will in turn be passed to consumers. We will provide more information in future bulletins.

So, whilst the CRC Energy Efficiency Scheme may lead to increased costs for universities, there are other initiatives coming into force that could offset these costs, and in planning an energy strategy for an estate all options will need to be weighed.

Catherine Burke
Partner and Head of Energy, Projects and Commerce
T: 0870 763 1552
E: catherine.burke@martineau-uk.com

Rory Tait
Consultant, Energy and Utilities
T:0870 763 1214
E: rory.tait@martineau-uk.com

© Martineau 2009

Student accommodation rent arrears: a step-by-step introduction | back to top

The notes set out below give some introductory information for universities needing to deal with students in halls of residence who fail to pay their accommodation fees.

Step 1 - Informal steps

Check the payment provisions set out in the accommodation contract. In most cases, students occupy halls of residence under a licence rather than a tenancy. This guide assumes occupation by way of licence.
Maintain contact with the student and, if possible, contact parents or guardians. In many cases it may be possible to recover outstanding accommodation payments by informal discussions with these parties or by negotiating a payment plan.

Step 2 - Debt action

If Step 1 fails and the university does not wish to recover possession from the student based on the arrears, consider commencing a debt action for outstanding fees. Formal proceedings must be preceded by a letter of claim which should comply with the provisions of the Practice Direction relating to Pre-Action Conduct under the Civil Procedure Rules. This can be found on the Court Service website (www.justice.gov.uk).
This will only be worthwhile where the student is likely to have the means to pay the debt. It will be a simple contractual debt action; if the claim were to be defended for any reason, it would almost certainly be dealt with using the court’s small claims procedure
Interest should be recoverable under the terms of the licence or under statute.

Step 3 - Notice to quit

If Step 1 fails and the university does wish to recover possession from the student, serve a notice to quit on the student requiring possession.
The notice must be in writing and in fixed term licences the notice period will be determined by the terms of the accommodation contract. In the absence of any specific provision reasonable notice should be given.
Check the contract to see if it contains specific requirements as to the way notice must be served. If not, consider the most appropriate approach.
If the student refuses to leave the premises by the required date, the university will need to apply to the court for an order for possession - see Step 4.

Step 4 - Possession proceedings

The university should not apply to the court until the relevant notice period has expired.
When possession is claimed after the contractual period of the licence has expired, the university will be able to treat the student as a trespasser. In such cases, it will be possible to expedite the court proceedings.
At the hearing, the judge will make a possession order if satisfied that the university is entitled to possession, that proper notice has been given and that the proceedings are in order.
A claim for any licence fee in arrears can be made in the same proceedings.

Important points

Current OFT thinking is that withholding a student’s degree certificate for non-payment of accommodation fees constitutes an unfair term of the contract. This is because the contracts for tuition and accommodation are separate and distinct and therefore should not be linked. However, it is open to a university to nevertheless withhold the degree certificate and then challenge any subsequent injunction which may be granted.
We strongly advise universities to seek professional advice in relation to steps 3 and 4 in particular if there is any doubt as to what is required. Any defect in the notice or the procedures followed may lead to delay in, or failure at, the proceedings.

• Human Resources

Temporary agency workers regulations | back to top

Consultation on the draft Agency Workers Regulations closed on 11 December 2009. The Regulations will implement the Temporary Agency Workers Directive and give temporary agency workers, after a 12-week qualifying period, the same basic working and employment conditions as would apply to a permanent employee fulfilling the same role.

There are few significant changes since the government’s earlier consultation which we reported on in our May bulletin. However, the draft Regulations provide clarification on a number of issues which were unclear at the previous consultation stage.

Implementation

Perhaps the most significant change is that implementation of the Directive will now be delayed until 1 October 2011 (shortly before the deadline for implementation of 5 December 2011). This is to give agencies and hirers sufficient time to adjust to the changes, particularly in view of the current economic climate.

Terms and conditions

The “basic working and employment conditions” to which equal treatment will apply are those relating to pay, annual leave, working time, length of night work, rest periods and rest breaks that are ordinarily incorporated into contracts of the hirer whether by collective agreement or otherwise.

