United Kingdom

Introduction

On 10 May, the Department for Business and Trade (the “DBT”) released the regulatory reform update “Smarter Regulation to Grow the Economy” – the first in a series of updates on how the government intends to reform regulations to support economic growth.  This first package…

Continue Reading UK Employment Law: Government plans to cut Red Tape for UK Businesses

2023 will likely see employment lawyers and HR professionals (in the UK and further afield) grappling with a number of key employment-related legal and policy developments. In this alert we highlight some of the most important ones.

  1. Brexit: The Employment Law Fallout

When the UK left the European Union on…

Continue Reading UK Employment: Top Five Hot Topics in 2023

The draft UK Finance Bill 2017 (the “Bill”) proposes some significant changes to the tax treatment of a payment in lieu of notice (“PILON”) for employees.  Where a UK employer exercises a contractual right to make a PILON, the payment is fully taxable and subject to national insurance contributions (“NICs”)…
Continue Reading Proposed Changes to UK Law on the Taxation of Payments In Lieu Of Notice

In the wake of the financial crisis and the so-called ‘shareholder-spring’ of 2012 (a period during which many shareholders refused to endorse directors’ remuneration policies), the government has introduced new rules on directors’ remuneration reporting. The new rules: (i) increase the compliance burdens regarding the reporting of directors’ remuneration policies; (ii) increase shareholder control over remuneration and termination packages; and (iii) introduce potential personal liability for directors who authorise payments in violation of an approved policy.

These changes bound certain UK-incorporated quoted companies with effect from 1 October 2013. The government estimates that around 900 companies have been affected.
Continue Reading New UK Directors’ Remuneration Reporting Regime

At a recent forum in New York, a team of Covington & Burling LLP lawyers addressed the growing concern among companies that their most valuable assets might just walk out the front door on a thumb drive in an employee’s pocket or otherwise be taken by company insiders.  Although much of the discussion in this country is focused on securing systems from cyber-attacks, Michael Chertoff (former Secretary of Homeland Security and now Senior Of Counsel at Covington) noted that focusing only on attacks from outside a company is like locking a door but leaving a window open. The threat from insiders is substantial, and addressing this threat involves many disciplines, including employee benefits and executive compensation.

Protecting business critical information is not simple.  It involves identifying which information is critical, designating that information confidential, establishing practices, procedures, and policies to maintain confidentiality, and being prepared to address immediately breaches that occur.  Each step implicates several areas of the law, including data security, privacy, intellectual property, white collar crime, employment, employee benefits and executive compensation, corporate and securities, insurance coverage, and crisis management.  For example, the recent White House initiative to combat trade secret theft identified human resources policies as a key area of focus in developing best practices to protect trade secrets. 
Continue Reading Why Is a Benefits Lawyer Talking about Trade Secret Theft?

On 7 March 2013, the UK Information Commissioner’s Office (ICO) issued new guidance for employers on the use of personal devices for business purposes.  The guidance is largely informed by a survey commissioned by the ICO and carried out by the market research firm YouGov.  According to the survey, 47 percent of adults in the UK use personal smart mobile phones, laptops or tablets for work purposes, but less than 30 percent are given guidance on secure use and the risks relating to loss or theft.  However, even when an employee uses a personal device, an employer may still be liable in the UK for the loss of data relating to individuals that the employer is required to protect.

UK companies have in recent years been increasingly amenable to allowing employees to use personal devices for business purposes, a practice known as “bring your own device” to work, or BYOD.   The driving forces behind the trend for BYOD include cost considerations and a rise in flexible working practices.  The ICO guidance reminds employers that their responsibilities as data controllers apply equally in the context of BYOD.  In other words, employers remain liable for any data loss, theft, or damage to personal data that occurs, regardless of whether processing takes place in their secure corporate IT environment or on the personal devices of their employees. 
Continue Reading Safer “Bring Your Own Device” Policies: New Guidance from the UK Information Commission’s Office

The UK High Court recently confirmed that incentive pay may be conditioned upon good behavior.  In Imam-Sadeque v BlueBay Asset Management (Services) Ltd [2012] EWHC 3511 (QB), the court concluded that forfeiting incentive pay for bad behavior does not constitute an unlawful penalty.  In that case, an employee and employer had entered into a release agreement under which the employee was deemed a “good leaver,” provided he complied with the terms of his employment contract.  The employee later breached implied obligations of fidelity during his notice by providing confidential information to and otherwise assisting a potential competitor.  The employer refused to grant the employee any unvested awards and the employee sued, claiming among other things that forfeiting unvested incentive awards in such circumstances amounted to an unlawful penalty. 
Continue Reading Forfeiture of Incentive Pay for Violation of Employment Agreement Is Not an Unlawful Penalty, Says UK High Court

In the coming year, we expect to see continued activity on the part of the agencies and Congress with respect to employee benefits and executive compensation.  The following is a preview of major guidance anticipated in 2013. 
Continue Reading 2013 Preview of Expected Developments in Employee Benefits and Executive Compensation

Qualifying UK employees and workers must be automatically enrolled in suitable pension schemes beginning October 1 in order to promote saving for retirement. Suitable pension schemes include defined contribution or defined benefit schemes. There is no obligation to enroll an individual who is already an active member of a qualifying employer scheme. Importantly, employers must make financial contributions to such schemes in respect of each enrolled individual (as must the individual). 
Continue Reading Auto-Enrollment In Pension Schemes Comes Into Force in UK