Archive for the ‘Legislation’ Category
Sick leave is no holiday!
This issue of holiday entitlements and sick leave is a perennial favourite. It’s a classic case of playing catch up with fast moving (at least for Europe) changes in employment law. We seem to be unable to get any clarity in the UK legal system and progress is very much a zig zag rather than a straight line.
Those kind legal types at Wedlake Bell LLP have issued a useful article on a recent Tribunal case regarding the ability to “roll over” unused holiday entitlements when an employee is off sick. You can click through to the article here.
You’ll see it’s all still a bit of a muddle. Let caution be your watchword and take appropriate advice.
Steve Clark
If FTSE 100 employers can mess up pensions this badly what hope is there for us?
My wife Sue has recently been made redundant by the drug company AstraZeneca. This morning we got a letter from AstraZeneca letting us know that they had not paid enough into Sue’s pension while she was on maternity leave. It seems they had only paid their contributions based on her reduced maternity pay rather than her full pay before her leave. All in all it seems that over 900 people like Sue were affected.
When you take into account the internal cost of reviewing the mistake and the cost of compensation I’m sure it’ll run into hundreds of thousands of pounds.
The reaso
n that the AstraZeneca letter struck a chord is that I’ve spent the last couple of weeks advising employers about their duties under the new pension rules. Re-reading the detailed guidance issued by The Pensions Regulator has driven home the scale of the work that’s going to be required for employers to comply.
Take for example the task of identifying your workers. Not as easy as it sounds if you use self-employed contractors, agency workers or have non-executive directors, volunteers or Trustees.
Then you have to split your workforce between three categories of “jobholder” as the civil servants have called them. Then you’ve got make sure that you know when one of your jobholders moves category so you can make sure you do the right thing. I have included a graphic below from the The Pensions Regulator guidance just to give you a flavour:
It’s going to take a major change not only to HR and Payroll systems but also an Employer’s internal processes to track all these coming and goings. So, in essence, the new Rules are as much about compliance as they are the headline extra pension costs.
And that brings me nicely back to the AstraZeneca letter. Whilst it’s nice to get the compensatory payment they’ve made; it shows how badly wrong one of the top 100 quoted companies can get a simple change in process so badly wrong.
The changes required for the new pension rules dwarf the changes that AstraZeneca 
should have made to their maternity policy back in 2003. For smaller employers with limited resources it’s a daunting task. A survey of HR and Finance Directors in June 2011 found that over 40% of those questioned had no idea of the deadline for complying with the new rules.
In the words of the author of the report “It’s heading for a car crash”.
That’s why we’ve already started to plan out the compliance project with our clients. For some the start date is just over a couple of years away.
It’s not too late if you haven’t done anything yet. Click here to contact us set up a meeting as soon as possible.
Steve Clark
Employment Law Round Up
In our day to day work we have to read a huge amount of technical information to stay up to date with the latest developments. We like to share anything that we find useful with our clients, connections and followers.
The latest bulletin that we have received is from those very nice people at the law firm Herbert Smith LLP. It’s their Round Up of Employment Law Developments for June 2011. You can click through to the bulletin here.
There is a useful slant on the Default Retirement Age and some useful catch up on the Bribery Act that’s just come into force.
It’s well worth a read as a quick catch up for issues that you may need to know about.
If you need any help after you’ve read the bulletin please contact us here.
Spring cleaning for pensions
It’s that time of the year when the daffodils are beginning to break through and thoughts turn to a spring clean after the deep dark winter. And this is as true in the pensions world as anywhere else!
We have been reading an excellent publication from Squire Sanders entitled “Spring Clean Your Pension Scheme”. You can click through to the document here. It’s a really good catch all of the issues that an employer or Trustees should be looking at for their pension scheme. Some of the issues only apply to Defined Benefit schemes and others to Defined Contribution and Defined Benefit schemes.
Pension Input Periods
The piece on Pension Input Periods will affect anyone that pays into a registered pension scheme. We have been doing some work lately for owner managers amongst our clients and the issue of Pension Input Periods is one that needs some careful examination – especially for people that have earned over £130,000 over the last three tax years. Getting it wrong could result in a tax bill for the member.
We hope that you find the publication interesting and a useful prompt if you haven’t been getting advice on these subjects from your usual source. If you are a pension scheme Trustee reading this should count towards your Trustee Knowledge & Understanding programme.
Lord Hutton’s 27 Recommendations
It’s been another very busy day on planet pensions! As we mentioned last week the Independent Public Services Pensions Commission under Lord Hutton has issued it’s final report.
Professional Pensions have done an excellent summary of the 27 recommendations made by the Committee. You can click through to the article here.
In short Hutton has recommended a move to a Career Average Revalued Earnings Scheme for future service across the public sector. He is strongly of the opinion that promises made under the current structure should be protected. That means older longer serving employees will still get the promises they have been given if the government protects the past service element.
So the main impact will be felt by younger employees or those with little past service. Interestingly he has also recommended that future public servants should not be given access to Defined Benefit scheme so we probably have to look forward to some form of Defined Contribution arrangement for new joiners.
Like all these things the devil is in the detail. We’ll be reviewing the contents over the next few days and no doubt there’ll be further articles on the subject.
One thing is for sure that something has to change if the public service pension promises are to remain affordable for future generations. It is a brave government that has decided to grasp this particular nettle rather than, like their predecessors, bounce the problem down the line.
These reforms must also dovetail with the changes to the Basic State Pension to ensure a uniformity of approach. It’s going to be a busy time over the next few years.
As is always the case…….watch this space!