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A B C D E F G H I J K L M N O P R S T V W Y

Employment

Failure to pay enhanced shared parental pay is not direct sex discrimination
Friday 13th April 2018

At a time when the government is trying to persuade more parents to take shared parental leave the Employment Appeal Tribunal (EAT) has decided that there was no direct sex discrimination when an employer did not pay a man on shared parental leave enhanced pay equivalent to the enhanced maternity pay it paid to a woman on maternity leave for the same period.

In overturning the Employment Tribunal’s (ET’s) decision, the EAT in Capita v Ali decided that focus had to be on the purpose for the respective types of leave and that to understand that involved an examination of the European and domestic legislation. As a result, the EAT decided that the purpose of maternity leave and shared parental leave are different. Shared parental leave is for the purpose of caring for the child whereas maternity leave is to protect the health and wellbeing of a woman during pregnancy and after childbirth. Addressing the issue that women on maternity leave care for their babies the EAT went on to state that, “that is not the primary purpose of such leave. By contrast, the purpose or reason for shared parental leave is for the case of the beneficiaries’ child.” The EAT emphasised the difference between the purpose of both types of leave when it said that the fact that “maternity leave and pay are provided not or not other than incidentally for childcare is illustrated by the fact that a pregnant woman is entitled to those maternity benefits before the birth of a child.”

Contrary to the ET’s decision, the EAT decided that the correct comparator for a man on shared parental leave was not a woman on maternity leave, rather it should have been a woman on shared parental leave. Furthermore, it found that payment of maternity pay at a higher rate was lawful as it amounted to special treatment afforded to a woman in connection with pregnancy or childbirth under the Equality Act

Working Families, who intervened in this case, raised a possibility, that “…after a period of 26 weeks (or ordinary maternity leave) the purpose of maternity leave may change from the biological recovery from childbirth and special bonding period between mother and child. At that point it may be possible to draw a valid comparison between a father on shared parental leave and a mother on maternity leave.” The EAT noted that while a “claim based on such facts may well give rise” to such a  comparison and highlighted that “The policy of European and domestic law has been to encourage participation of the father in care for his child” it is a matter for parliament; the Courts’ role being to interpret legislation, contracts and policies.

As matters stand, the EAT has made it clear that the pay and the level of pay associated with maternity leave and shared parental leave is inextricably linked to the purpose of that leave, which are both different.

Is this a thorn in the government’s side in its attempts to encourage more parents to take shared parental leave? Where employers who offer enhanced maternity pay aren’t legally obliged to offer the same level of pay to those on shared parental leave I think it’s unlikely that many more parents, will look to take shared parental leave.

So, will the government address this issue?

With the current focus on Brexit it seems unlikely that re- evaluating the purpose of additional maternity leave (the balance of 26 weeks after ordinary maternity leave) will be a priority for the government in the short term despite the potential impact it may have on encouraging more parents to take shared parental leave. As shared parental leave is one of the government’s mechanisms to encourage diversity in the workforce and to tackle the gender pay gap it may have to think of other ways to achieve those aims.

To find out more on the topic, please contact Susan McKenzie on 0151 600 3157 or via email


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Consultation on National Minimum Wage Rates
Friday 6th April 2018

In his July 2015 budget the then Chancellor, George Osborne, announced that the National Living Wage (the minimum wage rate payable to workers aged 25 and over) would rise by 2020 to £9 per hour, which was expected to be 60% of median earnings. The recent rise to £7.38 with effect from 1 April 2018 still leaves us some way behind that £9 target.

To get close to the former Chancellor’s target of £9 by 2020 will require significant annual increases in 2019 and 2020. Clearly, employers need some understanding of the likely rate increase to enable future financial planning.

Employees in lower paid roles have faced years of falling real wages since the financial crisis as living costs increase and campaigners are targeting annual shareholder meetings of major retailers in particular to put pressure on large employers so that improvements on rates of pay are at the top of the agenda. However, some employers, in particular those in the social care and hospitality sectors, have already expressed concern about the impact that the increases in NMW and National Living Wage (NLW) are having and are likely to have on their businesses. 

The Low Pay Commission, the independent body that monitors the effect of the minimum wage and provides advice to the government, has launched a consultation into minimum wage rates.

