Small Business, Enterprise and Employment Bill (HC Bill 117)

(b) the business commences arbitral proceedings about a matter which is,
or which includes, a Pubs Code dispute between the business and the
tenant.

(2) In this section a “Pubs Code dispute” means a dispute—

(a) 5which relates to an allegation by the tied pub tenant that the pub-
owning business has failed to comply with a provision of the Pubs
Code, and

(b) which the tenant would have been able to refer for arbitration by the
Adjudicator in accordance with section 43 (were it not for the
10commencement of arbitral proceedings by the business).

(3) Subsection (4) applies where—

(a) in accordance with the arbitration agreement, the Adjudicator is
appointed to arbitrate the Pubs Code dispute, or

(b) the tied pub tenant wishes the Adjudicator to be appointed to arbitrate
15that dispute, and has given notice to that effect in accordance with
subsections (5) to (7).

(4) The Adjudicator must either—

(a) arbitrate the Pubs Code dispute, or

(b) appoint another person to arbitrate that dispute.

(5) 20Notice under subsection (3)(b) must be given in writing to—

(a) the pub-owning business, and

(b) the Adjudicator.

(6) In a case where the arbitration agreement provides for the arbitrator to be
appointed by a person other than the pub-owning business or the tied pub
25tenant, notice under subsection (3)(b) must be given within 21 days beginning
with the date on which that person notifies the tenant of the person proposed
to be appointed as arbitrator.

(7) In any other case, notice under subsection (3)(b) must be given within 21 days
beginning with the date on which arbitral proceedings commenced.

(8) 30Section 14 of the Arbitration Act 1996 makes provision about the
commencement of arbitral proceedings.

46 Arbitration: supplementary

(1) Subsection (2) applies where a tied pub tenant—

(a) refers a dispute to the Adjudicator under section 43, or

(b) 35gives notice as mentioned in section 45(3)(b) that the tenant wishes the
Adjudicator to be appointed to arbitrate a dispute.

(2) The tenant must pay a fee to the Adjudicator of an amount prescribed in
regulations made by the Secretary of State (except in specified cases as
mentioned in subsection (3)(b)).

(3) 40The regulations may make further provision as to the fee, and may in
particular—

(a) specify when the fee must be paid,

(b) specify cases in which the tenant is not required to pay the fee,

(c) specify cases in which the fee is to be refunded to the tenant.

(4) The following subsections apply in all cases where the Adjudicator or a person
appointed by the Adjudicator arbitrates a dispute.

(5) Except where this Part makes different provision, the arbitration must be
conducted in accordance with—

(a) 5the rules regarding arbitrations issued from time to time by the
Chartered Institute of Arbitrators, or

(b) the rules of another dispute resolution body nominated by the
arbitrator.

(6) The pub-owning business concerned must pay the reasonable fees and
10expenses of the arbitrator in respect of the arbitration, except where—

(a) the arbitration follows a referral by the tenant under section 43, and

(b) the arbitrator concludes that the referral was vexatious.

(7) The Secretary of State may by regulations make provision in relation to the
costs payable by a tied pub tenant in respect of the arbitration, and the
15regulations may in particular—

(a) provide that those costs are limited to an amount prescribed in, or to be
determined in accordance with, the regulations, and

(b) specify circumstances in which the arbitrator may make an award
requiring the tenant to pay costs exceeding that amount.

47 20Information about arbitration

(1) If the Adjudicator appoints another person as arbitrator under section 43(6)(b)
or 45(4)(b), the Adjudicator may require the arbitrator, or the pub-owning
business and tied pub tenant concerned, to provide information to assist the
Adjudicator in carrying out functions under this Part.

(2) 25The Adjudicator may enforce the requirement to provide information by
bringing civil proceedings to obtain an injunction.

Investigations by Adjudicator

48 Investigations

(1) The Adjudicator may investigate whether a pub-owning business has failed to
30comply with the Pubs Code if the Adjudicator has reasonable grounds to
suspect that—

(a) the business has failed to comply with the Pubs Code, or

(b) the business has failed to follow a recommendation made under section
51.

