Legal Practice Notes

THIS PRACTICE NOTE APPLIES IN RELATION TO MULTI- EMPLOYER DEFINED BENEFIT OCCUPATIONAL PENSION SCHEMES This Practice Note outlines the matters trustees of a multi-employer defined benefit ( DB) pension scheme should address when an employment cessation event arises that triggers a section 75 debt. An employment cessation event occurs where a participating employer in a multi-employer DB scheme has no active members while another participating employer in the scheme still has at least one active member. On such an event, a statutory liability—known as a “section 75 debt” or “employer debt”—is imposed on that employer under the Pensions Act 1995, ss 75–75A, and the Occupational Pension Schemes ( Employer Debt) Regulations 2005, SI 2005/678 (the Employer Debt Regulations). The sum due equals the proportion of the scheme’s overall section 75 debt attributable to that employer, which legislation describes as the liability share. For more detail, see...

STOP PRESS: The Data ( Use and Access) Act 2025 ( Commencement No 6 and Transitional and Saving Provisions) Regulations 2026, SI 2026/82, activate the remaining provisions of the Data ( Use and Access) Act 2025 ( DUAA 2025). Provisions covering subject access requests, legitimate interests, purpose limitation, automated decision-making, international transfers and enforcement apply from 5 February 2026, with those on penalty notices and complaints commencing on 19 June 2026. For more detail, see Practice Note: Data ( Use and Access) Act 2025—employment implications. That Practice Note will be updated shortly to reflect these changes. This ‘ How to’ guide identifies the key issues to address when providing corporate support as an employment lawyer, and signposts the available materials. It sets out the core aspects of employment corporate support and then looks at employment due diligence, advising on how the Transfer of...

Before the full hearing, the parties may decide to settle the issues raised by the appeal between them, or choose to withdraw the appeal altogether. The Practice Direction describes the procedure to be followed where an appellant seeks to withdraw, or where the parties agree the appeal ought to be allowed by consent. Alternative dispute resolution The Employment Appeal Tribunal ( EAT) supports alternative dispute resolution and, in particular, the involvement of an Acas officer in appeals that appear amenable to conciliation. Its approach to conciliation is consistent with the following: its authority to take whatever steps it considers appropriate to enable parties to avail themselves of any opportunities for conciliation, whether by adjourning any proceedings or otherwise; and furthering the overriding objective, which includes: ensuring cases are dealt with...

This Practice Note This Practice Note explains how to lodge an appeal, detailing the required form and content of the Notice of Appeal, the permissible grounds, the documents that must be served with it, and any related applications. It also addresses the online route for electronic filing, namely the E‑ Filing service through the secure CE‑ File portal. The Employment Appeal Tribunal ( EAT) Practice Direction 2024 ( EAT PD 2024) took effect on 1 February 2025, superseding the 2023 Practice Direction. It stipulates that anyone contemplating an appeal to the EAT must read and carefully consider sections 1 to 3 of the EAT PD 2024 before proceeding. Practitioners are required to ensure their clients also read and carefully consider those sections prior to submitting an appeal, as set out in those provisions......

This Practice Note sets out a summary of the key criminal offences linked to illegal working and considers practical issues when managing a criminal investigation and prosecution. For details on the civil penalty framework for illegal working, see Practice Note: Illegal working: dealing with a civil penalty. The scope of this Practice Note is limited to the law in England and Wales. While the primary focus is prosecution under section 21 of the Immigration, Asylum and Nationality Act 2006 ( IANA 2006), for guidance on additional illegal working offences, see Other offences below. Be aware that the illegal working regime, including IANA 2006, s 21, is scheduled to be widened to include alternative working models that previously sat outside its reach, pursuant to a clause in the Border Security, Asylum and Immigration Bill. See: LNB News 08/05/2025...

Overview The consequences of breaching health and safety duties at work often include the prospect of paying financial compensation to the claimant or, where relevant, their dependants. This liability usually stems from actions brought in the civil courts or the threat of such proceedings. In addition, the Health and Safety Executive ( HSE) holds various enforcement powers over employing organisations, including the issue of prohibition or improvement notices. Under the Health and Safety at Work Act 1974 ( HSWA 1974), breaches can also result in criminal liability, with potential sanctions for both individuals and companies ranging from fines to, in serious instances, imprisonment. The employer’s duty of care The employer’s duty of care owed to employees is firmly established and requires no further examination. This duty arises in two ways—at common law (negligence) and under statutory regulation. Statutory oversight of workplace safety has existed for almost two...

THIS PRACTICE NOTE APPLIES TO REGISTERED OCCUPATIONAL PENSION SCHEMES As a broad principle, and subject to the governing provisions contained in their trust deed and rules, registered occupational pension schemes may invest without limits on the nature of those investments. Nevertheless, practical departures from this broad principle do exist in practice. The most significant qualifications are the constraints set out in section 40 of the Pensions Act 1995 ( PA 1995) and the Occupational Pension Schemes Act ( Investment) Regulations 2005, SI 2005/3378 (the Investment Regulations), which significantly curb trustees’ scope to place scheme funds in employer-related investments. These limits, which this Practice Note addresses, are intended to give clear statutory support to the general tenet that scheme assets should be kept strictly separate from the employer’s property so as to provide greater security for members. The Pensions Regulator has produced guidance...

