Employment and pensions

Employment and pensions

What is employment law?

Elizabeth Parkin, associate in employment, Birmingham, and Heather Chandler, partner in pensions, Milton Keynes at Shoosmiths LLP share the ins and outs

Employment law covers a wide range of areas and involves both contentious and non-contentious work. Broadly speaking, it encompasses any area of the law that relates to the employment of individuals.

This can involve not only advising on areas such as redundancies, dismissals and grievance situations, but also supporting corporate and commercial lawyers involved in the sale and purchase of businesses and advice on property matters (for example where there is a change in ownership of a building or services being provided to a property).

Employment lawyers need to be able to offer commercial advice, as well as advising on the legal aspects of an issue. Employment law can be extremely technical, and employment lawyers need to be able to break down these technical rules in order to advise clients on the risks involved in particular courses of action, as well as offering innovative solutions. Along with this ability to offer commercial advice, employment lawyers also need to be personable, as there is a high level of interaction with clients directly and their HR departments. Attention to detail is a necessity, especially as matters can often lead to litigation.

As employment law covers a wide range of topics, employment lawyers have to ensure that they keep up-to-date with the most recent case law and legislative changes. A high level of organisation and dedication is needed to ensure that they are able to offer the most up-to-date advice to their clients. Individuals need to be good at working to tight deadlines, as clients seeking employment advice often require a quick response and therefore employment law is a fast-paced area to work in. It can also be demanding due to the variety of issues that clients need advice on. Saying this, a high level of client contact and variety of work makes employment law an interesting, challenging and enjoyable area to work in.

One of the key areas of development in employment law has been the u-turn on legal fees for tribunal claims. Fees were introduced in 2013 and led to a decrease in claims by around 70%. However in July 2017 they were held to be unlawful in that they not only prevented access to justice but were also indirectly discriminatory. Since then claims have reportedly increased by 90%, which the tribunal system is not equipped to manage. Early indications were that an alternative fee arrangement would be introduced, but with Brexit the government has yet to make a move on this. Brexit has also yielded much debate in the legal sector; as yet few changes have been seen, but areas such as immigration are likely to be a big growth area for employment lawyers.

Pensions

Pensions law involves setting up and helping trustees and employers operate pension schemes either trust or contract based, referencing those relevant areas of law. Clients range from corporations, charities and other not-for-profit organisations, to individual trustees, lay or professional.

We advise on issues of compliance with legislation and the regulatory regime applicable. Whilst not usually contentious, the pensions ombudsman handles disputes through a paper process. There is also a pensions regulator and a regime of notifications and compliance with that office to manage. In rare circumstances we have cases referred to counsel and/or the courts. We work closely with employment lawyers on contract interpretation and also on executive termination issues where compensation for loss of pension benefits may be a significant factor.

The sale or purchase of a business or company will often have a pensions dimension and advice will be required on the contractual obligations of the seller and the purchaser around any existing pension schemes, what future pension provision is required and any compliance risks a purchaser may be acquiring. There are a number of types of pension scheme but final salary schemes (also called defined benefit schemes) are the type most likely to give rise to issues. These schemes promise benefits linked to salary and length of service and have to be funded. Pension funds/schemes are some of the largest investors globally and management of the investments and the obligations around keeping a scheme in funds to the levels statute requires is something on which we advise regularly, together with actuaries and investment managers.

We draft documentation daily, from deeds to letters, and attend meetings with trustees assisting with the day-to-day running of schemes. We also deliver training to clients so can be in and out of the office. We act both pro actively to tell clients about issues they need to be aware of and what actions they may need to take, as well as reactively to requests to assist with projects like merging two pension schemes, or amending the terms of a schemes. Part of our role is to work with other professionals who also work with pensions schemes such as actuaries, accountants, investment managers and auditors. Communicating with a wide range of individuals with different experience of pensions is also part of our daily work.

Good communication skills are key to being a good pensions lawyer as well as having a good and consistent attention to detail when required. It is also important to be able to understand commercial issues and advise clients in a pragmatic way, helping them to assess and mitigate risk. Much of what we do involves problem solving and it’s a key skill to be able to logically pull together lots of complex points and documents and come up with an integrated view. Being a pensions lawyer is therefore intellectually challenging, requiring pragmatic and creative thinking.

Pensions law has been subject to rapid changes in the last decade, most notably the introduction of auto-enrolment. Auto-enrolment requires employers to pay towards pension provision for all their eligible employees at a statutory minimum level. This has been successful in increasing the percentage of employees saving into a pension. There has also been the introduction of more flexible access to pension savings, allowing members in certain circumstances to access their benefits before retirement in a variety of ways. It is worth noting that there is significant crossover between pensions law and other areas of law like employment, corporate, tax, and data protection.

Shoosmiths LLP

We are close to our clients, constantly listening, thriving on their challenges, bringing the energy, ideas and results they need.

We are a full-service law firm with teams in commercial, corporate, employment, real estate, intellectual property, banking, planning, and dispute resolution. Through our Access Legal consumer brand, we also offer private client, personal injury, medical negligence, and conveyancing. We have ten offices across the UK and more than 700 lawyers.

For further information about the firm, see www.shoosmiths.co.uk