(2) 35The Adjudicator may not carry out an investigation until the guidance
required by section 56(1) has been published.

49 Investigation reports

(1) Following an investigation, the Adjudicator must—

(a) publish a report on the outcome of the investigation, and

(b) 40consider whether to use any of the enforcement powers mentioned in
section 50.

(2) An investigation report must, in particular, specify—

(a) any findings that the Adjudicator has made,

(b) any action that the Adjudicator has taken or proposes to take, and

(c) the reasons for the findings and any action taken or proposed.

(3) 5An investigation report need not identify the pub-owning business concerned.

(4) If a pub-owning business is identified in a report, the business must have been
given a reasonable opportunity to comment on a draft of the report before
publication.

50 Forms of enforcement

(1) 10If, as a result of an investigation, the Adjudicator is satisfied that a pub-owning
business has failed to comply with the Pubs Code, or has failed to follow a
recommendation made under section 51, the Adjudicator may take one or
more of the following enforcement measures—

(a) make recommendations;

(b) 15require information to be published;

(c) impose financial penalties.

(2) Where an investigation concerns two or more pub-owning businesses, the
Adjudicator may decide—

(a) to take different enforcement measures against different businesses,

(b) 20not to take any enforcement measures against one or more of the
businesses.

51 Recommendations

(1) If the Adjudicator chooses to enforce through making recommendations, that
means recommending what the pub-owning business should do in order to
25comply with the Pubs Code, and specifying the time by which the business
should do it.

(2) The Adjudicator must monitor whether a recommendation has been followed.

52 Requirements to publish information

(1) If the Adjudicator chooses to enforce through requiring information to be
30published, that means requiring the pub-owning business to publish
information relating to the investigation.

(2) The publication requirement is imposed by giving the pub-owning business
written notice specifying—

(a) what information is to be published,

(b) 35how it must be published, and

(c) the time by which it must be published.

(3) The Adjudicator may enforce the requirement to publish information by
bringing civil proceedings to obtain an injunction or any other appropriate
remedy or relief.

53 Financial penalties

(1) If the Adjudicator chooses to enforce through imposing financial penalties, that
means imposing a penalty on the pub-owning business of an amount not
exceeding the permitted maximum (see subsection (6)).

(2) 5The financial penalty is imposed by giving the pub-owning business written
notice specifying—

(a) the grounds for imposing the penalty,

(b) the amount of the penalty,

(c) the period within which it must be paid, and

(d) 10how it must be paid.

(3) The pub-owning business may appeal to the High Court against—

(a) the imposition of a financial penalty, or

(b) its amount.

(4) Financial penalties under this section are recoverable by the Adjudicator as a
15debt.

(5) Financial penalties received by the Adjudicator must be paid into the
Consolidated Fund.

(6) The Secretary of State must make regulations—

(a) specifying the permitted maximum, or

(b) 20specifying how the permitted maximum is to be determined.

54 Recovery of investigation costs

(1) The Adjudicator may require a pub-owning business to pay some or all of the
costs of an investigation (including any costs incurred in exercising the
enforcement powers) if satisfied that—

(a) 25the business has failed to comply with the Pubs Code, or

(b) the business has failed to follow a recommendation made under section
51.

(2) The Adjudicator may require a person to pay some or all of the costs of an
investigation if—

(a) 30the Adjudicator carried out the investigation as a result of a complaint
by the person, and

(b) the Adjudicator is satisfied that the complaint was vexatious or wholly
without merit.

(3) A requirement to pay costs is imposed by giving written notice specifying—

(a) 35the grounds for imposing the requirement to pay costs,

(b) how much is to be paid,

(c) by when the costs are to be paid, and

(d) how they are to be paid.

(4) A person required to pay costs under this section may appeal to the High Court
40against—

(a) the imposition of the requirement, or

(b) the amount to which it relates.

(5) Costs required to be paid under this section are recoverable by the Adjudicator
as a debt.

