http://www.xperthr.co.uk/faqs/faqslatest.aspx Latest items added to the XpertHR FAQs service. ©2013 - www.xperthr.co.uk http://www.xperthr.co.uk/app_themes/default/images/logo.gif http://www.xperthr.co.uk/faqs/faqslatest.aspx Under s.63A of the Employment Rights Act 1996, young people aged 16 or 17 (and also 18-year-olds who began their studies or training before reaching 18) who have left full-time education without attaining a prescribed "standard of achievement" have the legal right to paid time off work to acquire a "relevant academic or vocational qualification". However, this right is overridden by a duty on certain young people to participate in education and training introduced by provisions in the Education and Skills Act 2008. The duty applies (from 29 June 2013) to young people in England who have not attained a level 3 qualification and who are under age 17 (increasing to age 18 from 2015). Where this duty applies, the right to time off work under the Employment Rights Act 1996 does not apply. Young people in Scotland and Wales continue to have the right to time off work under s.63A. The Eduction and Skills Act 2008 includes provisions requiring employers to accommodate young workers' arrangements for participation in education or training. However, the Government does not currently have plans to bring these requirements into force. Therefore, young people in England who are covered by the duty to participate in education or training do not have the right to time off for this purpose. http://www.xperthr.co.uk/faqs/faqslatest.aspx?articleid=116340&mode=open#116340 xperthr/faqlatest/faqsfaqslatestaspxarticleid116340modeopen116340/doyoungpeoplehavetherighttotimeoffworkforeducationortraining For a dismissal to be fair, the employer has to show that there was a potentially fair reason for the dismissal and that it acted reasonably in dismissing the employee for that reason. Membership of a particular party is unlikely to be a fair reason on its own, but, depending on the circumstances, it could result in a fair dismissal by reason of the employee’s conduct or for "some other substantial reason". From 25 June 2013, employees do not need the normal minimum qualifying service to be able to claim unfair dismissal where the reason for their dismissal is their political opinions or affiliation. Employers should be cautious in dismissing employees in these circumstances, regardless of their length of service, and should ensure that the employee's membership of a political party is not the sole reason for the dismissal. If the employee’s membership has an adverse effect on his or her ability to carry out the job, or on the employer’s reputation, for example if there is a hostile reaction from customers to the employee leading to a boycott of the employer’s services, a dismissal could potentially be fair for "some other substantial reason". If an employee is actively campaigning for an extreme political party at work, or expressing political views that create an intimidating or hostile environment for colleagues, this conduct (rather than the fact of his or her membership of the party) could amount to a fair reason for dismissal. Employers may be concerned about the dismissal of a member of an extreme political party resulting in a claim for religion or belief discrimination. Support for a political party is unlikely to amount to a "belief" under the Equality Act 2010. However, a belief based on a political philosophy could potentially be covered by the legislation (Grainger plc v Nicholson [2010] IRLR 4 EAT). There is therefore potential for an employee to argue that his or her belief, rather than membership of the party itself, was the reason for the dismissal. As long as the employer can show that the employee was dismissed because of the effect of his or her belief, eg his or her conduct, or damage to the employer’s reputation, the dismissal is unlikely to be discriminatory. Further, the Employment Appeal Tribunal has held that to be protected under the legislation a belief must be "worthy of respect in a democratic society" (McClintock v Department of Constitutional Affairs [2008] IRLR 29 EAT). This is likely to rule out protection of a political belief based on, for example, racism. http://www.xperthr.co.uk/faqs/faqslatest.aspx?articleid=101809&mode=open#101809 xperthr/faqlatest/faqsfaqslatestaspxarticleid101809modeopen101809/cananemployeebedismissedforbeingamemberofanextremepoliticalpartyforexamplethebnp A public interest disclosure is a disclosure by a worker concerning a wrongdoing on the part of his or her employer. Protected disclosures include information about: an alleged criminal offence; a failure to comply with a legal obligation; a miscarriage of justice; a breach of health and safety such that an individual has been, is, or is likely to be endangered; damage to the environment; or information that one of the above has been or is likely to be deliberately concealed. From 25 June 