What are the special considerations for DB schemes?
- Before any agreed reduction in wages, actual changes to earning patterns (loss of overtime, for example) may impact the pensionable salary as defined under the scheme rules, with knock-on effects to a number of benefit calculations, such as death in service benefits.
- Contractual changes to member salaries may adversely impact accrued benefits as the final salary figure may be reduced to a greater or lesser extent depending on the duration of furlough and the severity of any reductions in wage, and hence reductions may be difficult to agree with staff.
- Reducing employer contributions will be subject to a number of the same considerations applicable to a DC scheme listed above. There will also be a need to change the rules and interact with the trustees, although it may be possible to override the rules with a direct contractual agreement with members.
- Reducing employee contributions will also depend on the scheme rules, particularly as to whether there are any discretionary powers to suspend contributions, or pensionable service.
- The rules will need to be considered for any unexpected consequences of furlough: depending on the wording of the rules, furlough may or may not be considered a leave of absence and may or may not have the effect of terminating pensionable service. This could have far-reaching consequences.
- In particular, if the workforce’s pensionable service is inadvertently terminated as opposed to suspended in accordance with any relevant rule, this could trigger a statutory employer debt on an employer participating in a multi-employer scheme, if pensionable service continues for employees of other employers. This sort of issue is unlikely to be spotted until after the event, and therefore difficult to untangle. However, an employer should be able to take advantage of the “period of grace” provisions by notifying the trustees of its intention to re-admit employees to pensionable service within the next 12 months.
- Clearly the impact of the Coronavirus Job Retention Scheme on DB schemes is complex and legal advice should be sought before any changes are considered.
Related FAQs
If such testing is regarded as a “reasonably practicable step” which has been identified as an appropriate control following a risk assessment then it is something you can do.
Although you can’t physically force someone to have something intrusive done, this is very likely to be a reasonable management instruction and therefore if someone refuses to have this done as a condition of entry into the work place then disciplinary action may follow.
Where this is something that is required of employees, employers should be letting their staff know that this is one of a number of measures that are being introduced into the workplace for their own safety. If the employer can explain, in advance of the return, why temperature checks need to be taken, what the consequences of the results will be- i.e. will they be sent home if over a certain temperature, whether this data will be stored (and if the sole purpose is to determine whether or not they are fit to attend work on a particular day then why are they being stored), and the fact that temperature checks are a requirement of entry to company premises for everyone, then there shouldn’t be significant resistance to this measure.
Large scale temperature checks have in some businesses become part of the “new normal” working environment.
Arrangements for end point assessments can be modified or rescheduled. End point assessment organisations should engage with External Quality Assurance Providers to agree arrangements for the end point assessments where face-to-face assessments are being modified. Where rescheduling is required due to Covid-19 issues and there is a specified time limit for the ESA post gateway, a further pause of 12 weeks is allowable. This should be recorded by the training provider in the ILR.
An amendment to the Civil Procedure Rules’ Practice Directions has been approved by the Master of the Rolls and the Lord Chancellor on 1 April 2020, and is now Practice Direction 51ZA. This has the effect of allowing the parties to extend by prior written agreement up to a maximum of 56 days (rather than the usual 28 days detailed at CPR 3.8(4)) any rule, practice direction or order provided that any extension does not put at risk any hearing date. This Practice Direction will cease to have effect on 30 October 2020.
Additionally each regions’ Designated Civil Judge (DCJ) has issued a Covid-19 Protocol. There are some minor variations between the regions, but overall the guidance is very similar.
In Northumbria, Durham and Teesside the DCJ guidance for multi-track cases provides that “The parties are at liberty to extend, by consent, any step in the timetable up to a maximum of 90 days (as opposed to the present limit of 28 days)” and the Court does not need to be notified if the Trial date is not effected. Where Trial windows are likely to be impacted due to Covid-19 and the parties are in agreement to extending this, a letter can be sent to the Court with a draft order proposing a new timetable, including a new trial window and agreed availability within the trial window.
The same guidance also confirms that an electronic signature on all documents including witness statements and disclosure statements will suffice.
All organisations have underperformers. Capability is a potentially fair reason to dismiss and is separate to any redundancy procedures.
Generally, capability falls into either absences through illness or underperformance in the role. Those who are absent through sickness can be furloughed, but when furlough comes to an end they will need to go back onto sickness. If you are looking to tackle absence then you need to tackle long term and short term absence in a different way.
Long term absence: You need to establish whether the employee is able to return to work (with or without reasonable adjustments) in the medium term. This requires medical opinion and be careful of disability issues. Reasonable adjustments are likely to be important.
Short term absence: You will need to demonstrate that you have fair absence triggers in place and there is normally be a 3 stage procedure: warning and final warning followed by dismissal on notice. Each stage needs a fair procedure, with written information, a fair hearing and the opportunity to appeal. Be careful of disability issues.
As for underperformance: To tackle this, you will need to have clear SMART objectives in place and evidence of the employee failing to meet these. There would then normally be a 3 stage procedure: warning and final warning followed by dismissal on notice. Each stage needs a fair procedure, with written information, a fair hearing and the opportunity to appeal.
Yes. Their contracts can be renewed or extended during the furlough period without breaking the terms of the scheme.
If the employee’s contract has not already expired, the contract can be extended or renewed. The employee may be furloughed provided that they were employed on or before 30 October 2020. You must also have made a RTI submission to HMRC between 20 March 2020 and 30 October 2020.
If the employee’s contract expired on or after 23 September 2020, the employee can be re-employed and furloughed. Please note that the employee must have been employed by you on 23 September 2020 and you must have made a RTI submission to HMRC between 20 March 2020 and 30 October 2020.