The Royal Court of Jersey's decision in Klonowska v The Chief Minister (judgment dated 21 July 2016), the only reported case concerning the Control of Housing and Work (Jersey) Law 2012 (Law), highlights the distinction that can exist under the 2012 Law between business licensing and the employment of individuals with "Registered" status. This status relates to a person who, in essence, needs permission to be employed by virtue of not having lived in Jersey for 10 years or more, not being an "essential employee" for whom a license has been granted or not having lived in Jersey for five consecutive years.
In Klonowska, an application was made to the Population Office for a business license relating to the acquisition of an undertaking and for permission to work within it as Registered staff. Owing to a recent change in the Population Office's policy in relation to persons with Registered status owning undertakings, whilst there was no preclusion on ownership, there was no presumed right for Registered persons to work in such undertakings or to obtain permission to work in such undertakings.
Under the Law, where a business license is granted, it can specify the maximum number of individuals with Registered status who are permitted to work for the undertaking. In this case, the Population Office granted a license subject to a condition, amongst other conditions, that the undertaking is not permitted to engage any Registered staff. The reasons given for the condition included the high demands that may be placed on the island's limited resources through providing work opportunities to persons with Registered status.
The Court paid particular attention to the term "undertaking", taking the view that such reference (as defined at Article 23 of the Law) was to a license holder carrying on a trade, business or service performed for the public, and conditions should distinguish between license holders' participation in running businesses and the engaging of other Registered staff. The Court drew particular attention to the fact that this application was to also participate in running the business, stating that it was counterintuitive to, on the one hand, grant a license to carry on undertakings, whilst precluding license holders from actually engaging in any work in managing, directing or controlling undertakings.
The Court therefore concluded that having a condition such as this in licenses may not, on its own, prevent license holders from working in their respective businesses. It noted that, in particular, these licenses allow the holders to carry on businesses from specified premises within Jersey and that carrying on these businesses cannot be viewed as engaging other Registered persons (i.e. a purported conceptual impossibility whereby such license holders need to engage themselves to provide themselves with their own services). The Court explained further that the term "staff" should actually be read as a reference to persons working for an organisation (i.e. other persons, aside from the business owners).
The case highlights the importance for business acquirers to consider scenarios where distinctions between business acquisition and managing/running the business may arise in the context of the Law and seek legal advice where relevant. Failure to consider these situations can lead to problems further down the line (as seen in this case).
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