UK: New Resources

New presidential guidance has been issued in relation to how employment tribunals should calculate pensions loss and awards for injury to feelings in discrimination cases, available here. There are three bands for injury to feelings, with a usual minimum of £800 and maximum of £42,000 (save for exceptional cases); these will be reviewed in March 2018 and annually thereafter.

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UK: Compensation awards could increase following change in calculation of a week’s pay

The EAT in University of Sunderland v Drossou has decided that, contrary to previous practice, employer pension contributions should be included in the calculation of a week’s pay. This will increase the value of awards, in particular where the full value of a week’s pay is used (ie, it is not capped), such as the unfair dismissal compensatory award and compensation for failure to inform and consult on TUPE transfers or collective redundancies. The impact could be particularly significant for employees in DB schemes.

Spain: Increase in the basis used to calculate the severance payment for dismissal

On 3 May 2017, the Spanish Supreme Court (the “Supreme Court”) issued a judgment in which it declared that employer’s contributions to (i) medical insurance policies; (ii) life insurance policies; and (iii) pension plans, should be treated in the same way as salary (as benefits in kind). Contributions must therefore be included in the annual salary considered when calculating the severance payment for dismissal.

Australia: Have you updated your salary sacrifice policy?

Employers may need to review their salary sacrifice policies as from 1 July 2017 due to changes to the superannuation rules. The most significant change is that, from 1 July 2017, employees will be able to make personal superannuation contributions and claim a tax deduction, rather than needing to salary sacrifice take home pay into superannuation.

We explain below:

  • the current position on salary sacrificed contributions;
  • the new position as of 1 July 2017; and
  • what action employers can take as a result of these changes.

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UK: Changes to benefits – trust and confidence breached by changes contrary to reasonable expectation

A recent pensions case has highlighted the risks inherent when communicating with employees about benefit changes.  Assurances given may create ‘reasonable expectations’ that there will be no further changes (absent exceptional circumstances), so that subsequent changes then amount to a breach of trust and confidence. Our pensions group’s briefing is available here.

United Arab Emirates: Proposed reform to retirement and pension law

The Federal National Council (FNC) has called for widespread reform to retirement and pension laws in an effort to encourage more Emiratis to work in the private sector.

The FNC’s proposed changes to the pension system include:

  • permitting Emirati owners of small or medium enterprises to register with the Pensions and Social Welfare Authority, making them eligible for state pensions;
  • allowing retired Emiratis to gain new employment while collecting a state pension;
  • removing the requirement that women be 50 before being able to retire and reinstating the previous condition that a woman works for 20 years prior to retirement; and
  • aligning annual pension increases with inflation.

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Spain: Proposed amendments to Spain’s state pension system

On 7 June 2013, a committee of experts appointed by the Spanish government was asked to prepare a report on the “sustainability factor” of the social security system. The report was commissioned pursuant to Act 27/2011 regarding the modernisation and adequacy of the social security system and was put before Spanish Congress on 18 and 19 June 2013. Following consultation with businesses and trade unions, which is due to start this September, the report’s findings could be implemented by law. Continue reading