Our Employment & Benefits team in Hong Kong produce the “Asia Employment Law: Quarterly Review”, a publication covering 15 jurisdictions in Asia.

In this thirty-third edition, they flag and comment on employment law developments during the third quarter of 2021 and highlight some of the major changes on the horizon.

For other recent commentary from our Hong Kong team, please click here. If you or a colleague would like further guidance on employment and benefits issues in Hong Kong, please contact Duncan Abate, Hong Tran or Jennifer Tam.

The Pensions Regulator (TPR) has published a revised version of its code of practice on contribution notices. TPR has updated the code to cover the two new grounds for issuing a contribution notice – the employer insolvency and employer resources tests. The updated code came into force on 25 November.

Continue Reading Contribution notices – updated Pensions Regulator code of practice

The Pension Protection Fund (PPF) is consulting on its draft levy determination for the 2022/23 levy. The PPF currently has a strong funding position. It therefore intends to set the 2022/23 levy estimate at £415 million, £105 million less than in 2021/22. Around 82% of schemes that pay the risk-based levy will see a levy reduction. The consultation closes on 9 November.

Continue Reading Pension Protection Fund levy – lower levies expected in 2022/23

James Perrott, Counsel at Mayer Brown in the Employment & Benefits practice of the London office, and Head of the firm’s Global Mobility & Migration practice in Europe, comments on the struggle European firms in London are facing to get European lawyers into the UK due to post-Brexit immigration issues. The article “Red Tape, Rising Costs and Travel Woes: How Post-Brexit Rules Are Hampering European Firms In London” published on law.com can be read here: https://www.law.com/2021/10/12/red-tape-costs-and-travel-woes-how-post-brexit-rules-are-hampering-european-firms-in-london-292-97745/

It has been over a year since the new Section 1 requirements came into force.  Following on from our initial Employer Perspectives update in March 2020, this post looks at some frequently asked questions and practical tips on dealing with some of the more tricky requirements.

A quick recap of the law

The law requires that employers now provide written statements of key employment terms to employees and workers whose contracts started on or after 6 April 2020.

In particular, the statement should give detail in writing about any paid leave to which they are entitled; which days of the week they are required to work and, if there can be any variation to this, how that variation will be determined; details of all benefits that will be provided by the employer; details of any probationary period, including duration and any conditions; and any training entitlement provided, including whether it is optional/mandatory and how the cost of this training is to be covered.

This is a “Day 1 Right” and so employers will, in most cases, need to ensure that they are providing employees/workers with written particulars on or before the date on which work begins.

Frequently asked questions

1. Does the obligation apply retrospectively?

No, the obligation only applies to employment contracts entered into after 6 April 2020.  However, there are instances where employers would need to provide a compliant statement to employees and workers whose contracts started before 6 April 2020.  Firstly, these employees and workers are entitled to request a newly compliant Section 1 statement.  If they do so, employers will need to provide this within one month of such a request.  Secondly, if there are any changes made to any of the new information required to be given or the employee or the worker is re-engaged, then an updated Section 1 statement would also need to be provided.

2. If we include a statement specifying the training requirements, and these requirements subsequently change, do we need to issue an amendment each time this occurs?

If requirements subsequently change, this would technically require employers to issue new written statements.   Under the Employment Rights Act 1996, if there is any change to any of the required statutory particulars of employment, the employer must give the employee or worker a written statement containing details of the change at the earliest opportunity and, in any event, no later than one month after the change.  We understand that this can be onerous, particularly with large workforces, which is why we suggest taking the approach of listing the key mandatory training courses and then letting employees know further details will be provided regarding subsequent requirements.

3. What are the consequences for non-compliance?

Employees can only bring a tribunal claim for failure to provide a full section 1 statement if they are also bringing another specified claim in the tribunal, and that other specific claim is successful. The compensation for failure to provide a section 1 statement is capped at two or four weeks’ basic pay, currently £1,088 or £2,176, respectively.

Some practical tips

  • Don’t forget that the workers are now entitled to a section 1 statement.
  • Ensure that your contracts  are compliant with the section 1 requirements – review and update your contracts of employment and worker contracts so that they contain all the information they need.
  • In particular, consider whether there have been any changes to the key particulars since April 2020 (particularly as certain particulars may have changed as a result of Covid-19).  Ask yourself whether you need to make any changes to any reissued contracts.
  • Consider pragmatic options for the more burdensome provisions of section 1, as noted at 2 above in terms of training requirements.

Comment

It is likely that employers will continue to take a pragmatic view of section 1 requirements, given the low financial penalties.  However, reputation as an employer that complies with the most basic of legal requirements is important, regardless of financial penalties.  At a time when many clients are refreshing contracts to reflect post-COVID changes, this a good opportunity to ensure that your employment and worker contracts are section 1 compliant.

