There is no escaping the issue of climate change these days, and businesses are under no doubt that customers, employees and regulators expect them to do more to protect the environment.
A recent report from polling organisation Ipsos Mori highlights the importance employees attach to the environmental credentials of their employers. Almost nine out of ten (86 per cent) say they feel it is important that employers act responsibly towards society and the environment.
Meanwhile, further regulatory action to promote environmental best-practice can be expected. New rules governing the disposal of waste electrical equipment (the so-called ‘WEEE Directive’) are slowly being implemented, and the Government has begun consulting on proposals to strengthen the penalties for businesses that contaminate water or land, or cause damage to biodiversity.
Further information:
Your business and the environment
Using energy efficiently
This year sees the beginning of the implementation of the Companies Act 2006 which received Royal Assent in November last year. The first complete review of Company Law for 50 years, the Act has been the subject of long discussion in both the commons and Lords.
The longest piece of legislation ever to be put on the statute book in Britain, the Act contains hundreds of changes to existing company law. It is the biggest shake up to Company Law for decades and is aimed at removing unnecessary regulation, streamlining processes and giving shareholders more say in the running of companies.
The new legislation is set to have tremendous impact on private, public and quoted companies as well as their shareholders, company secretaries and auditors. And changes are already coming into place.
As from 1 January 2007, all UK companies must include certain information on documentation and their websites and email footers or they will breach the Companies Act and risk a fine. Under the Act, every business must list its company registration number, place of registration, and registered office address on its website. This information should also appear on order forms and in emails.
Read our short guide on the provisions of the Companies Act
Following the unexpectedly large numbers of workers who arrived from the eight countries that joined the European Union in 2004, the Government has imposed tighter employment controls on nationals from Bulgaria and Romania, the two countries that joined the EU at the beginning of this year.
Whereas employees from the 2004 accession countries were able to work more or less without restriction, those from Bulgaria and Romania will only gradually be permitted to join the UK labour market.
For an initial period of 12 months, the following provisions will apply:
- You will only be able to employ a Romanian or Bulgarian worker if they have been authorised for work in the UK by the Home Office.
- Low-skilled workers will only be permitted to work in the UK if they qualify under schemes that already exist in the agriculture and food-processing sectors.
- A broader range of highly skilled workers will be able to work in the UK, if they qualify for a work permit or are eligible for the Highly Skilled Migrant Programme.
Useful links:
Ensuring your workers are eligible to work in the UK
Employing Migrant Workers Website
Q: Are there any forthcoming legal changes I need to be aware of?
A: There will always be a few regulatory changes in the pipeline, so it pays to keep an eye on developments at all times. The main changes that will affect most businesses over the coming months include:
- New rules, to be announced in January, that will apply to Romanian and Bulgarian citizens wishing to work in the UK when their countries join the EU in 2007
- the extension from 6 April 2007 of maternity and adoption leave from six months to nine months
- the extension, also from April 6 2007, of the right to request flexible working to cover carers of elderly or sick relatives
- a widening of the scope of rules requiring employees to inform and consult with their employees – all businesses with 100 or more employees will be included from 6 April 2007
- the introduction of a smoking ban in almost all workplaces from 1 July 2007.
Despite its length (1,300 sections no less), one of the main aims of the new Companies Act, which became law in November, is to streamline the rules and procedures involved in setting up and running a business.
The Government estimates that the Act will lead to savings for the small-business sector totalling £100m. This will be down to efficiencies created by changes such as:
- the removal of the requirement for companies to appoint a company secretary or to hold AGMs
- the introduction of new model articles for companies that better reflect the way modern businesses operate
- easing the financial rules for companies purchasing their own shares.
You should note, however, that the Act also introduces some new obligations, particularly for company directors. While the key duty of the directors to act in the shareholders’ interest is restated, the Act notes that attention should also be paid to the interests of employees, suppliers, consumers and the environment.
In addition, the Act introduces a new criminal offence of knowingly including false or misleading details in an audit report.
The Act’s provisions will be introduced gradually, but all will be in effect by October 2008.
Find out more about Company Directors’ responsibilities