Advice and guidance by Adjudicator

55 Advice

5The Adjudicator may give advice on any matter relating to the Pubs Code to—

(a) tied pub tenants,

(b) any organisation representing the interests of tied pub tenants,

(c) pub-owning businesses,

(d) any organisation representing the interests of pub-owning businesses.

56 10Guidance

(1) The Adjudicator must publish guidance about—

(a) the criteria that the Adjudicator intends to adopt in deciding whether
to carry out investigations,

(b) the practices and procedures that the Adjudicator intends to adopt in
15carrying out investigations,

(c) the criteria that the Adjudicator intends to adopt in choosing whether
to use the enforcement powers and which ones, and

(d) the criteria that the Adjudicator intends to adopt in deciding the
amount of any financial penalty under section 53.

(2) 20In addition, the Adjudicator may publish guidance about the practices and
procedures that the Adjudicator intends to adopt in carrying out other
functions.

(3) The Adjudicator may publish guidance about—

(a) the application of any provision of the Pubs Code;

(b) 25steps that pub-owning businesses need to take in order to comply with
the Pubs Code;

(c) any other matter relating to the Pubs Code.

(4) Before publishing guidance under this section, the Adjudicator must consult
any persons the Adjudicator thinks appropriate.

(5) 30The Adjudicator must publish the first guidance under subsection (1)(a), (b), (c)
and (d) within 6 months beginning with the day on which section 39 comes into
force.

(6) Where there is any guidance in force under this section, the Adjudicator must
take account of it in carrying out functions.

35Adjudicator’s reporting requirements

57 Annual report

(1) After the end of each reporting period, the Adjudicator must prepare and
publish a report describing what the Adjudicator has done during the period.

(2) The report must include a summary of—

(a) 40arbitrations conducted by the Adjudicator,

(b) investigations carried out by the Adjudicator,

(c) cases in which the Adjudicator has taken the enforcement measures
mentioned in section 50, and

(d) cases in which the Adjudicator has exercised functions under the Pubs
5Code in relation to the provision of parallel rent assessments.

(3) If the Adjudicator has made recommendations under section 51, the report
must include an assessment of whether they have been followed.

(4) As well as publishing the report, the Adjudicator must send a copy to the
Secretary of State.

(5) 10The Secretary of State must lay a copy of the report before Parliament.

(6) In this section “reporting period” means—

(a) the period beginning with the day on which section 39 comes into force
and ending with the following 31 March, and

(b) each successive period of 12 months.

15Funding of Adjudicator

58 Levy funding

(1) The Adjudicator may require pub-owning businesses to pay in each financial
year a levy towards the Adjudicator’s expenses.

(2) Before imposing a levy, the Adjudicator must obtain the Secretary of State’s
20consent.

(3) In deciding the amount of a levy, the Adjudicator must take into account any
sums received or expected to be received from other sources.

(4) The Adjudicator may take into account estimated as well as actual expenses.

(5) The Adjudicator may require different pub-owning businesses or different
25descriptions of pub-owning businesses to pay different amounts of levy, but
any differences must be based on criteria broadly intended to reflect the
expense and time that the Adjudicator expects to spend in dealing with matters
relating to different pub-owning businesses.

(6) The Adjudicator must inform each pub-owning business of—

(a) 30the amount of any levy payable by the business,

(b) when payments are due, and

(c) how the levy is to be paid.

(7) A levy required to be paid under this section is recoverable by the Adjudicator
as a debt.

(8) 35The Adjudicator must publish details of levies and an explanation of how the
amounts have been decided (including any criteria under subsection (5)).

(9) If the Adjudicator has a surplus, the Adjudicator may repay some or all of it to
pub-owning businesses.

(10) In subsection (9) “surplus” means money held by the Adjudicator at the end of
40a financial year less liabilities shown in the Adjudicator’s statement of accounts
for that financial year.

59 Loans by Secretary of State

The Secretary of State may make loans to the Adjudicator.

Supervision of Adjudicator

60 Review of Adjudicator and guidance from Secretary of State

(1) 5The Secretary of State must review the Adjudicator’s performance for each
review period.

(2) The first review period is the period beginning on the day on which section 39
comes into force and ending 2 years after the following 31 March.

