New legislation came into force on 31 July 2020 to ensure that employees who are on furlough will be entitled to receive their statutory redundancy payments based on their normal wages, rather than on any reduced salary while on furlough. However, there has been no change to the cap on a week’s pay for the purpose of calculating statutory redundancy pay and, therefore, there is no impact on the overall maximum statutory redundancy payment that an employee can receive.  Prior to introducing the new legislation, the Government had urged businesses to base any redundancy payments on full pay, but it appears that a change in the law was required to ensure this happens in practice.

In addition, the new legislation ensures that various statutory entitlements based on a week’s pay are not based on any reduced pay during furlough, e.g. statutory notice pay and compensation for unfair dismissal. The new rules also apply to contractual notice, if this is not at least one week more than statutory minimum notice.

This legislation, therefore, brings greater certainty to the calculation of a week’s pay for those employees on furlough and ensures such individuals do not lose out financially by having been placed on furlough.

The Pensions Regulator recently published guidance for supervising the consolidation of defined benefit pension schemes into superfunds. The guidance provides an interim framework for the regulation of superfunds, prior to a statutory framework being put in place.

It’s a step towards establishing a superfund industry which could be a viable endgame option for certain schemes in the future.

Continue Reading DB Superfunds – a viable endgame?

On 25 June 2020, the Corporate Insolvency and Governance Bill (the “Bill”) received Royal Assent and on 26 June 2020 CIGA came into force. The restructuring team in Mayer Brown’s London office have previously commented on the different elements of the Bill in a series of blog posts and podcasts. CIGA was swiftly followed by the introduction of The Pension Protection Fund (Moratorium and Arrangements and Reconstruction for Companies in Financial Difficulty) Regulations 2020 (the “Regulations“), which came into force on 7 July and were subsequently amended yesterday on 23 July. Now that CIGA is in force, we take a closer look at the legislation from a pensions perspective.

Continue Reading The UK Corporate Insolvency and Governance Act 2020 (“CIGA”) from a Pensions Perspective

In a world where we can no longer host in person events without following all of the latest government guidelines on social distancing, use of face masks and providing a bucket-load of hand sanitizer, online learning tools such as webinars, podcasts, blogs and vlogs, are having their time in the limelight. With this new era, comes new opportunity. Continue Reading UK Employment Law podcaster Nicholas Robertson hosts pandemic related broadcasts produced by the Employment Lawyers Association and the Industrial Law Society

On Friday 26 June 2020 the UK Government published the Third Direction, which is the legislative update for the Coronavirus Job Retention Scheme. In particular, it implements the flexible working arrangements which are permitted from 1 July 2020 under the Furlough Scheme.

We have now reviewed this Direction in full and provide a summary of the key points for employers, available from MayerBrown.com.

On 16 June, the Pensions Regulator (TPR) updated its COVID-19 guidance for employers and trustees. This includes an extension to measures to help pension schemes navigate the challenges presented by the pandemic, beyond 30 June 2020.

Continue Reading Measures extended to help employers and pension scheme trustees tackle COVID-19 challenges

The UK Government has published further guidance, late on the evening of Friday 12 June 2020, in relation to the Furlough Scheme. In light of this, we have produced an update highlighting the key and important changes that are being made.

To read the full update, please visit MayerBrown.com.

Following the UK Government’s recent publication on the plans for the wind down to the Coronavirus Job Retention Scheme, we have produced a practical checklist to help UK employers look at the changes that need to be considered when preparing to resume business activities with a partial or full return to work.

To download the checklist, please visit MayerBrown.com. It should be read alongside our article, End of the Line: UK COVID-19 Furlough Scheme Update.

 

The European Court of Justice (“ECJ”) has delivered a ruling on the issue of what happens when there is a transfer of an undertaking under the Acquired Rights Directive which involves multiple transferees.

In the case of ISS Facility Services NV v Sonia Govaerts and Atalian NV, ISS held cleaning contracts with the city of Ghent which were divided into three lots. Ms Govaerts was the project manager for all three lots. The contracts were re-tendered and awarded to two new contractors, with one of the contractors taking two of the lots (to which Ms Govaerts was 85% assigned) and the other taking the third lot (to which Ms Govaerts was 15% assigned). The Belgian courts took the view that the transfer qualified as a transfer of an undertaking under the ARD and so the employment of Ms Govaerts would transfer. They then asked the ECJ to rule on whether Ms Govaerts’ employment should be split between the new contractors or whether it should transfer only to the contractor that acquired the lots on which she was mainly employed.

Surprisingly, the ECJ found that the ARD did not prevent an employee’s contract of employment being split into part-time contracts, each in proportion to the extent to which they were assigned to the parts of the business acquired by the transferees. However, the ECJ held, this will only occur if such a division is possible and does not cause a worsening of the working conditions of the individual or have an adverse effect on their rights, which are matters for national courts/tribunals to decide. In addition, the ECJ found that, if a division of the contract is not possible or would adversely affect the rights of the worker, the transferee(s) would be regarded as being responsible for any consequent termination of the employment relationship, even if that termination was initiated by the worker.

The ECJ’s ruling may lead to a change in approach to such situations in the UK, where the current case law does not support the splitting of an individual’s employment across multiple transferees.  This is no doubt influenced by the difficulty inherent in dividing up a person’s employment in a way that does not adversely affect their position.  Given that the transferee(s) would be liable if the employment contract is subsequently terminated, and such terminations would inevitably be by reason of the transfer, the risk for transferees is that these dismissals would be automatically unfair unless an “ETO” (e.g. redundancy) reason can be argued.  As a starting point, transferee employers involved in outsourcings and business acquisitions should investigate carefully the extent to which they have adequate indemnity protection against such outcomes.