2013, a disclosure is not protected unless the employee reasonably believes that the disclosure is made in the public interest. http://www.xperthr.co.uk/faqs/faqslatest.aspx?articleid=19718&mode=open#19718 xperthr/faqlatest/faqsfaqslatestaspxarticleid19718modeopen19718/whatisapublicinterestdisclosure A disclosure is protected if made to the employer or to another person in the organisation whom the worker believes to be responsible for the wrongdoing, to a legal adviser, or to a prescribed person or body listed in the schedule to the Public Interest Disclosure Order 1999 (SI 1999/1549) (such as the Office of Fair Trading or the Health and Safety Executive). A worker can make a disclosure (and still retain protection under the Act) to a non-prescribed person if certain conditions are met, namely: the worker reasonably believes the information is substantially true; the worker is not making the disclosure for personal gain; and, in all the circumstances, it is reasonable for the worker to make the disclosure. The worker must also: reasonably believe that he or she would be subject to a detriment by the employer if he or she made the disclosure directly to the employer or a prescribed person; reasonably believe that the employer would conceal or destroy evidence if the disclosure were put directly; or have previously made the same disclosure to the employer or a prescribed person to no avail. http://www.xperthr.co.uk/faqs/faqslatest.aspx?articleid=19720&mode=open#19720 xperthr/faqlatest/faqsfaqslatestaspxarticleid19720modeopen19720/towhomcanaworkerblowthewhistle Yes. For example, a senior manager in a smaller firm may also advise customers. The firm will need to seek approval from the Financial Conduct Authority and/or the Prudential Regulation Authority for each of the controlled functions that the person is to perform. http://www.xperthr.co.uk/faqs/faqslatest.aspx?articleid=73060&mode=open#73060 xperthr/faqlatest/faqsfaqslatestaspxarticleid73060modeopen73060/isitpossibleforanapprovedpersontoholdmorethanonecontrolledfunction The individual should first find out if the firm has a procedure on disclosure to the Financial Conduct Authority (FCA) or the Prudential Regulation Authority (PRA), as appropriate. If so, this should be followed and the incident brought to the attention of the appropriate person. The firm will need to make a judgment as to whether the approved person's fitness and propriety are affected. Firms are obliged to keep a "breaches" log for minor breaches of regulatory requirements. So, while the firm may not notify the FCA and/or PRA, if it deems the breach to be minor, it should record the breach in its breaches log. http://www.xperthr.co.uk/faqs/faqslatest.aspx?articleid=73061&mode=open#73061 xperthr/faqlatest/faqsfaqslatestaspxarticleid73061modeopen73061/ifanindividualisunsureaboutwhetherornottodisclosetothefinancialconductauthorityorprudentialregulationauthoritysomethingregardinganapprovedpersonsfitnessandproprietywhatshouldheorshedo The Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) may not bring proceedings more than two years on from the point when it first knew of the misconduct. It should be noted that this is not two years from the date of the misconduct, so not informing the FCA and PRA in the hope that the problem will go away will be of no assistance. http://www.xperthr.co.uk/faqs/faqslatest.aspx?articleid=73062&mode=open#73062 xperthr/faqlatest/faqsfaqslatestaspxarticleid73062modeopen73062/forhowlongareindividualsaccountabletothefinancialconductauthorityandprudentialregulationauthorityafterceasingtobeanapprovedperson The firm should consider the list of controlled functions in FCA SUP 10A and PRA 10B to see whether or not the job falls within one of them. http://www.xperthr.co.uk/faqs/faqslatest.aspx?articleid=73063&mode=open#73063 xperthr/faqlatest/faqsfaqslatestaspxarticleid73063modeopen73063/howdoesafirmknowifajobrequirestheholdertobeanapprovedperson An individual can become an approved person only through a regulated firm. Unless he or she joins another regulated firm, the individual cannot be an approved person. http://www.xperthr.co.uk/faqs/faqslatest.aspx?articleid=73068&mode=open#73068 xperthr/faqlatest/faqsfaqslatestaspxarticleid73068modeopen73068/cananindividualbeanapprovedpersonafterleavingafirm The Remuneration Code sets no upper or lower limits on the split between fixed and variable remuneration as a percentage of total remuneration. Neither does it contain any guidance as to the level at which this should be set. Firms therefore have flexibility in this regard, but in setting the split between fixed and variable remuneration, they must ensure that: the fixed and variable components of remuneration are appropriately balanced and, where appropriate, enable the firm to pay no variable remuneration (SYSC 19A.3.44R); the total variable remuneration paid does not limit the firm’s ability to strengthen its capital base (SYSC 19A.3.18R) and, where the