This Practice Note sets out the extent and content of an employer’s common law obligation to exercise reasonable care for employees’ safety, with particular regard to providing safe premises, plant and equipment, systems of work and competent staff. It also considers the effect of the Enterprise and Regulatory Reform Act 2013 ( ERRA 2013), namely the removal of civil liability for breach of most workplace health and safety regulations unless the specific regulation expressly provides for it. In practical terms, claims will generally have to be advanced in negligence. To succeed, therefore, the injured employee must prove that the harm was reasonably foreseeable and that the applicable common law standard of care was breached. Overriding duties At common law, an employer owes a duty to take reasonable care of the health and safety of its employees in all the...

This Practice Note clarifies when a secondary contributor can, and cannot, recover employer’s NICs from an earner (that is, an employee or director). For ease, it uses the terms ‘employer’ and ‘employee’ instead of ‘secondary contributor’ and ‘earner’. The core statutory framework for NICs is found in the Social Security Contributions and Benefits Act 1992, with the principal secondary rules set out in the Social Security ( Contributions) Regulations 2001 ( SI 2001/1004). For current NICs rates and thresholds, see Practice Note: Key UK tax rates, thresholds and allowances. For when primary and secondary Class 1 NICs and Class 1A NICs arise in relation to employment‑related securities and securities options, see Practice Notes: NICs implications of employment‑related securities and securities options and Tax and other rates which are relevant to share...

This Practice Note addresses the core obligations, covering risk assessments and the prevention of risk, health and safety arrangements, and the supply of information and training. It also considers the duties of employees and outside workers. The Management of Health and Safety at Work Regulations 1999, SI 1999/3242, establish a framework of employer duties aimed at preventing or reducing the likelihood of workplace accidents... Post 1 October 2013 From 1 October 2013, section 69 of the Enterprise and Regulatory Reform Act 2013 ( ERRA 2013) took effect. For workplace accidents occurring on or after that date, civil liability no longer follows from a breach of a health and safety statutory duty unless the specific regulation provides for it. An exception persists under the Management of Health and Safety at Work Regulations 1999, SI 1999/3242, regs 16 and 17, which continue to impose civil...

This Practice Note examines how civil liability may arise where an individual—most often, though not solely, an employee—develops dermatitis following exposure to substances hazardous to health, and outlines circumstances in which liability is engaged. It further explores whether asymptomatic sensitisation brought about by workplace exposure can amount to actionable harm. Prior to 1 October 2013, claims concerning dermatitis linked to hazardous substances were regulated by the statutory regime contained in the Control of Substances Hazardous to Health Regulations 2002 ( COSHH Regs 2002), SI 2002/2677, as amended. For injuries sustained on or after 1 October 2013, section 69(3) of the Enterprise and Regulatory Reform Act 2013 ( ERRA 2013) altered section 47 of the Health and Safety at Work etc Act 1974. As a consequence, breach of the COSHH Regulations 2002 no longer gives rise to civil liability. For further guidance on...

Spotting the early symptoms of employer insolvency Above all, a contractor should remain vigilant to the employer’s financial health. Pay attention to persistent rumours about the employer’s position (in the media or by word of mouth). Monitor formal notices to shareholders and the market (such as profit warnings), any credit rating downgrades, adverse filings at Companies House (e.g. overdue accounts or qualified audit opinions), or lapses in insurance. Observe any unexpected or commercially questionable omissions from the project by the employer. Stay aware of the employer’s late or non-payment of other parties on this project, or on other schemes the employer is delivering. Clearly, if the employer suspends the works without a proper explanation or a sound commercial rationale, this may indicate an unwillingness to fund further activity. Validate concerns by...

Demonstrating an employer has breached its duty of good faith is no easy matter. The implied duty of good faith (often referred to as the implied duty of trust and confidence in contractual settings) originated within pensions law in Imperial Group Pensions Trust v Imperial Tobacco ( Imperial) in 1991, and has been shaped by later judicial authorities and case law. A more contemporary formulation appeared in the High Court’s 2011 decision in the Prudential case. As the judge in Prudential observed, that duty is not simply to be fixed at the point of the Imperial ruling. That said, despite its evolution, consensus has since formed that the 2014 High Court decision in IBM v Dalgleish pushed the concept too far when, on its facts, it ultimately found an employer indeed in breach of the duty of good faith. That peak...

