Daer Members,

ARC has recently been contacted by two member firms regarding two, quite separate, but equally important, areas to an employer and/or an employee.

Nick Elwell-Sutton at Clyde & Co brings to us an interest in TUPE and potential standardisation of the transfer process.

Peter Taylor of Lovells LLP references the EHRC enquiry into sex discrimination in the financial services sector in the UK.

If you would be interested in more detail or in talking about either subject further please contact us initially at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it   and we will coordinate your replies.

TUPE

At present in many (if not most) transactions involving run off, issues arise on the applicability of TUPE - that is the statutory provision protects employees' rights on the sale of a business or a change of service provider - and which means that employees often transfer from one run off provider to another.  

At present transaction documents giving rise to the sale are individually negotiated dealing with TUPE issues and which inevitably is a serious bone of contention - whether employees are going to transfer, how are they to be correctly identified as being assigned to the book being sold, who is going to pay redundancy costs and any other number of issues that generally get in the way of the commercial drivers behind a transaction.

As a result of this we are canvassing views as to whether the run-off market (in conjunction with ARC) would be interested in some standard documentation being drawn up dealing with TUPE issues and which could then become market practice/standard in a similar way to the standard documentation developed by the Loan Market Association for the benefit of the banking industry.

The benefits would include:

• introduction of market practice and expectation;
• reduced transactional costs;
• early focus on employee/TUPE issues; and
• recognition for ARC in the development of positive benefits for the market.

If there is an appetite for this among ARC members then we would propose that a working party of interested stakeholders is formed with a view to agreeing what market practice is or should be and then following through to produce some standard provisions reflecting this for use in transactional documents

SEXUAL DISCRIMINATION

The EHRC has now published the final terms of reference for its inquiry. Initially, it was not clear which organisations would be affected by the inquiry, as there was talk in the draft terms of reference of specific sub-sectors of the financial services sector being affected. However, the EHRC has now confirmed that the inquiry will cover financial services as a whole.

This will include retail and investment banking as well as organisations providing insurance and pensions and those involved in activities auxiliary to financial intermediation.

The terms of reference confirm that the inquiry will focus on:

• the gender pay gap and pay trends across "the financial services sector", in particular the impact of discretionary bonuses and incentives;
• sex discrimination in relation to recruitment, terms and conditions, promotion, career paths, retention and workplace culture across the sector;
• measures used to address discrimination and pay/ status inequality, including their effectiveness; and
• the differential impact of job losses across the sector.

Questionnaires are to be issued to employers within the sector about their pay systems, grading structures and other arrangements affecting women in the workforce. Employees and ex-employees have already been invited to give their views to the inquiry through a general call for evidence, as have trade unions and claimant legal advisers. Meetings will be conducted to gather oral evidence and the final report will be published in the late summer.

Please note that the Call for Evidence for the EHRC expired on 9 June.

Details for reference below per EHRC website: http://www.equalityhumanrights.com/legislative-framework/formal-inquiries/inquiry-into-sex-discrimination-in-the-finance-sector/official-notice

We will link to the final report once it is in the public domain