Pension – (even) more change:

WynLewis

Pension – (even) more change: On 1 October 2012, millions of workers benefited from the obligation on certain large employers (smaller employers will be gradually affected over the next 6 years) to make pension contributions for their staff, who must be automatically enrolled in a company scheme or the National Employment Savings Trust (known as NEST).  The arrangements are complex, but in summary, contributions will begin at a low level, they will rise to 4 per cent of salary from workers, 3 per cent from employers and 1 per cent from tax relief in October 2018, making a total of 8 per cent of salary.  Workers have the right to opt out immediately if they do not want to save into a pension for whatever reason, but employers have no right to encourage, or even force them to opt out.  The aim is to place a greater responsibility on individuals to make arrangements for their retirement.  The fact that people can opt out may, however, result in the take-up being less than anticipated or desired, given that the consequence of being signed up is that lower paid workers will end up with a lower net income now (even though they may get a higher pension later).  The Government intends to review developments on an ongoing basis.  Employers should, by now, have made auto-enrolment arrangements, or be making auto-enrolment arrangements for the time when they will have to participate in the scheme.

Employment Law Reforms (2)

WynLewis

On 14 September 2012 the UK Government published the results of two recent calls for evidence (i.e. requests for comments from stakeholders about what to do next).  The first covers the proposal that there be compensated no-fault dismissals (which will now be abandoned).  The second covers the effectiveness of TUPE 2006 (which the Government is thinking about and will put forward for consultation shortly).  The main thrust of the TUPE consultation is to consider whether the “service provision change” element has gone too far and should change.  Given that the service provision change aspect seems to have bedded down nicely in quite a short period, this has all of the hallmarks of ongoing confusion after 31 years of confusion since TUPE 1981.

Employment Law Reforms (1)

WynLewis

Shortly after being elected, the Coalition Government identified the reform of employment law and the workings of the employment tribunal system as a priority.  Its rationale is to reduce costs and red tape, so that businesses can be confident about recruiting and dismissing (where necessary) while growing, without the risk of costly (misconceived or mischievous) employment tribunal claims.  As part of this programme, on 14 September 2012 the UK Government issued 2 new consultation papers.  The consultation papers propose (1) new (simpler and much shorter) employment tribunal rules; (2) a reduction to the cap on unfair dismissal awards (by reference to a complicated and, as yet, undecided formula); and (3) the greater use of compromise agreements (to be renamed “settlement agreements”) to end employment quickly (these have grown out of the “protected conversations” suggestion that turned out to be something of a damp squib).  The Consultation period ends on 23 November 2012.  That said, the Government’s response after the end of consultation periods has tended to be unpredictable and has depended on other factors and political expediency – and the current party political season this may slow things down.