Publication
Supreme Court of Canada rules managers cannot unionize in Quebec
On April 19, 2024, the Supreme Court of Canada handed down the long-awaited decision on the unionization of managers.
Global | Publication | April 2016
The referendum on European Union (EU) membership will be held on Thursday 23 June. The question voters will be asked is “Should the United Kingdom remain a member of the European Union or leave the European Union?”
This briefing looks at some of the issues for pension schemes in the run-up to the referendum and in the event of a vote to leave the EU.
If the UK votes “leave”, the UK Government will need to decide on the structure of the UK’s future relationship with the EU. The consequences of the UK leaving the EU will vary depending on what type of relationship the UK seeks to establish with the EU. There are various options which are broadly as follows:
If the UK leaves the EU, the UK Government would not be under an obligation to retain any legislation derived from EU law. However, any UK primary legislation which has implemented EU law will not automatically fall away. For example, the provisions of the Pensions Act 2004 relating to scheme-specific funding and the Equality Act 2010 relating to discrimination would remain in force, unless and until the Government decided to repeal or re-write them. It is likely that it would take the Government years to work through all EU-derived primary legislation to decide which parts to retain and which to repeal.
Practically, it seems unlikely that the UK Government would decide to repeal the relevant provisions of the Equality Act 2010. In addition, the scheme-funding regime under the Pensions Act 2004 is well-established and is generally accepted to be more effective than the previous minimum funding requirement regime at reflecting the actual funding position of defined benefit schemes.
In addition, if the UK left the EU but negotiated, for example, to join the EEA, it would have to continue to comply with certain EU standards and requirements. These are likely to include much of EU-derived employment law and possibly other areas, such as data protection and the cross-border pension scheme requirements.
If the UK leaves the EU, the European Court of Justice would no longer have jurisdiction over the UK courts, and UK legislation would no longer need to be interpreted in the context of EU law. In addition, even if in the short-term the UK Government decided to retain much of EU-derived legislation, over the long-term, there would be greater flexibility for UK legislation and case law to diverge from EU law.
Future changes which are being proposed by the EU which would affect UK pension schemes are likely to fall away. For example, it is possible that UK pension schemes may not be required to equalise guaranteed minimum pensions (the Government’s view being that it is EU law which drives the requirement to equalise), and the new disclosure, governance and risk assessment obligations which are being proposed by the IORP II Directive, which is expected to be finalised later this year, would not apply to UK schemes.
There could be market volatility in the run-up to the referendum. If the UK votes to leave the EU, there may be a substantial shock to the UK economy. In light of this, trustees may wish to consider the following points.
There is a great deal of uncertainty about the consequences of a vote to leave the EU and there are clearly areas of concern for trustees (and scheme sponsors). However, despite this, there are proactive steps which trustees can take to establish what the effects on their schemes might be in particular scenarios. Trustees should be alert to the possibility of changing market conditions over the next two months in the run-up to the referendum. They can also look at the risks which a vote to leave the EU may pose to their schemes and seek to prepare themselves if these risks materialise.
Publication
On April 19, 2024, the Supreme Court of Canada handed down the long-awaited decision on the unionization of managers.
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