COMMENT & OPINION SLTN


VIEW Scott Wright


N old philosophical argument has reared its head in the Scottish licensed trade. It comes in light of events in West Dunbartonshire, where the board has declared there is an overprovision of licences in 15 of the 18 areas within its boundaries. In short, it means it’s going to be more difficult from now on for anyone wishing to launch a new pub or off- sales in those areas, unless they buy premises which are already licensed. The board’s stance is controversial and highlights the ideological differences which traditionally separate the little guys from the corporate players. The small independents, whose views are largely embodied by the Scottish Licensed Trade Association (SLTA), have welcomed the development. They have long been convinced that many of the alcohol-related problems Scotland faces have been caused by licences being issued too readily. Too many businesses chasing too few customers, they


A question of pub philosophy A


say, is a recipe that’s driven prices down and made alcohol too accessible, particularly in areas of deprivation. The SLTA also counters the view that capping licence numbers will stifle new business development. Rebuffing accusations of protectionism, they say a declaration of overprovision will bring stability to the market and give operators the confidence to invest in their businesses. Their arguments are compelling, but at the same time


I reckon there is merit in the counterpoints advanced by the Scottish Beer and Pub Association (SBPA) and even some bigger independents. Guided more by free market principles, they dismiss the West Dunbartonshire stance as simplistic, headline- grabbing and led by the political determination to reduce alcohol consumption in Scotland (even though some figures suggest it’s already falling). They say more can be done to tackle social problems caused by alcohol consumption through current legislation, and that it will hinder entrepreneurialism. Figures obtained by the SBPA actually suggest that the number of licences has been falling since 2007. But the SLTA claims licence numbers alone aren’t a true


barometer, as they mask the fact many licences are now held for larger retailers of alcohol like supermarkets and ‘superpubs’ than used to be the case. In other words, the volume of alcohol sold has risen, particularly in supermarkets, even though there are fewer licences. There is also debate over whether there is even such a thing as overprovision, with the naysayers claiming that the only arbiter in determining licence numbers should be the laws of supply and demand. Or to put it another way, it should be left to market forces to decide, on the logic that not every licensed business is going to survive. The overprovision issue is as complex as it is controversial, and there are strong arguments on both sides. But, on balance, I would say action does need to be taken in areas where alcohol is a big problem. One of the reasons Labour blocked minimum pricing was that it was an untried policy. The same might well be levelled at the SNP-led, West Dunbartonshire board. But is this really a reason not to try? I don’t think so, and believe that it’s worth capping new licences in West Dunbartonshire on a trial basis to see how it goes.


Staff hold rights in pub transfers


Are you taking over a tenancy and planning to bring in new employees? It may not be that simple, writes Harper Macleod solicitor Jennifer Nicol


when businesses change hands. Readers may or may not


B


have heard of the Transfer of Undertakings (Protection of Employment) Regulations 2006 – more familiarly referred to as TUPE. Where there is the transfer


of a business, or part of a business, TUPE transfers to the buyer all of the seller’s employees (or those working in the part of the business being transferred). In essence, the sole


purpose of TUPE is to protect employees. Transfers can happen in a


variety of ways and even when the business stops trading for some time, as happened in the recent case of Wood v Caledon Social Club Limited and London Colney Parish Council. The implications of this case for the licensed trade need to be carefully considered by


Careful planning and properly worded


agreements are vital to avoid undesirable consequences.


landlords and operators alike. In this case, Mr Wood had been managing the bar function at Caledon Community Centre for more than two and a half years. He was employed by Caledon Social Cub Limited (CSCL) as its only employee and was also the licensee of the premises. On June 6, 2008, CSCL lost its premises licence certificate and subsequently surrendered its licence to occupy the bar area to the freehold owner, London Colney Parish Council (LCPC) on September 16, 2008. Mr Wood had been dismissed


by CSCL a few weeks earlier, on August 12.


On October 6, 2008, the bar


was re-opened by LCPC and was run by one of the parish councillors who had been


AR staff employed in tenanted pubs have rights


aspects to the EAT’s reasoning, this case is a helpful reminder that when entering into and terminating lease agreements, landlords and tenants in the licensed trade need to carefully consider the implications of the deal for employees, even where premises have stopped trading for a while. Landlords might want tenants to keep them free from all potential liabilities if any claims are made by aggrieved employees.


Jennifer Nicol: new tenants must be aware of TUPE regulations.


granted a personal licence. A second premises licence


was granted to LCPC around a month later. Mr Wood brought a claim


of unfair dismissal in the Employment Tribunal and argued that his employment should have automatically transferred under TUPE to LCPC.


He argued that, in essence, he should have been allowed to transfer over because the bar was now being run by another business, and that this was a TUPE transfer.


The tribunal did not agree,


saying that because it had closed and only reopened later, with a fresh identity, TUPE did not apply. However, Mr Wood successfully appealed to the Employment Appeal Tribunal (EAT).


The EAT said that it was a TUPE transfer because it did not matter that there was a period when no trading was conducted. It also said it did not matter that someone else was now running it in a slightly different way. By mid-September that year, LCPC intended to obtain a new premises licence and thereafter re-open the bar.


The bar had not stopped


running completely; there was simply a “temporary suspension of activities”. The EAT decision takes the


correct approach in finding in favour of Mr Wood given that TUPE is designed to protect employees in these circumstances. While there are questionable


Tenants who lose premises should be slow to dismiss staff – they could transfer to the new owner under TUPE regulations.


Tenants who lose premises should think carefully about making staff redundant if a new tenant is considered likely, because under TUPE regulations staff could transfer to the new operator. New tenants need to be careful and understand that TUPE could leave them either with staff they had not intended to acquire, or with potentially significant liabilities. Even when staff members are dismissed by outgoing operators, the new operator can ultimately be responsible for any financial claims due to the way that TUPE passes liability on to the new operator. Careful planning and properly worded agreements are vital to avoid any costly and undesirable consequences. Otherwise, the parties will


leave themselves exposed to time-consuming litigation and potential awards of (i) up to 13 weeks’ gross pay to each employee for a failure to inform and consult under TUPE and (ii) compensation for unfair dismissal of each employee to a limit of £65,300.


• Jennifer Nicol is a solicitor in


Harper Macleod’s Employment Practice Group, based in Glasgow.


November 11, 2010 - SLTN - 11


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