IGA News

Be Aware - July 2019

Be Aware - July 2019

28 June 2019

Parts Warranties

“I fitted a battery for a customer with a 3-year warranty. The customer came back after 2½ years with complaints that the battery wasn’t working properly. The customer refused to bring the car back and went ahead and got a replacement battery fitted by Ford. He is now threatening me with legal action if I do not reimburse him the full amount of the battery plus labour costs. What can I do?”

1 - Establish the facts

The first priority should always be to establish the facts of the case. Where you are contacted by a customer, whether you agree with them or not, you need to get as much detail as possible so that the matter can be investigated properly. Ideally the customer should be asked to put their complaint in writing and include any evidence they have.

The more accurate the facts, the better your decision will be.

2 - Is it a warranty claim or a breach of contract?

When you sell goods or services to consumers you cannot exclude their statutory rights. Where the parts were not as described or fit for their purpose etc, when supplied to a consumer then even 2½ years later they will be entitled to compensation.

If you sell goods or service and provide a warranty you need to see this as 2 contracts (pone for the goods one for the warranty). In the event of a fault the customer would be free to claim either under a warranty or claim for breach of their consumer rights.

Where a consumer claims a breach of contract, after the first 6 months it is for them to prove that the issue is a fault for which you are responsible. IF they can they will be entitled to their reasonable losses and whilst a judge will not be happy if the consumer goes elsewhere, if the battery was faulty when you sold it then you would be liable for the reasonable costs of rectifying the fault.

However, if the consumer cannot prove that the goods or services were faulty at time of sale, they can only claim under any warranty provided. There is no requirement to warranty any work or any parts. As such a warranty can legitimately require the consumer to return the vehicle to you and place reasonable conditions on the costs covered.

Conclusions

As always, what is appropriate will depend on the facts. Don’t forget to carefully document all conversations and to evidence all telephone calls, emails and letters for future reference.

As this is over 2½ years old, anything could have happened to the battery. It would be for the consumer to prove the battery any breach of contract, and you are a little safer if you take a hard line. Investigate their complaint and ensure the costs have been incurred. Write back pointing out it is a return to base warranty and that he is asked to bring it back to you first and deny liability. As he has not complied with the terms of the warranty you have no option but to reject the claim.

Be prepared for potential legal proceedings so consider whether to offer a gesture of goodwill to avoid any dispute.

Stolen Vehicles

“I took a car in part exchange, now the police have contacted me and told me the car was stolen and have seized the vehicle. What can I do?”

You first need to know more about the allegations, particularly, was the vehicle taken without the permission of the owner or did the owner intend to sell the vehicle but were mistaken or mislead as to who the purchaser was.

Is the vehicle stolen?

Where a vehicle is taken without the permission of the owner then the thief will have no legal title to the vehicle despite having possession of it. With a few exceptions you cannot receive a better title than the person selling you the vehicle. Therefore, you have no title to the vehicle and will lose it. If you have already sold the vehicle you will have to reimburse the buyer any funds paid and you will be liable to compensation for any losses.

Did the previous owner intend to sell the vehicle?

Fraud is something different. Where the owner of a car intends to sell a vehicle and pass legal title but the payment details used are fraudulent then title to the vehicle will pass to the ‘fraudster’ unless and until the true owner takes steps to cancel the contract, e.g. by reporting it to the police etc… If you buy the vehicle during this period for a fair price and without knowledge of any fraud, then you will gain legal title to the vehicle even after the fraud is discovered. You will not have to return the car. You will also pass title to any subsequent owner should you have sold it.

The best option remains to avoid the situation where possible. If the vehicle has recently changed owners you should satisfy yourself why it is now being sold. Sufficient identification details should be kept so that you can satisfy yourself of the identity of the person selling the car, their address and that this corresponds to the banking details and the registered owner’s details.

Conclusion

It is always difficult when cars are stolen. Who ends up with the vehicle is heavily dependent on the facts of each case. The legal situation can be complex and any advice will need to be tailored to any one particular situation. In the event you do get caught out, as an RMI member you have access to the RMI Legal advice line, as well as a number of industry experts for your assistance that can help to simplify the problem.

Holiday Pay and Voluntary Overtime

RMIF Members who have been keeping an eye on Employment Law developments over the last few years will know about the changes relating to Holiday Pay. A number of cases have, over the last few years, clarified that payments such as commissions and overtime, where they form part of the employee’s normal remuneration, should be included in calculating holiday pay. Previously employers could often argue that basic pay only was satisfactory.

A recent case at the Court of Appeal; Flowers v East of England Ambulance Trust has confirmed that voluntary overtime should be taken into account when calculating holiday pay, provided it is sufficiently regular and settled for payments to be considered to amount to “normal” remuneration. In the case ambulance crew worked voluntary overtime. It was entirely voluntary i.e. they were free to choose whether or not to do it. Lord Justice Bean, delivering the lead Judgment, agreed that on the facts the overtime was sufficiently regular to be normal remuneration. It follows that, where there is very sporadic or occasional voluntary overtime, such payments could be distinguished and not included in holiday pay.

Conclusion

This ruling is not unexpected given the direction in which the caselaw was moving. Note that the developments on holiday pay only strictly apply to the 20 days of EU leave, not the additional 8 UK days, albeit given the complexity in distinguishing between the two types of leave, many employers pay all holiday at the same higher rate.

Parental Leave and Sex Discrimination

Is it discriminatory to pay men more than the statutory minimum parental leave pay when women were paid more than the minimum for maternity leave?

This was the question for the Court of Appeal in the case of Ali v Capita Customer Management Ltd and Chief Constable of Leicestershire v Hextall. The court considered the case on 2 broad grounds, Discrimination and Equal pay and held that in either case it was not discriminatory.

The Court decided as follows:

Equal Pay

A contractual difference in shared parental leave pay between men and enhanced maternity pay for women is properly characterized as an equal pay claim. The clause in a contract providing women with a higher level of pay is more favourable to women than men.

Whilst there is a general prohibition against discriminatory actions the Equality Act 2010 does take a commonsense approach and acknowledges that in some circumstances there are legitimate exceptions. Paragraph 2 of Schedule 7 to the act says:

“A sex equality clause does not have effect in relation to terms of work affording special treatment to women in connection with pregnancy or childbirth.”

For the same reasons as direct discrimination (below), that is wide enough to include enhanced maternity pay. As a result, there is no claim for equal pay as it is specifically excluded by Equality Act 2010.

Direct Discrimination

The court also considered the exception at Paragraph 2 of Schedule 7 to the Act when considering whether men and women are in comparable positions and therefore where men are treated less favourably, is this discrimination in breach of the Act?

The court held that this exception is wide enough to include enhanced maternity pay. The minimum of 14 weeks’ leave required by the Pregnant Workers Directive is not enough to change the position after 14 weeks and:

“The predominant purpose of such leave is not childcare but other matters exclusive to the birth mother resulting from pregnancy and childbirth and not shared by the husband or partner.”

Perhaps logically the court held that men on parental leave and women on maternity leave are therefore not in comparable positions for the purposes of Equality Act 2010.

Indirect discrimination

There is a specific exclusion for indirect discrimination claims where there would be equal pay claims except for a specific exception. The exception for equal pay in paragraph 7 of schedule 2 therefore means that indirect discrimination claims cannot be brought either.

General Note

Don’t forget, this advice is general in nature and will need to be tailored to any one particular situation. As an RMI member you have access to the RMI Legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in the situation above, call 0845 305 4230 at any stage for advice and assistance as appropriate.