(3) Subsequent review periods are each successive period of 3 years after the first
10review period.

(4) A review must, in particular, assess how effective the Adjudicator has been in
enforcing the Pubs Code.

(5) A review may consider whether it would be desirable to amend or replace any
regulations for the time being in force under section 46(2) or (7) or 53(6).

(6) 15As soon as practicable after a review period, the Secretary of State must—

(a) publish a report of the findings of the review for that period, and

(b) lay a copy of the report before Parliament.

(7) As a result of the findings of a review, the Secretary of State may give guidance
to the Adjudicator about any matter relating to the Adjudicator’s functions.

(8) 20The Adjudicator must take account of the guidance in carrying out functions.

61 Abolition of Adjudicator

(1) The Secretary of State may by regulations abolish the Adjudicator—

(a) if, as a result of the findings of a review, the Secretary of State is
satisfied that the Adjudicator has not been sufficiently effective in
25securing compliance with the Pubs Code to justify the continued
existence of an Adjudicator,

(b) if, as a result of the findings of a review, the Secretary of State is
satisfied that it is no longer necessary for there to be an Adjudicator to
secure compliance with the Pubs Code, or

(c) 30if the Pubs Code is revoked and not replaced.

(2) The regulations may include provision transferring the Adjudicator’s
property, rights and liabilities.

(3) For the purpose of giving effect to the abolition of the Adjudicator, the
regulations may amend or repeal this Part or any other enactment, including
35an enactment comprised in subordinate legislation within the meaning of the
Interpretation Act 1978.

62 Information to Secretary of State

The Secretary of State may require the Adjudicator to provide information to
assist the Secretary of State in carrying out functions under this Part.

Interpretation of this Part

63 “Tied pub”

(1) In this Part a “tied pub” means premises in relation to which conditions A to D
are met.

(2) 5Condition A is that the premises have a premises licence authorising the retail
sale of alcohol for consumption on the premises.

(3) Condition B is that the main activity or one of the main activities carried on at
the premises is the retail sale of alcohol to members of the public for
consumption on the premises.

(4) 10Condition C is that the premises are occupied under a tenancy.

(5) Condition D is that the tenant of the premises is contractually obliged to buy
from the landlord, or from a person nominated by the landlord, some or all of
the alcohol to be sold at the premises.

(6) In this section—

• 15“alcohol” has the meaning given by section 191 of the Licensing Act 2003;

• “premises licence” has the same meaning as in that Act.

64 “Pub-owning business”

(1) In this Part a “pub-owning business” means a person who is the landlord of 500
or more tied pubs.

(2) 20In the period beginning with the day on which the Pubs Code comes into force
and ending with the following 31 March, a pub-owning business is a “pub-
owning business” for the purposes of this Part if, immediately before the Pubs
Code comes into force, the business was the landlord of 500 or more tied pubs.

(3) In any subsequent financial year, a pub-owning business is a “pub-owning
25business” for the purposes of this Part if, for a period of at least 6 months in the
previous financial year, the business was the landlord of 500 or more tied pubs.

(4) For the purposes of calculating a number of tied pubs as referred to in
subsections (2) and (3), any tied pub of which a subsidiary of the pub-owning
business is the landlord is treated as a tied pub of which the pub-owning
30business is the landlord.

(5) The Secretary of State may by regulations—

(a) amend subsections (2) and (3) so as to substitute a different number of
tied pubs, or a different period, from the number or period for the time
being specified there,

(b) 35make provision in relation to the calculation of the number of tied pubs,
whether by amending subsection (4) or otherwise.

(6) In this section “subsidiary” has the same meaning as in section 1159 of the
Companies Act 2006.

65 “Tied pub tenant”, “landlord” and “tenancy”

(1) 40In this Part a “tied pub tenant” means a person—

(a) who is the tenant of a tied pub, or

(b) who is a party to negotiations relating to the prospective tenancy of
premises which are, or on completion of the negotiations are expected
to be, a tied pub.

