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September 2008
Company directors as pension trustees: conflicts of interest.
New provisions of the Companies Act take effect on 1st October
Amongst the provisions of the Companies Act 2006 that are
coming into force on 1st October is an obligation upon company
directors to avoid conflicts of interest. One situation in
which conflicts can frequently occur is where a director also
serves as a trustee of the company's final salary pension
scheme.
We first looked at this subject, and the related topic of
indemnifying directors of pension scheme trustee companies,
earlier in the year. However, by way of reminder, copies of
those two briefing notes are available using these links.
February 2008 - Company Directors as pension scheme trustees:
conflicts of interest >>more>>
May 2008 - Indemnifying the directors of pension scheme trustee
companies >>more>>
Particularly if large pensions projects are on the horizon,
companies are urged to consider very carefully the position
of any of their directors (and, in particular, finance directors)
who also serve as pension scheme trustees.
June 2008
Two Important Cases
Employer's appeal against stay in retirement case dismissed
in Johns v Solent SD the Court of Appeal has dismissed
the appeal by Solent SD. Mrs Johns brought claims of unfair
dismissal and age discrimination following her retirement
under the statutory retirement procedure >>more>>
TUPE 2006 - Service provision changes
In Kimberley Group Housing Ltd v Hambley and ors; Angel
Services (UK) Ltd v Hambley and ors the EAT overturned the
tribunal's decision which apportioned liability on a percentage
basis between two companies who had taken over a service provision
contract which was previously performed by one company >>more>>
February 2008
Case update: Court of Appeal decision on agency workers
The Court of Appeal has today handed down judgement in the
much anticipated case of James v London Borough of Greenwich.
The case concerns the highly vexed issue of agency workers
being, or becoming, employees of the end-user business.
Ms James worked for the Council for 5 years via an agency.
Following a period of sickness she was released by the Council
who had been supplied with a replacement agency worker in
her absence. Ms James claimed she was an employee of the Council
and that she had been unfairly dismissed. The EAT, however,
found that she was not an employee.
The James case followed on from other recent high profile
Court of Appeal cases on this issue such as Dacas v Brook
Street Bureau (UK) Ltd [2004] ICR 143 and Cable & Wireless
plc v Muscat [2006] IRLR 354. These cases were viewed as part
of a disturbing trend towards making it easier for agency
workers to claim to be employees and created significant uncertainty
and risk for agencies and their clients. However, James in
the lower courts seemed to be turning back the tide –
and was warmly welcomed by the temporary worker industry and
businesses.
The Court of Appeal today dismissed Ms James’ appeal,
finding that she was not an employee of the Council. They
emphasised that the correct approach to these cases is a factual
analysis by the Tribunals and, crucially, the issue is whether
it is necessary to imply a contract of employment. It emphasised
that this was more than a contract of employment being desirable
or more consistent with the arrangements; it has to be necessary
given the reality of the situation.
The Court of Appeal also reiterated that it was for Government
to deal with any perceived injustice on the part of agency
workers, rather than the Courts. In the meantime, businesses
were fully entitled to choose to use agency workers and they
were not normally to be regarded as employees in disguise.
As a result it will only be in exceptional circumstances
that agency workers can expect to have the rights of employees
and it should create some much needed stability on this issue.
As the Court of Appeal emphasised, businesses are entitled
to choose to use agency workers over employees and it is appropriate
they can do so with confidence.
Whilst this decision is good news for employment agencies
and their clients, it does not mean that there are no risks.
There are a range of steps that those involved can and need
to take to materially reduce the risks of this type of claim
arising, inlcuding ensuring that the arrangements are properly
documented. For more details pleace contact Michael
Bradshaw on 020 7203 5329 or email michael.bradshaw@charlesrussell.co.uk.
June 2007
Increase In Annual Leave - The Latest Proposals
Following the consultation process earlier this year,
the government has today (12 June) issued an update in relation
to increasing minimum statutory holiday entitlement from 20
to 28 days. The latest proposals are:
- To increase the statutory holiday entitlement initially
from 20 to 24 days on 1 October 2007.
- To delay the introduction of the second increase to 28 days
until 1 April 2009 (the previous proposal had been that this
happen in October 2008, but the Government recognised the
cost pressures of this).
- Under the current regime, none of the statutory holiday
entitlement can either be carried over to a new holiday year
or paid in lieu (except on termination). In order to help
employers with transitional arrangements however, the DTI
are proposing that payment in lieu can be made in relation
to the additional 4 days to be introduced in October this
year, until 1 April 2009.
It is estimated that approximately 80% of employers effectively
already give their staff 28 days leave (or 4 weeks in addition
to paid Bank Holidays, which will also satisfy the new entitlement),
and the impact of these proposals on those businesses will
be minimal. For the remaining 20 % however, the estimated
cost will be between £3.3 and £4.4 billion, with
the DTI recognising that the hospitality and retail sectors
will be most affected.
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