The focus of the consultation will primarily be on 3 areas:

  • what the minimum wage rates should be from April 2019 to allow it “to advise on the best path towards a target- 60 per cent of median earnings by 2020.” As part of this they would like views on:
  • whether the to the ‘on target’ rate for 2019- currently about £8.20 is affordable and what effects it would have;
  • what impact the NLW increase have had since introduction; and
  • the economic outlook generally.
  • whether as per a Taylor Review recommendation there should be a higher wage for non-guaranteed hours (e.g. zero and short hours contracts) as well as looking into a different way of tackling one of the perceived risks for those with uncertain and unpredictable work schedules, so- called ”one sided flexibility”; and
  • youth and apprentices rates.

The consultation closes on 1 June 2018. For more details see “Low Pay Commission consultation 2018"

If you have any queries about minimum wage enforcement or any issues that arise from the impact that minimum wage increases may have on your business then please don’t hesitate to contact either Joseph Shelston or you usual contact in the Brabners Employment team


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Employee with “pre- cancerous” condition was deemed to be disabled
Friday 6th April 2018

Those of you familiar with the Equality Act 2010 will know that under Schedule 1, paragraph 6 cancer is a “deemed” disability. In practice, this means that cancer is automatically to be treated as a disability and the individual is deemed to have a disability from the point of diagnosis without the need to satisfy the various elements of the statutory test.

In Lofty v Hamis (t/a First Café) the Employment Appeal Tribunal decided that the Claimant who had been diagnosed with a type of skin cancer which had been described in medical evidence as “pre- cancerous” and “in situ cancer” was suffering from cancer and was therefore deemed to be disabled under the Equality Act 2010.

By way of background, the Claimant brought a claim in the Employment Tribunal for unfair dismissal and disability discrimination. The Tribunal decided that she did not have cancer and that she was not “deemed” to be disabled. The Tribunal went on to consider whether the Claimant otherwise satisfied the definition of disability under the Equality Act and decided that she did not. This meant that she did not benefit from the protection afforded by the Equality Act 2010. The Claimant appealed against the Tribunal’s decision.

The EAT decided that the Claimant had cancer and was therefore deemed to be disabled.

The Tribunal was criticised for failing to demonstrate engagement with the medical evidence in its judgment. Medical evidence about the Claimant’s condition had been presented to the Tribunal for it to consider when deciding whether the Claimant was disabled. The condition was described by her GP in a number of ways, including, as being “a precancerous condition…” and in a supporting leaflet from leaflet from the British Association of Dermatologists as “…one type of the earliest stage of a skin cancer called melanoma… a type of melanoma called ‘in situ’ melanomawhich means that it has “…not had the opportunity to spread anywhere else in the body.”

In reaching its decision the EAT stated that, “When determining whether a condition satisfies the deeming provision of paragraph 6, there is no justification for the introduction of distinctions between different cancers or for an ET to disregard cancerous conditions because they have not reached a particular stage.” Further stating that, “…it requires only that the Claimant has cancer.” The judge also made it clear, however, that, “it is not sufficient that they might develop a relevant condition in the future.”

Whilst in this case of a particular type of skin cancer the diagnosis of pre- cancerous cells meant that the Claimant was suffering from cancer and was therefore disabled, the EAT made it clear that a diagnosis of pre- cancerous cells somewhere else in the body might mean something different.

So what does this mean for employers?

Practically speaking, while a condition labelled “pre- cancerous” might not always amount to cancer, medical evidence on the point will be critical. Employers should therefore err on the side of caution when dealing with an employee who has such a diagnosis, seek expert medical opinion and legal advice before taking any action against the employee.

We have been discussing issues like this and how to support employees with cancer in the sessions we have been delivering in partnership with Maggie’s Merseyside at Clatterbridge. To book a place at one of the workshops please click here

For more information on the subject please contact Susan McKenzie or a member of our Employment team


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New statutory pay rates in force
Friday 6th April 2018

It’s that time of the year when new statutory pay rates come into force.

As of 6 April 2018 statutory sick pay has risen from £89.35 per week to £92.05 per week.  