The definition of pay remains broadly the same as at the previous consultation stage and includes basic pay plus other contractual payments such as commission, bonuses and holiday pay. The draft Regulations specifically exclude a number of payments and rewards, for example maternity and paternity pay, payments relating to redundancy and occupational sick pay.

In the context of bonuses, the government is proposing some refinement to its original approach. Bonus payments will not be subject to the equal treatment entitlement if they are awarded in the context of performance appraisal systems aimed at the long-term management, motivation and retention of staff; relate purely or partly to the hirer’s performance as an organisation; or would not be due to the agency worker during his time with the hirer had he been recruited directly.

Qualifying period

The draft Regulations provide some explanation as to how the 12-week qualification period will work in practice. This will be 12 calendar weeks and it will not matter whether the individual works full-time or part-time.

The government is proposing a minimum break of six weeks between assignments before continuity will be broken and the qualifying period can restart. This is intended to prevent employers avoiding the rules though a series of repeat contracts.

A new qualifying period will start if a worker takes on a new role with the same employer. However, there will be safeguards built in to prevent avoidance of the rules. The worker will need to start a new, separate assignment and this new assignment must be “substantively different”. So, slightly varying the duties or job specification of an agency worker will not be sufficient to restart the qualifying period. The meaning of “substantive” in this context will be set out in guidance.

Certain legitimate absences will not count towards a break period either before or after the 12 week period has elapsed. For example, approved annual leave and certified sick leave will “pause” the clock on the qualifying period. In the case of maternity-related absence, such as on health and safety grounds, the clock will continue to tick.

Equal treatment

A question that arose at the previous consultation stage was what would happen if there was no comparable employee with which to compare the agency worker. The current consultation sheds some light on the approach to be taken.

The basic rule for assessing equal treatment set out in the Regulations is that the worker should be treated as if s/he had been recruited directly by the hirer to do the same job. The Regulations expressly provide that terms and conditions consistent with those given to a comparable employee will be deemed to mean compliance with the Regulations. A comparable employee is someone doing broadly similar work in the same establishment. However, this is not the only way a worker can demonstrate equal treatment.

Draft guidance indicates that it will usually be a matter of common sense what amounts to equal treatment. Whilst acknowledging that the simplest approach will often be comparison with a permanent employee, the draft guidance also suggests alternative ways equal treatment might be established. For example, in organisations with clear pay scales it should be obvious what level of pay the person would have received had s/he been recruited directly, taking into account skills, experience and qualifications; in certain organisations there may be a going rate for a given job and in many cases certain rights, such as annual leave, will be clearly set out or understood.

What should universities be doing?

Although October 2011 might seem a long way off, universities would be wise to start preparing now. This should involve a thorough review of contracts, policies and procedures to ensure “equal treatment”. Universities will also need to put procedures in place to ensure that they are able to provide relevant information to agencies, as employers may be liable to the extent that they are responsible for any infringement of the Regulations, for example, through failing to provide the necessary information on pay.

Universities may also want to reconsider their employment strategies between now and 2011. A primary reason for opting for temporary agency workers is that it offers flexibility. This will be reduced with the implementation of the Regulations. Therefore, universities may wish to consider whether use of temporary agency workers will remain the more convenient and financially beneficial option.

Jane Byford
Partner and Head of Employment & Pensions Team
T: 0870 763 1378
E: jane.byford@martineau-uk.com

© Martineau 2009

Consultation on additional paternity leave and pay | back to top

Currently, mothers are entitled to statutory maternity leave of 52 weeks made up of 26 weeks’ ordinary maternity leave and 26 weeks’ additional maternity leave, whereas fathers are only entitled to up to two weeks’ paid paternity leave on the birth of a child (or placement for adoption).

However, in a radical change in the law from 2011, mothers will be able to choose whether to take their full maternity leave period of 52 weeks or, alternatively, to return to work early and transfer up to 26 weeks’ maternity leave to the father. This will give fathers the right to up to six months’ Additional Paternity Leave (APL). The father will receive Additional Paternity Pay (APP) if he takes the leave whilst the mother is still eligible for statutory maternity pay.

