UK: UK Employment Law Update

Last Updated: 25 October 2001

The government has recently announced proposals in three areas of employment law:

Proposals to Strengthen the Corporate Governance Framework for Boardroom Pay

The government has today (19th October) announced proposals which will require quoted companies to:

  • publish an annual report on directors’ remuneration;

  • disclose individual directors’ remuneration packages and the role and policy of the remuneration committee together with specific disclosures relating to a company’s performance; and

  • put the remuneration report (but not individual pay deals or individual elements in pay packages) to the vote at the annual general meeting.

Institutional investor bodies have welcomed the announcement as a further move to provide greater transparency and accountability on directors’ pay. However, in some ways the proposals for greater transparency and accountability do not go much further than putting current "best practice" onto a statutory footing.

Parental Leave - Final Government Proposals for Change

On 18th October the government published a summary of its proposals for changes to parental leave following the ending of the period of consultation on draft regulations in August.

The government has confirmed that it will:

  • extend the right to parental leave to all parents with children aged under 5 as at 15th December 1999. (Leave was previously only available to parents of children born on or after 15th December 1999 and this had been challenged as unlawful before the ECJ.) However, these parents must take the leave over a period of 3 years and 3 months from the date of the regulations - this is the amount of time it would take to use up the entitlement if the fallback scheme (of a maximum of 4 weeks leave a year) applies. The 3 year and 3 month time limit will not apply where the child is disabled, in which case parents can take their leave entitlement up to the child's 18th birthday (this is the only significant change to the original proposals);
  • extend unpaid parental leave from 13 weeks to 18 weeks for parents of all disabled children under 5 as at any point on or after 15th December 1999 - and such leave can be taken at any time up to the 18th birthday;
  • provide that the one-year qualifying period will include time spent working for a previous employer. The original draft regulations provide that parents would be deemed to have the necessary year's service even if they hadn’t been with their current employer for a year, provided they had accrued a year's service with any previous employer since 15th December 1998 - i.e. once they have accrued the right, it travels with them to a new job. The draft regulations require employees to give notice of the period of previous employment and such evidence as the employer reasonably requires before they are allowed to exercise their entitlement.

There will be no change to:

  • the 21-day notice period. Views were sought about increasing the notice requirement to 28 days - the responses to the consultation were broadly in favour of this (but with shorter notice for parents of disabled children), but the government had always intended only to change notice periods at the same time as the notice periods for maternity leave etc are harmonised (which is proposed for 2003);
  • the unpaid nature of parental leave.

Given the limited change in the proposals, it seems likely that the final Regulations should be enacted in the near future.

Proposed Amendments to TUPE

In September the DTI finally published a consultation paper setting out proposals for possible amendments to TUPE. The consultation process ends on 15th December 2001. Draft regulations will then be published for further consultation and the government plans to lay the Regulations before Parliament in summer 2002, with a period of grace before they come into effect (the period of grace will be longer in respect of any change to occupational pensions rights).

The headline proposals are:

  • options for new rules as to when TUPE applies, particularly in contracting-out cases;
  • proposals for better protection of occupational pension rights;
  • greater flexibility when applying TUPE to transfers of insolvent business (enabling changes to terms and conditions connected to the transfer to be agreed with employee representatives in certain circumstances and providing for the DTI National Insurance Fund to meet limited accrued employment liabilities in respect of employees who do transfer to a transferee);
  • clarification on the extent of protection against transfer-related dismissals, in particular the "ETO" defence;
  • making it clear that TUPE does not preclude transfer-related changes to terms and conditions where the changes are made for an ETO reason;
  • and, a legal requirement for the transferor to give the transferee proper notification about the rights and obligations being transferred.

"© Herbert Smith 2002

The content of this article does not constitute legal advice and should not be relied on as such. Specific advice should be sought about your specific circumstances.

For more information on this or other Herbert Smith publications, please email us."

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