The rates for statutory maternity, paternity, adoption and shared parental pay increased from £140.98 per week to £145.18 per week with effect from 1 April. On the same date the new rates for the National Minimum Wage and the National Living Wage came into force. 

Find out more on the topic by contacting a member of our Employment team or Paul Ryman directly. 

 


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National Minimum Wage Enforcement
Wednesday 28th March 2018

National Minimum Wage enforcement is in the headlines again as well-known brands and companies have been named and shamed and fined for not paying staff the National Minimum Wage.

As those who attended our Employment Law Updates in late 2017/ early 2018 will know, there is a renewed government focus on employers who are failing to honour National Minimum Wage (NMW) laws. Sir David Metcalf, who heads up HMRC’s NMW enforcement team as Director of Labour Market Enforcement, is promising tougher action.

There is a recognition that action against employers is currently patchy. With the proportion of the workforce covered by the minimum wage set to increase from 5% to 14% by 2020 greater enforcement resources and tougher penalties appear inevitable.

So how is non- compliance currently enforced?

NMW is enforced by HMRC. Enforcement is initiated either by a complaint from workers or third parties or as a result of targeting particular low paying sectors. Officers can carry out inspections at any time, without providing a reason and can require employers to produce records and provide other relevant information.

Generally failure to pay NMW is dealt with by civil enforcement. If a Compliance Officer concludes that NMW has not been paid they may issue a notice of underpayment. This is a combined notice which will set out the arears of NMW to be paid together with a financial penalty to be paid to the state within 28 days of service. The notice is non-negotiable. A notice will be issued if there are arears outstanding, regardless of any explanation provided (e.g. if the underpayment was accidental) or where the employer has taken steps to partly repay the arrears.

What is the penalty for non- compliance?

The financial penalty has become increasingly severe, and has been increased twice in recent years. On 1st April 2016 the penalty was increased to 200% of the total NMW underpayment with an overall maximum penalty of £20,000 per employee. Like a parking fine, there is a 50% discount for complying with the notice within 14 days of service.

If the employer does not comply with the notice of underpayment, the enforcement officer can issue proceedings in the civil courts or employment tribunal to recover the sums due. If following judgment the outstanding NMW remains unpaid, HMRC will take steps to enforce the figure as a debt. If an employer is persistently non-compliant a criminal prosecution can be brought.

The employer can appeal against a notice of underpayment to an employment tribunal but must do so within 28 days of the issue date. The employer should not assume that they do not have to appeal because they have an ongoing dialogue with HMRC.

Naming and shaming: damaging to an employer’s reputation

Employers should act with particular caution considering the naming and shaming regime. Once the notice of underpayment is issued, or after an unsuccessful appeal, HMRC will refer the case to BEIS to consider naming the employer. The employer then has 14 days from HMRC’s case closure letter to make written representations against being named. If BEIS does not receive or does not accept the representations then the employer will be automatically named in a BEIS press notice.

Even those who have inadvertently paid less than the minimum wage will be named and shamed. BEIS will only refrain from naming an offending employer in limited cases, for example if a risk of harm to a named individual or family arises. It will not name an employer if it is not in the public interest to do so. Damage to the employer’s reputation alone will rarely - if ever - suffice as a reason for withholding them from the name and shame list.

Enforcement of NMW is unique - BEIS publically names and shames companies who pay staff below NMW. The list of named employers is widely reported. The names of those included on the list can be wide and varied; from large household names to hairdressers and bakeries. Over 1,000 companies have been named and shamed since October 2013 and the impact can be very serious to reputation.

What does the future hold for NMW enforcement?

The big question is likely to be whether the Director of Labour Market Enforcement obtains the additional resources he is asking for. If he does manage to secure extra resources, enforcement can be applied more consistently.

If low pay becomes a core issue across the political spectrum - it is key for Labour and the Trade Unions but also a point of focus in respect of the Conservatives’ commitment to the JAMs (those “just about managing”) - then the request for those resources may be actioned, particularly given that the increased penalties represent a valuable revenue stream at HMRC.

For more information on the topic please contact a member of our Employment team or Joseph Shelston on 0151 600 3162 or via email.