Although the term “father” is used throughout this article, APL and APP will apply equally to partners and civil partners of mothers and to adopters who are entitled to statutory adoption leave and pay (in the case of couples, this will be the person who chooses not to receive statutory adoption pay).

The government has recently consulted on draft Additional Paternity Leave Regulations and draft Additional Statutory Paternity Pay Regulations which would implement these changes. The proposals are as follows:

Who will be eligible for APL?

A father who has been continuously employed by the same employer for at least 26 weeks ending with the 15th week before the baby is due (which essentially means that the father must have already been employed by the employer when the mother fell pregnant). He must remain in the same employment from the 15th week until he commences APL. The father must have responsibility for the upbringing of the child and be taking leave for the purpose of caring for that child.

Who will be eligible for APP?

A father who has average earnings at least equal to the lower earnings limit (which is currently £95 per week) during the eight week period ending with the 15th week before the baby is due will be eligible for APP.

Notification

A father must give his employer eight weeks’ written notice of his intention to take leave and specify when he wishes it to begin; the expected week of the child’s birth; the date of the child’s birth; and when he intends to return to work. Employers will be required to confirm these start and end dates to the employee within 28 days of receiving the written notification.

When can leave be taken?

The earliest that a father can start APL is 20 weeks after the child’s birth or placement for adoption, and he will need to have completed the leave by the child’s first birthday or one year after placement for adoption.

The leave can only be taken once the mother has returned to work, although there is no requirement that the father’s leave begin immediately after the mother returns to work.

The minimum duration of APL is two consecutive weeks. The leave will need to be taken in periods of complete weeks and as one continuous period.

When can a father receive APP and at what rate?

The period of APL may be paid if the leave is taken whilst the mother is still eligible for statutory maternity pay (i.e. in the first 39 weeks of her maternity pay period) or she is still entitled to maternity allowance or statutory adoption pay. Leave taken after this period has ended would be unpaid. If this requirement is met, APP will be paid at the lesser of the standard SMP rate, currently £123.06 per week or 90% of the father’s average earnings.

During leave

During his leave period, the father will be entitled to all terms and conditions of employment which would have applied if he had not been absent. He will also be entitled to attend work or training on up to 10 days without loss of APP and without bringing his leave period to an end.

Return to work

An employee returning from a single period of APL lasting 26 weeks or less will be entitled to return to the same job on the same terms, unless there is a redundancy situation (see below). Where the father takes subsequent, consecutive periods of statutory leave (such as parental leave), he would be entitled to return to the same job and terms unless there is some reason why this is not reasonably practicable. In this case, he would be entitled to return to a suitable alternative job.

Redundancy

Fathers taking APL will be protected from being singled out for redundancy and will be entitled to be offered suitable alternative vacancies in the same way as mothers on maternity or adoption leave.

Administration of scheme

Parents will be required to self-certify their entitlement to APL and APP by providing the employer with specified information and a signed declaration that the information they have provided is correct. This information will allow the employer to check the employee’s eligibility for APL and APP and to calculate any payment due. In addition, the information will be used by HM Revenue and Customs to check that the claim was paid correctly and that the mother was entitled to maternity or adoption pay.

There is no requirement for the father’s employer to check the mother’s eligibility or that she has returned to work. However, the father must provide details of the mother’s employer, if requested, so that his employer can make the checks if it so chooses.

What should universities do now?

The consultation closed on 20 November 2009. The government expects the changes to be introduced by April 2010 with the law applying to parents of children due on or after 3 April 2011 or, in the case of adopted children, children matched with a person after this date.

Universities will need to consider amending their maternity and paternity leave policies and ensuring that they have a system in place for monitoring employee eligibility once the Regulations have been finalised.

Jane Byford
Partner and Head of Employment & Pensions Team
T: 0870 763 1378
E: jane.byford@martineau-uk.com

© Martineau 2009

© Martineau

The bulletin contains a summary of complicated issues and should not be relied upon for specific matters. You are advised to take legal advice on particular problems. Please contact us and we will be happy to assist.