capital base needs to be strengthened, the variable remuneration requirements should be sufficiently flexible to allow the firm to direct the necessary resources towards capital building (SYSC 19A.3.19G); the allocation of variable remuneration takes into account all types of risk, and includes adjustments to reflect current and future risks, and the cost and quantity of the capital and liquidity required by the firm (SYSC 19A.3.22R); and for individuals performing risk-management and compliance functions, the ratio of the potential variable component of their remuneration to the fixed component is significantly lower than for individuals in other areas of the business whose variable remuneration is a significant proportion of their total remuneration (SYSC 19A.3.17(3)). Firms should also have in mind the Remuneration Principles set out in the Remuneration Code. http://www.xperthr.co.uk/faqs/faqslatest.aspx?articleid=109801&mode=open#109801 xperthr/faqlatest/faqsfaqslatestaspxarticleid109801modeopen109801/whatistheappropriatebalancebetweenfixedandvariableremuneration No, Code Staff also includes consultants, contractors and those on secondment from other firms. Whether or not someone falls within the definition of Code Staff depends on his or her role. The Remuneration Code contains an express provision at SYSC 19A.2.6G explaining that remuneration includes payments made by a seconding organisation that is not subject to the Remuneration Code to a secondee in respect of his or her work for a firm that is subject to the Remuneration Code. http://www.xperthr.co.uk/faqs/faqslatest.aspx?articleid=109802&mode=open#109802 xperthr/faqlatest/faqsfaqslatestaspxarticleid109802modeopen109802/doescodestaffincludeonlyemployees Policy Statement 10/20: Revising the Remuneration Code - Feedback on CP10/19 and final rules (on the FSA website) sets out at 3.2 to 3.7 guidance on the proportionate approach that the regulator will adopt to the application of the Remuneration Code to such an individual dependent on his or her length of service. http://www.xperthr.co.uk/faqs/faqslatest.aspx?articleid=109803&mode=open#109803 xperthr/faqlatest/faqsfaqslatestaspxarticleid109803modeopen109803/howdoestheremunerationcodeapplytoanindividualwhojoinsafirmpartwaythroughabonusyear When a firm or business unit suffers a material downturn in financial performance, a material failure of risk management, or when there is evidence that an individual has misbehaved or made a material error, the individual’s variable remuneration should be reduced. Further, if the transactions or deals on which an individual’s performance was based transpire not to have justified the level of bonus awarded, the individual’s variable remuneration should be reduced. The Remuneration Code gives firms flexibility in how they apply the rules in SYSC 19.A.3.51 and 19A.3.52 to vary remuneration, but it is important that firms have the contractual ability to vary remuneration awarded and set out clearly when and how the variable element will be adjusted. Records should be kept to provide evidence to the appropriate regulator of an adjustment, if required. http://www.xperthr.co.uk/faqs/faqslatest.aspx?articleid=109804&mode=open#109804 xperthr/faqlatest/faqsfaqslatestaspxarticleid109804modeopen109804/whenisafirmexpectedtoreducetheamountofanindividualsvariableremuneration No, the restriction applies to all staff within a firm. If a firm feels it needs to make such a payment, it should document why (for example, to retain key staff during a restructuring) and how the bonus will be paid. The firm may be required by the appropriate regulator to justify the payment. http://www.xperthr.co.uk/faqs/faqslatest.aspx?articleid=109805&mode=open#109805 xperthr/faqlatest/faqsfaqslatestaspxarticleid109805modeopen109805/doestherestrictiononpayingguaranteedbonusesapplyonlytocodestaff The Remuneration Code contains no guidance on what should happen if an individual leaves the firm before deferred variable remuneration has vested or is payable. Termination payments should not be seen as reward for failure and should reflect performance achieved over time (SYSC 19A.3.45). Therefore, such deferred variable remuneration should not be paid out early. The regulator considers that any deferred variable remuneration should continue to be deferred and paid out as and when it is due, subject to any scheme rules (good leaver, bad leaver or otherwise) and performance adjustment. http://www.xperthr.co.uk/faqs/faqslatest.aspx?articleid=109806&mode=open#109806 xperthr/faqlatest/faqsfaqslatestaspxarticleid109806modeopen109806/whathappenstodeferredvariableremunerationwhenanindividualleavesthefirmbeforethatvariableremunerationhasvestedorispayable Since 1 April 2013, the regulators have been the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). The Financial Policy Committee (FPC) was also established to supervise the UK financial system and can make recommendations and issue directions