This Practice Note outlines the steps an employer should follow to seek payment from the contractor, or to request an extension of the defects notification period, under the 1999 FIDIC Red, Yellow and Silver Books, the Pink ( MDB) Book 2010 and the Gold Book 2008. For guidance on the process for contractors’ claims under these forms, see Practice Note: FIDIC contracts (pre‑2017 editions)— Contractor claims. The 2017 editions of the Red, Yellow and Silver Books adopt a different approach—for instance, Employer and Contractor claims are dealt with under a single regime. For further details, refer to Practice Note: FIDIC contracts 2017— Contractor and Employer claims. Employers' claims— Red, Yellow, Silver and Pink Books An employer may claim payment from a contractor for a range of reasons—e.g. the contractor may owe delay damages, or the employer may have incurred costs because progress of the works has...

Importance of the definition of employees' share scheme in Companies Act 2006 When putting in place an employee share incentive, it is common to design and draft it so that it qualifies as an ‘employees’ share scheme’ for the purposes of the Companies Act 2006 ( CA 2006). The reason is that several CA 2006 constraints do not apply to such schemes, allowing companies to rely on relevant exemptions when operating their employee equity arrangements. In practice, the carve-outs most frequently used relate to CA 2006 provisions on: the allotment of shares and the granting of options over shares share pre-emption rights financial assistance requirements (subject to specified conditions) the transfer of treasury shares the buy-back of a company’s own shares There are also consequences of a scheme being an employees’ share scheme under the UK Listing...

IMPORTANT NOTE: The ability to offer tax-favoured employee shareholder shares or ESS (commonly used in private equity company arrangements) has now been removed. In the Autumn Statement 2016, the government confirmed the withdrawal of these ESS-related reliefs: Income tax and NICs relief on the first £2,000 of employee shareholder shares issued to an individual The capital gains tax exemption covering all or part of ESS shares The rule that, when a company buys back employee shareholder shares, the payment is not treated as a distribution in the shareholder’s hands These measures apply to any employee shareholder agreements entered into on or after 1 December 2016. However, individuals who received independent advice about entering such an agreement before 23 November 2016 could still complete it before 1 December 2016 and keep the beneficial income tax and CGT treatment. Likewise, anyone who obtained independent advice on 23 November 2016 before 1.30 pm...

IMPORTANT NOTE: The facility to issue tax‑favoured employee shareholder shares ( ESS), commonly seen in private equity company structures, has been withdrawn. In the Autumn Statement 2016, the government confirmed that the following ESS reliefs were removed: the income tax and National Insurance contributions ( NICs) relief that applied to the first £2,000 of ESS granted to an individual the capital gains tax ( CGT) exemption covering all or part of the ESS the measure ensuring that, when a company repurchases ESS from an employee shareholder, the consideration is not treated as a distribution in the shareholder’s hands These amendments apply to any employee shareholder agreements entered into on or after 1 December 2016. That said, an individual who obtained independent advice about entering an employee shareholder agreement before 23 November 2016 could still complete the agreement before 1 December 2016 and retain the favourable income tax and CGT...

Archived: The option to grant tax‑advantaged Employee Shareholder Shares ( ESS), often used in private equity arrangements, has been withdrawn. In the Autumn Statement 2016, the government confirmed the removal of these ESS-related reliefs: income tax and NICs relief on the first £2,000 of ESS received by an individual; the capital gains tax exemption on all or part of the ESS; and the rule that, where a company repurchases ESS from an employee shareholder, the consideration is not treated as a distribution in the shareholder’s hands. These withdrawals apply to any employer shareholder agreements entered into on or after 1 December 2016. However, individuals who obtained independent advice about entering an employer shareholder agreement before 23 November 2016 could still proceed before 1 December 2016 and retain the beneficial income tax and CGT...

A business might need to secure extra capital for a variety of purposes. It could, for example, be to finance a planned acquisition or to satisfy continuing financial commitments. There are several routes by which a company can obtain the extra funding required, including tapping existing shareholders through a rights issue, an open offer or a placing. When running a rights issue, open offer or placing, the company must carefully assess the effect on any current employee share plans it operates. This assessment should take place as early as possible in the decision-making process to determine whether, and if so what, steps can be taken so that employees are not put at an unfair disadvantage by a rights issue, open offer or placing. This Practice Note outlines the key points that typically arise in connection with employee share plans on a rights issue, open offer or...

What is an employee ownership trust? An employee ownership trust ( EOT) is a specific kind of employee benefit trust ( EBT) that must meet statutory criteria. The concept was introduced by the Finance Act 2014 ( FA 2014), together with tax advantages for companies owned by an EOT and for individuals who dispose of shares to an EOT. If the statutory criteria are not met in relation to the EOT, these reliefs will not be available. The reliefs were enacted by FA 2014, Sch 37, following a Budget 2013 announcement and a subsequent consultation. For guidance on pitfalls and common errors when creating or running an EOT, see Practice Note: Pitfalls of setting up and operating an employee-ownership trust. For general information on EBTs, see Practice Note: What is an employee benefit trust? What tax reliefs can an EOT...