UK Government drops bonus cap challenge

Advocate General Nilo Jääskinen held in an opinion in the case of United Kingdom v Parliament and Council (Case C-507/13) published by the European Court of Justice (ECJ) on 20 November that the UK's challenge to the limits on variable remuneration in the financial sector (the "bonus cap") should be rejected. Although the Advocate General's decision is not binding on the ECJ itself, the UK has decided not to pursue the case any further.

In rejecting each aspect of the Government's challenge the Advocate General makes it clear that the determination of the level of pay is unquestionably a matter for Member States and that there is no limit on basic salaries - these views aren't new but they underscore the focus on fixed pay and with it a notion that, because it isn't variable pay, it leads to better risk management. Its impact on the wider pay regulation debate remains to be seen but what we can safely predict is that the proposed regime in the UK needs further consideration and refinement before financial institutions can move forward with confidence and the debate about what constitutes fixed pay will continue.

The view of the Advocate General in response to the UK Government's challenge to the "bonus cap" and the Chancellor's decision to give up the challenge, means that the debate about pay in the financial services sector will continue in to 2015.

Autumn Statement support for apprentices and young workers

In his Autumn Statement last week, the Chancellor of the Exchequer announced that no employers' National Insurance contributions will be payable from 6 April 2016 on earnings below the upper earnings limit paid to apprentices under the age of 25. It has previously been announced that employers will no longer pay national insurance contributions for any employees under the age of 21 from April 2015.

No appeal on overtime and holiday pay case

When the Bear Scotland decision was announced last month [link to article in Nov's Law at Work], it was widely expected that the judgment – in particular, the ruling that workers will not be able to bring claims based on a series of deductions, where there has been a gap of more than three months between the deductions – would be appealed.  Granting immediate permission to appeal this part of its decision, the EAT described the issue as being of "public importance".  

However, the Unite union, which represented the claimants in the associated cases of Hertel and AMEC heard together with Bear Scotland, has announced it will not be appealing and the employers have also been silent. This means that in most cases, workers claiming underpaid holiday pay will not be able to bring claims stretching back many years. Bear Scotland itself has been remitted to the tribunal. Unite says that its reason for not appealing is because "We don't want to bankrupt business; going forward it is about ensuring employees are paid their fair share and working with employers to ensure they get their house in order."

Automatic enrolment agreements with pension providers: know what you are signing up to

Automatic enrolment, which is being phased in from October 2012, requires employers to automatically enrol most employees into pension arrangements and make contributions in respect of them. This makes it more important than ever for employers to take care in selecting the pension products they are using for automatic enrolment purposes and in checking the terms of those products.