regarding systemic risks to the FCA and PRA. The FCA, PRA and FPC are all independent of the Government, although they are all accountable to the Government through the Treasury. The FCA and PRA set the standards that authorised persons and firms must meet. They have powers to enforce these standards and to take action against any firm or person who does not meet the required standard. http://www.xperthr.co.uk/faqs/faqslatest.aspx?articleid=110441&mode=open#110441 xperthr/faqlatest/faqsfaqslatestaspxarticleid110441modeopen110441/whoregulatesthefinancialsystemintheuk The enforcement powers of the Financial Conduct Authority (FCA) include the right to impose a penalty on a firm or person and make a public statement. It also has the power to investigate and take disciplinary action. In addition, the FCA has the power to start criminal proceedings. This is an especially important power when investigating market abuse, insider dealing and other “white-collar” crimes. These powers are used to deter people from breaching FCA rules. There has been an increasing use of higher penalties and more publicity to demonstrate that the FCA is a serious and powerful regulator. The Prudential Regulation Authority (PRA) also has powers available to enforce breaches of PRA rules, although it has stated that it intends to use powers to address emerging risks in order to tackle issues before they require further enforcement actions. http://www.xperthr.co.uk/faqs/faqslatest.aspx?articleid=110442&mode=open#110442 xperthr/faqlatest/faqsfaqslatestaspxarticleid110442modeopen110442/whatpowersareavailabletothefinancialconductauthorityandprudentialregulationauthoritytoenforcetheirrules Most financial services firms have to be authorised by either the Financial Conduct Authority (FCA) or the Prudential Regulation Authority (PRA). The PRA authorises and regulates banks, building societies, credit unions, insurers and those investment firms designated as systemically important. The FCA authorises and regulates the remaining firms. Any firm that wishes to carry out a regulated activity in the course of its business, or that wishes to make a financial promotion, for example advertising a particular investment, needs to be authorised (unless it falls into one of the exemptions). The activities and specified activities that constitute regulated activities are listed in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/544). http://www.xperthr.co.uk/faqs/faqslatest.aspx?articleid=110443&mode=open#110443 xperthr/faqlatest/faqsfaqslatestaspxarticleid110443modeopen110443/whywouldafirmneedtobeauthorisedbythefinancialconductauthorityorprudentialregulationauthority The level and nature of supervision depends on the size and nature of the firm, but both the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) determine the level of supervision required by assessing the risk that each firm poses. The FCA assesses the risk that a firm poses to the FCA statutory objectives, while the PRA assesses the risk posed to the stability of the UK financial system. http://www.xperthr.co.uk/faqs/faqslatest.aspx?articleid=110444&mode=open#110444 xperthr/faqlatest/faqsfaqslatestaspxarticleid110444modeopen110444/whatlevelofsupervisiondoregulatedfirmsreceive Some employers choose to include restrictions on the wearing of jewellery as part of their dress code but these restrictions may lead to complaints of discrimination. In Eweida and others v United Kingdom [2013] IRLR 231 ECHR, the employer’s policy allowed employees to wear religious jewellery only if it was worn under the uniform. The claimant was instructed to remove a cross that she refused to conceal. The European Court of Human Rights (ECHR) held that the claimant's right to freedom of thought, conscience and religion under art.9 of the European Convention on Human Rights had been breached because a fair balance had not been struck between her desire to manifest her religious beliefs and the employer's wish to project a certain corporate image. There was no real evidence that wearing such jewellery would negatively affect the employer's image or brand. Employers should consider whether or not there is a legitimate reason behind a ban on jewellery. Where a ban on jewellery does amount to indirect discrimination, employers may be able to justify the policy if the wearing of jewellery might constitute a health and safety risk, such as where employees are operating potentially dangerous machinery. A dress code that distinguishes between the sexes as to what jewellery may be worn in the workplace might also constitute sex discrimination. In Jarman v The Link Stores Ltd [2004] ET/2505091/03, a male employee was disciplined for refusing to remove his earring and successfully argued that this amounted to sex discrimination. http://www.xperthr.co.uk/faqs/faqslatest.aspx?articleid=98061&mode=open#98061 xperthr/faqlatest/faqsfaqslatestaspxarticleid98061modeopen98061/cananemployerbanjewelleryfromtheworkplace