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Safeguarding: Supreme Court dismisses head teacher’s appeal
Thursday 22nd March 2018

In Reilly v Sandwell Metropolitan Borough Council [2018] UKSC 16, the Supreme Court considered an employment tribunal’s decision that a school had acted reasonably in dismissing a head teacher for failing to disclose her association with an individual convicted of possessing indecent images of children.  

The Facts

In 1998 Ms Reilly met Mr Selwood and they became close friends. In 2003 they bought a property as an investment in their joint names and set up a joint bank account out of which to pay the mortgage instalments.

In February 2009 the investment property was raided by the police and, Ms Reilly witnessed the arrest of Mr Selwood on suspicion of having downloaded images of children online. One month prior to Mr Selwood’s arrest, Ms Reilly had applied for the head teacher position at Sandwell. During the progress of her application, Ms Reilly never disclosed Mr Selwood’s arrest. Ms Reilly took up the post on 1 September 2009.

In February 2010 Ms Reilly became immediately aware of Mr Selwood’s conviction of making indecent images of children by downloading them onto his computer. However, she decided not to disclose it to the governing body of the school or to Sandwell. Instead her close relationship with Mr Selwood continued and, in April 2010 they went on holiday together.

In June 2010 Sandwell learned of Mr Selwood’s conviction and of Ms Reilly’s close relationship with him. Ms Reilly was suspended on full pay. Following the disciplinary hearing held in May 2011, a panel found Ms Reilly guilty of the allegation that, in having failed to disclose her relationship with a man convicted of sexual offences towards children, she had committed a serious breach of an implied term of her contract of employment, which amounted to gross misconduct. Ms Reilly was summarily dismissed. Her appeal in July 2011 was not upheld.

In September 2012 Ms Reilly’s claim for unfair dismissal was heard. The tribunal found:

  • that the reason for Sandwell’s dismissal of Ms Reilly was that she had failed to disclose her relationship with a convicted sex offender;
  • that Sandwell genuinely believed that the non-disclosure amounted to misconduct;
  • that there were reasonable grounds for Sandwell’s belief in that it was “obvious that for a head teacher to have failed to disclose such information to her governing body whether it is expressed in her contract of employment or not is a matter of misconduct”; and
  • that in light of Ms Reilly’s continuing refusal to accept that her non-disclosure had been wrong, her dismissal was within the range of reasonable responses open to Sandwell.

Ms Reilly unsuccessfully appealed against the tribunal’s decision in the Employment Appeal Tribunal, the Court of Appeal and finally, the Supreme Court.   

The Supreme Court was unanimous in dismissing Ms Reilly’s appeal. Lady Hale reasoned that Ms Reilly was in breach of her contract of employment by not informing her employers of her connection with Mr Selwood. There are many ways in which Mr Selwood might have, had he chosen to do so, used his friendship with Ms Reilly to gain access to the school’s pupils: not only through being allowed to visit the school but also through finding out information about the pupils.

Comment

Those who are guilty of sexual offences against children pose a risk to the safety of other children both directly and indirectly. Had Ms Reilly reported her connection to Mr Selwood, issues could have been identified and solutions found. It was the absence of full and frank disclosure that was cause for serious concern.

This case highlights the importance of schools including contractual provisions requiring teachers to be accountable for the safety of all pupils, in the fulfilment of their safeguarding responsibilities towards pupils.

For more information on the topic, please contact Elspeth Beatty on 0151 600 3114 or via email


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Education Sector Gender Pay Gap Reporting
Friday 16th March 2018

It’s been on the radar for some time but there is now less than a month to go before educational establishments with 250 or more employees need to publish their gender pay gap information.

The exact deadline for reporting your gender pay gap information will depend upon whether your organisation is classified as a public sector body or a private/ voluntary sector body.

Maintained schools, academies and free schools are classified as public sector bodies and are covered by The Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017 and must publish their required information by no later than 30 March 2018 (and by the same date each year thereafter). Independent and private schools are classified as private sector bodies and are covered by The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 and must publish their required information by no later than 4 April (and by the same date each year thereafter).

Both sets of Regulations require analysis and publication of the gender pay gap information based on six compulsory calculations that are aimed at exposing gender pay gaps.

Where a gap exists employers should question the causes of the gender pay gap in their organisations and, it is hoped, consider the measures they can take to narrow it.

