With the increased focus on governance of trustee boards and the Pensions Regulator (the “Regulator“)’s expectation of skilled, engaged and diverse trustee boards being led by an effective chair, the selection of the “right” trustees is becoming even more important. As employers will often be responsible for appointing trustees to trustee boards, you will find below four factors employers may want to take into account before appointing any new trustees.
As everyone is aware, there has been and continues to be a line of “Gig economy” cases where the question is whether an individual is engaged as a worker or on a self-employed basis. One such line of cases has related to courier firms, including CitySprint. In 2017, CitySprint lost a claim brought by one of its cycle couriers who was found to be engaged as a worker and so entitled to holiday pay. As a result of that finding, CitySprint put in place a new set of written terms designed to make clear that their couriers were engaged on a self-employed basis and not as workers. E.g., there was a clear acknowledgement that there was no obligation to provide or accept any work, and a clause under which the couriers could provide a substitute.
A new group of CitySprint couriers nonetheless challenged the new terms, once again claiming worker status and holiday pay. They argued that the new terms should simply be ignored because nothing had changed on the ground in terms of how the work was performed. The tribunal disagreed. The new terms were not a sham and could not simply be ignored. They were a core factor to be analysed in the worker/self-employment test. Nonetheless, having analysed the terms, the tribunal judge came to the same conclusion as in 2017, namely that the couriers were engaged as workers. There was significant focus on the right to provide a substitute but, ultimately, the judge concluded that this was a theoretical right that would never realistically be exercised. Interestingly, this was despite the fact that CitySprint allowed the couriers to use unregistered riders (rather than pre-registered riders) to perform their jobs.
CitySprint’s alternative argument was that the couriers had already received any holiday pay to which they were entitled because the new terms included a “rolled up holiday pay” clause – i.e. a clause stating that payments received by the couriers would be deemed to include any holiday pay to which they were entitled. The judge said that, while a rolled up holiday pay clause might be effective, it needed to be drafted sufficiently clearly in order for it to work. Here, that was not the case: there was no amount specified as referable to the holiday pay or the holiday pay period, and no formula set out under which the amount would be calculated.
With some similarities to the Uber litigation, we can see the courts here willing to look past a carefully drafted set of terms providing for self-employed status and focusing instead on how the relationship works in practice. In the end, the judge concluded that the dominant feature of the CitySprint contract remained personal performance by the couriers and there was no sense in which they were in business on their own account. Although they earned other income elsewhere, that was not as a cycle courier for other firms.
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.
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.
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.
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.