(2) In this Part—

• 5“landlord” means immediate landlord,

• “tenancy” means a tenancy created either immediately or derivatively out
  of the freehold, whether—

  (a)

  by a lease or sub-lease,

  (b)

  by an agreement for a lease or sub-lease,

  (c)

  10by a tenancy agreement or sub-tenancy agreement, or

  (d)

  in pursuance of a provision of, or made under, an Act,

  and includes a tenancy at will,

and references in this Part to the landlord and the tenant are to be interpreted
accordingly.

(3) 15Where two or more persons jointly constitute either the landlord or the tenant,
any reference in this Part to the landlord or to the tenant is a reference to both
or all of the persons who jointly constitute the landlord or the tenant, as the
case may require.

66 Interpretation: other provision

(1) 20In this Part—

• “the Adjudicator” means the Pubs Code Adjudicator;

• “arbitration agreement” has the same meaning as in section 6 of the
  Arbitration Act 1996;

• “financial year” means a period of 12 months beginning with 1 April and
  25ending on 31 March;

• “parallel rent assessment” means an assessment of the rent which would
  be payable by a tied pub tenant to the pub-owning business which is
  the landlord of the tied pub if the tenant were not bound by any
  product or service tie (assuming that the tenancy is unchanged except
  30in respect of terms relating to such ties);

• “product or service tie” means any contractual obligation of a tied pub
  tenant—

  (a)

  to buy a product from the pub-owning business which is the
  landlord of the tied pub, or from a person nominated by the
  35business, or

  (b)

  to pay for a service supplied by the pub-owning business, or by
  a person nominated by the business;

• “the Pubs Code” means the regulations under section 40.

(2) In this Part, a reference to a pub-owning business complying with, or failing to
40comply with, the Pubs Code is to be interpreted as a reference to complying
with or failing to comply with—

(a) a provision of the Code with which that business is bound to comply,

(b) a provision of the Code which relates to—

(i) a tied pub of which that business is the landlord, or

(ii) 45negotiations which are expected to result in premises becoming
a tied pub of which that business would be the landlord.

Regulations under this Part

67 Regulations under this Part

(1) Regulations under section 40(1), 42(1) or (7), 46(2) or (7), 53(6), 61(1)(a) or (b) or
64(5) are subject to affirmative resolution procedure.

(2) 5Regulations under section 61(1)(c) are subject to negative resolution procedure.

Part 5 Childcare and schools

68 Funding for free of charge early years provision

(1) In section 13A of the Childcare Act 2006 (supply of information: free of charge
10early years provision)—

(a) in subsection (3), after “provision” insert “or for funding related to free
of charge early years provision”;

(b) in subsection (6), after “provision” insert “or for funding related to free
of charge early years provision”.

(2) 15In section 13B of that Act (unauthorised disclosure of information received
under section 13A), in subsection (2)(b), after “provision” insert “or for funding
related to free of charge early years provision”.

69 Exemption from requirement to register as early years provider

(1) In section 34(2) of the Childcare Act 2006 (requirement to register as early years
20provider) for “three” substitute “two”.

(2) In section 40(1)(b) of that Act (duty to implement Early Years Foundation
Stage) for “3” substitute “2”.

(3) In section 63(3) of that Act (applications for registration on the general
register)—

(a) 25in the words before paragraph (a), for “three” substitute “two”;

(b) in paragraph (c) (as it has effect prior to the coming into force of
paragraph 35(4) of Schedule 1 to the Education and Skills Act 2008) for
“three” substitute “two”.

(4) In section 99(1)(b) of that Act (provision of information about young children:
30England) for “3” substitute “2”.

(5) In section 157(2)(b) of the Education Act 2002 (independent school standards),
(as that provision has effect until the repeal by paragraph 16 of Schedule 1 to
the Education and Skills Act 2008 comes into force) for “three” substitute
“two”.

(6) 35In section 94(5)(b) of the Education and Skills Act 2008 (independent
educational institution standards) for “three” substitute “two”.

70 Childminding other than on domestic premises

(1) Section 96 of the Childcare Act 2006 (meaning of early years and later years
provision etc.) is amended in accordance with subsections (2) to (5).