Crucially, once employers publish their gender pay gap reports, it will also be existing employees, potential job applicants, customers, contractors, suppliers and clients that may question why there is a gap and what steps are being taken to address this.  In the government’s consultation response, the Young Women’s Trust was cited as reporting that 84% of women surveyed, aged 16 – 30, would consider an employer’s gender pay gap before applying for a job.

Although the mandatory pay gap reporting will only initially apply to organisations with 250 or more employees it is perhaps likely that, over time, this requirement will eventually filter down to organisations with employee numbers below this level. Even if it doesn’t, if you decide to voluntarily address any gender pay gap you may have and are transparent about the steps you are taken you will be demonstrating your commitment to equal opportunities and best practice.

If you haven’t yet published the required information we can help by advising on compliance with this new regime, reviewing your draft reports and advising on tricky areas such as who would be classified as an “employee” for the purposes of these reporting requirements. We can also assist you with drafting a narrative that explains any gender pay gap and details strategy for reducing it.

In some circumstances, seeking advice may also bring the benefit of legal professional privilege against information and draft reports/data that would otherwise be disclosable in legal action, such as Equal Pay claims.

Don’t delay- the clock is ticking loudly now for your first reports to be published.

For further information, please contact Stephen Brodie on 0151 600 3150 or via email

 


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Supermarket Peep: Covert CCTV use violated Article 8 privacy rights
Wednesday 7th March 2018

In the case of Lopez Ribalda and others v Spain, the European Court of Human Rights (ECtHR) has held that a supermarket manager’s decision to install concealed cameras breached cashiers’ privacy rights under Article 8 of the European Convention on Human Rights (ECHR).

The Facts

Ribalda worked as a cashier in a Spanish supermarket. The supermarket suspected that unknown thieves were extracting tens of thousands of euros’ worth of stock on a monthly basis, and decided to install a mixture of visible and covert surveillance in order to capture any employee or customer thefts that were taking place. Employees were not notified that covert cameras were in place.

A number of covert surveillance cameras were located near the cashier desks. They detected Ribalda and her colleagues stealing items and assisting others (customers and colleagues) to steal at the cashier desks. Ribalda and four colleagues were dismissed, following which they lodged unfair dismissal claims in the Spanish employment tribunals. The claims were unsuccessful.

On appeal, domestic Spanish courts upheld the dismissals on the basis that surveillance was justified, despite the lack of notification provided to the employees in question. The courts ruled that there had been a reasonable suspicion of theft and the measure was necessary and proportionate to detecting the identity of the thieves.

Ribalda and her colleagues brought a claim against Spain in the ECtHR on the basis that the taking of covert surveillance by the supermarket was a violation of Article 8 ECHR rights.

The Decision

Interestingly, the ECtHR, by a majority, upheld Ribalda’s claim, finding that domestic Spanish courts had failed to adequately balance staff privacy rights with the supermarket’s duty to investigate the source of the theft, and the public interest in the proper administration of justice.

It held that covert surveillance of an employee is an intrusion of privacy, engaging Article 8 ECHR. Although the ECtHR acknowledged the supermarket’s right to investigate and protect its property rights, it did not uphold the values of Spanish data protection law (by failing to inform employees of the installation or of their data protection rights).

The court made a distinction between this case, and the factually similar case of Kopke v Germany in which employees’ Article 8 ECHR privacy rights were found not to have been infringed.  The differentiation between these cases is of key importance; in Kopke, covert surveillance was specifically targeted towards particular areas and individuals of interest, and was in operation for a temporary period of two weeks.

In contrast, covert surveillance in Lopez Ribalda was wide-ranging, aimed at all staff, during all working hours and for and was operational for a number of weeks. This lack of targeted surveillance, combined with its permanent presence ultimately distinguishes the two cases.

Spain was ordered to pay each employee €4,000 in non-pecuniary damages, costs and expenses.

The Impact 

It is surprising that the ECtHR decided to award pecuniary damages to staff who had confessed to being involved in stealing from their employer. It is arguable that a finding of violation alone would be sufficient in this case. Indeed, one judge made this very point in a partly dissenting judgment.

