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.


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:

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:–limiting-the-jhuti-principle

You will no doubt recall that, back in February, the Pension Schemes Act 2021 (the “Act”) finally became law. The Act changes the pensions landscape quite drastically and one way it did this was to extend the Pensions Regulator (“tPR”)’s contribution notice (“CN”) regime.

What changed in a nutshell?

tPR could already issue a CN, if it was reasonable to do so, where there had been deliberate avoidance of a s75 debt or an act or failure to act materially affected the likelihood of members receiving accrued benefits.

The Act added two new grounds which made it easier for tPR to issue a CN. Very briefly, these are:

  • the “employer insolvency” test which allows a CN to be issued where, immediately after an act or failure to act, if the employer was to suffer a hypothetical insolvency event triggering a statutory s75 debt, tPR is of the opinion that the act or failure to act materially reduced the amount of the s75 debt which the scheme could recover; and
  • the “employer resources” test which allows a CN to be issued where tPR is of the view that an act or failure to act would have reduced the value of the employer’s resources and this reduction is material relative to the estimated s75 debt in relation to a scheme.

Employer resources

We now have draft Regulations, The Pensions Regulator (Employer Resources Test) Regulations 2021. These Regulations are expected to come into force on 1 October 2021 and the Government has made it clear that they will not have retrospective effect. The Regulations set out what constitutes “employer resources” and how they are valued for the purposes of the new CN ground.

Essentially, when considering an employer’s resources, what will need to be considered are the profits of the employer before tax as stated in the employer’s accounts adjusted for non-recurring and exceptional items (i.e. infrequent or unusual items). When categorising an item as non-recurring or exceptional, and considering any value, tPR will have to have regard to the relevant accounting standards published by the Financial Reporting Council.

If there are no suitable accounts (for example, because the employer is not required to prepare annual accounts under the Companies Act 2006), tPR may determine, calculate and verify the value of the employer resources.

In undertaking any assessment and calculations, tPR must take account of all relevant information and, provided it does so, no further verification is required.

How does this fit into the bigger CN picture?

Whilst the employer resources test widens the grounds for imposing a CN, tPR must still establish that it is reasonable to impose a CN (for example, this could include tPR considering a broader assessment of an employer’s strength rather than just the employer resources calculation).

It is also worth noting that, under the new Act, it will be a criminal offence to fail to comply with a CN. However, there is a statutory defence to both the new grounds for a CN: where a person gave due consideration to the act or failure to act and took all reasonable steps to eliminate or minimise the potential for the act or failure to act to have that impact.

What is likely to happen in practice?

In practice, particularly while the employer resources CN ground is new, I expect that employers will pursue the tPR clearance application route more often. This may happen less once more is known about this new test. Employers will be pleased to hear that tPR is working on a revised Code of Practice 12 (Circumstances in relation to the material detriment test), with associated guidance, to set out the circumstances in which it expects to issue a CN. Watch this space! In the meantime, companies may want to ensure that, where a company in its corporate group participates/has participated in a defined benefit pension scheme, they consider the impact of any material business activity on the pension scheme and keep a record of the reason(s) that the decision to proceed with the business activity, having given such pension scheme due consideration, was made.

The Pension Schemes Act 2021 introduces a framework for a new type of pension scheme – collective money purchase schemes. Also known as collective defined contribution or CDC schemes, this type of pension scheme offers a middle path between traditional defined benefit (DB) and defined contribution (DC) schemes.

Employer and member contributions are fixed, as in a DC scheme. However, investment and longevity risks are borne collectively by the members, rather than being borne exclusively by the employer (as in a DB scheme) or exclusively by the individual member (as in a DC scheme). Members are promised a target retirement income, but this can be adjusted up or down to reflect the scheme’s investment performance and other risks as longevity experience.

The government is currently consulting on draft regulations setting out further detail of the legal framework for CDC schemes. The consultation closes on 31 August.

Continue Reading A third way – collective money purchase pension schemes

DC consolidation has been on the Government’s agenda for some time. Now the DWP has published a call for evidence, suggesting that the push to consolidate will be ramped up.

Consolidation involves winding up small DC arrangements and moving active members and accrued DC pots to larger schemes. Typically the chosen destination will be a master trust – a multi-employer occupational pension scheme which operates on a commercial basis. Master trusts are subject to an authorisation and supervision regime run by the Pensions Regulator.

Continue Reading DC consolidation: large is beautiful?

In episode 208 of our Employment podcast, Christopher Fisher is looking at two recent discrimination cases dealing with two important issues – will interim relief remedies be introduced for discrimination claims and will gender-critical beliefs be protected as philosophical beliefs.  One case is from the EAT and one from the Court of Appeal.  You can listen to it here: UK Employment Law | Perspectives & Events | Mayer Brown