The government is consulting on regulations that (a) make changes to the list of employer notifiable events and (b) prescribe the events affecting a DB scheme employer in respect of which a notice and accompanying statement (often referred to as a “declaration of intent”) must be given to the Pensions Regulator (TPR) and the scheme trustees. The regulations are intended to come into force on 6 April 2022.

Changes to the list of employer notifiable events

The regulations remove wrongful trading from the list of employer notifiable events and add two new employer notifiable events:

  • A decision in principle by the employer to sell a material proportion of its business or assets.
  • A decision in principle by the employer to grant or extend a security over its assets where that grant/extension would result in the secured creditor being ranked above the scheme in the order of priority for debt recovery.

New “declaration of intent” requirements

The Pension Schemes Act 2021 will introduce a requirement for employers to give notice to TPR of certain prescribed events in relation to the employer of a DB scheme and to provide an accompanying statement about the impact of the event on the scheme (often referred to as a “declaration of intent”). A copy of the notice and the accompanying statement must also be given to the trustees of the scheme at the same time that they are given to TPR.

The regulations prescribe the following as events in respect of which a notice and accompanying statement must be given to TPR and the trustees:

  • The intended sale by the employer of a material proportion of its business or assets, in respect of which the main terms have been proposed.
  • The intended granting or extending of a security by the employer over its assets which would result in the secured creditor being ranked above the scheme in the order of priority for debt recovery, in respect of which the main terms have been proposed.
  • Where the employer is a company, the intended change of control of the employer, in respect of which the main terms have been proposed, or where a change of control occurs without a decision to do so having been taken, the change of control of the employer.

The regulations also set out the information to be included in the accompanying statement.

The notifiable events regime and the declaration of intent regime are separate and, where an event will give rise to obligations under both regimes, both obligations must be complied with.

The consultation closes on 27 October 2021.

For a more detailed discussion of the proposed changes, please see our legal update.

In this episode of our employment podcast, we look at the recent Court of Appeal case of Gwynedd Council v Barratt and the question of whether (or when) an employer should offer a right of appeal on a redundancy dismissal in order to avoid a claim of unfair dismissal.

Listen to it here: https://www.mayerbrown.com/en/perspectives-events/podcasts/2021/09/do-employers-have-to-offer-a-right-of-appeal-on-redundancy

Employers be aware – big changes to the defined benefit pensions landscape come into force

Some of the biggest changes to the defined benefit pensions landscape in recent years come into force on 1 October 2021. Much has already been made of the provisions of the Pension Schemes Act 2021. Here is a rundown of what comes into force on 1 October (note that these provisions do not have retrospective effect):

Continue Reading Employers be aware – big changes to the defined benefit pensions landscape come into force

In extremely welcome news, the Home Office has recently announced that the Covid-19 adjustment to the Right to Work (“RTW”) check process has been extended again.  Surprisingly, it has now been extended to 5 April 2022.  This is a move that is very much welcomed by employers, particularly in view of the new hybrid working model a number of employers are now implementing.  The Home Office has stated that it has extended the concession following positive feedback received from employers.

Employers may, therefore, continue to check someone’s RTW by either of the following ways:

  1. remotely, by comparing an electronic or paper copy of the individual’s RTW documents whilst on a video call with them. The employer must record the date the check is made and mark it as “adjusted check undertaken on [insert date] due to Covid-19;
  2. with the individual’s permission, using the online RTW service if the individual has one of the following:
    1. Biometric Residence Permit; or,
    2. Biometric Residence Card; or,
    3. status under either the EU Settlement Scheme or the Points Based System.

The employer will need the employee on a video call at the time of using the online RTW check service.

As a reminder, employers are required to carry out the RTW check on:

  • all new employees before they start work; and,
  • all existing employees who have time limited immigration permission which enables them to undertake their role in the UK. The check must be undertaken shortly before their status expires to ensure they have either obtained, or applied for, further immigration permission to enable them to continue to work in the UK.

The Home Office also announced that it is analysing its existing systems and intends to introduce a new digital solution that will enable employers to utilise it for many who are unable to use the Home Office online checking service, such as British and Irish nationals.  The Home Office intends that, in the future, employers will be able to continue to make checks remotely but with enhanced security.  Whether this will be in place by 5 April 2022 remains to be seen, but we recommend employers check the position in March 2022.  Employers should ensure that they are prepared to revert to the full  RTW check process should the Covid-19 adjustment end on 5 April 2022 without the new digital system being in place.

Finally, the Home Office has confirmed that employers will not be required to carry out full RTW checks retrospectively where a Covid-19-adjusted check was carried out whilst the concession was in force during the period 30 March 2020 and 5 April 2022 (inclusive).

In the latest episode of our employment podcast, we look at the recent EAT case of Kong v Gulf International Bank, where a whistleblower claimed that their dismissal was unfair because it had been manipulated by a manager who was not involved in the dismissal process. Listen to it here: https://www.mayerbrown.com/en/perspectives-events/podcasts/2021/09/whistleblower-manipulation–limiting-the-jhuti-principle