When contrasted with Kopke, the principles of covert surveillance in the workplace are clear. Before covertly monitoring employees, Employers must consider:

  • Placing time limits on any surveillance regime being imposed.
  • Regulating the daily use of workplace surveillance, for example by running cameras only during lunch breaks.
  • Targeting certain employees / areas of interest in the workplace, and avoiding covert surveillance over large swathes of the workplace.
  • Maintaining a clear and strict policy which informs employees that covert surveillance may be in place when necessary.
  • Deploying covert surveillance only in exceptional circumstances and following senior authorisation.

Employers need to act with some restraint and consideration when monitoring their employees. They should consider and respect those individuals who are not guilty of misconduct or crime, when the use of covert cameras is considered. Targeted, restrictive monitoring is encouraged at all times and employers should ensure that the correct policies are in place to facilitate reasonable investigation.


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Increase in Employment Tribunal minimum and maximum compensation award from 6 April 2018
Wednesday 21st February 2018

These new limits have been set by the recently published Employment Rights (Increase of Limits) Order 2018. The new limits apply where the event giving rise to compensation or payment occurs on or after 6 April 2018.

This means that where a dismissal or relevant event occurs before this date, the old limits will still apply, irrespective of the date on which compensation is awarded. 
 

With effect from 6 April 2018 the main changes will be:
 

  • Maximum compensatory award for unfair dismissal increases to £83,682 from £80,541.
     
  • Minimum basic award where dismissal unfair by reason of health and safety, employee representative, trade union, or occupational pension trustee reasons increases to £6,203 from £5,970.
     
  • Limit on “a week’s pay” for the purposes of calculating statutory redundancy payments and unfair dismissal basic awards (amongst other things) increases to £508 from £489.
     
  • Guarantee pay increases to £28 a day from £27 a day.

 


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Convicted of deliberately failing to give staff workplace pensions!
Monday 12th February 2018

Stotts Tours, are the first UK employer to face prosecution for non-compliance with the auto-enrolment legislation.

The Pensions Regulator, the regulator of work-place pension schemes in the UK, decided to bring charges against Stotts and its managing director after they admitted to deliberately avoiding setting up a work-place pension for 36 of its workers eligible under the auto-enrolment scheme. 

Under section 45 of the Pensions Act 2008 (PA 2008), an offence is committed by an employer who wilfully fails to comply with the duty under section 3(2) (automatic enrolment) of PA 2008. Section 3(2) states that the employer must make prescribed arrangements by which the jobholder becomes an active member of an auto-enrolment scheme with effect from the automatic enrolment date. 

Where an offence under section 45 PA 2008 is committed by a company with the consent or connivance of one of its directors, or is attributable to the director’s neglect, the director is also guilty of the offence under section 46 of PA 2008. 

Stotts and its managing director faced charges of wilfully failing to comply with their duties at the Magistrates’ Court. 

The Magistrates found that Stotts should have auto-enrolled eligible workers on to a work-place pension and should have started making employer contributions from June 2015.

Stotts were fined £27,000 and ordered to pay £7,400 in costs and its managing director was ordered to pay a £4,455 fine. Along with victim surcharges payable by both the company and its managing director this amounts to a grand total of over £39,000, which comes on top of £14,400 in civil fines.

In addition to paying ongoing pension contributions, the company must also pay in the region of £10,000 in backdated pension contributions for its staff.

In light of the decision to prosecute Stotts, employers should continuously review their obligations in respect of work-place pensions to ensure they remain compliant with the rules, including.

  • An increase to the minimum defined contribution rates from 6 April 2018, and again from 6 April 2019.
  • Cyclical automatic re-enrolment, every three years, of those who have opted-out of membership of the scheme.

This case should serve as a reminder to employers and directors of the serious consequences that may ensue should they fail to comply with pension legislation. Not only does The Pensions Regulator have the power to prosecute through the Magistrates’ Court (and impose an unlimited fine) or through the Crown Court (and sentence up to a maximum of 2 years imprisonment) they may also impose civil fines.

For further information on this topic/other pension matters, please contact: 

Kirsty Weyman                             Kayleigh Garforth
Paralegal, Employment                Solicitor, Employment and Pensions

 

   

 

 


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