Your leading independent provider of legal advice to the Motor Trade.

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AM Three Issues

Calculating Holiday Pay
Two court decisions in 2014 mean that holiday pay should now be based on average pay, including commission and/or compulsory overtime, which will inevitably increase staffing costs.

Failure to correctly calculate holiday pay could lead to Employment Tribunal claims for underpayment.

The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013

These regulations came into force on 13th June 2014, but don’t appear to have been widely implemented by dealers.

They significantly amend previous rules on Distance Selling, extending the cancellation period to 14 days from the date of handover, and up to 12 months if the required information, including a cancellation form is not provided to the customer.

They also create a requirement for specific information to be provided at point of sale, whether that’s within the dealership, off premises, or a distance sale. Failure to provide this information may allow a customer to walk away from a deal without penalty, whilst failure to provide information required for an off-premises contract could result in prosecution.

Dealers need to understand what information they need to provide, and ensure that they have clear processes so that sales executives know exactly what they need to do.

The Consumer Rights Bill

This bill is currently being considered by the House of Lords and is expected to come into force in October 2015 as part of the largest shake up of Consumer Law in decades.

In particular the proposals (which are likely to become law) include a short term (30 day) right to reject goods that do not conform to the contract. That period will be extended by the length of time taken to carry out any repairs necessary within those 30 days.

A consumer may alternatively require a repair or a replacement, but if this cannot be agreed, or the first attempt is not successful, then the customer may be entitled a price reduction, (up to the full price paid) or a final right to reject.

This final right to reject can be subject to a deduction for the use the consumer has made of the goods, which for the Motor Trade would seem to be an improvement on the current position.

Dealers will need to fully understand their revised obligations, and particularly take on board the fact that there may be just one opportunity to repair. It will be essential to get to the bottom of any issues on the first occasion even if that means keeping the vehicle for a couple more days.

Further details and advice will be available once the draft legislation is finalised.

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