Enterprise and Regulatory Reform Bill (HL Bill 45)
PART 6 continued
Contents page 1-9 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80-89 90-99 100-109 110-119 120-129 130-139 140-149 150-159 160-169 170-179 Last page
Enterprise and Regulatory Reform BillPage 70
(2)
The approved directors’ remuneration policy is the most recent
remuneration policy to have been approved by a resolution passed by
the members of the company in general meeting.
226C Loss of office payments
(1)
5No payment for loss of office may be made by any person to a person
who is, or has been, a director of a quoted company unless—
(a)
the payment is consistent with the approved directors’
remuneration policy, or
(b)
the payment is approved by resolution of the members of the
10company.
(2)
The approved directors’ remuneration policy is the most recent
remuneration policy to have been approved by a resolution passed by
the members of the company in general meeting.
226D Sections 226B and 226C: supplementary
(1)
15A resolution approving a payment for the purposes of section
226B(1)(b) or 226C(1)(b) must not be passed unless a memorandum
setting out particulars of the proposed payment (including its amount)
is made available for inspection by the members of the company—
(a)
at the company’s registered office for not less than 15 days
20ending with the date of the meeting at which the resolution is to
be considered, and
(b) at that meeting itself.
(2)
The memorandum must explain the ways in which the payment is
inconsistent with the approved directors’ remuneration policy (within
25the meaning of the section in question).
(3)
The company must ensure that the memorandum is made available on
the company’s website from the first day on which the memorandum
is made available for inspection under subsection (1) until its next
accounts meeting.
(4)
30Failure to comply with subsection (3) does not affect the validity of the
meeting at which a resolution is passed approving a payment to which
the memorandum relates or the validity of anything done at the
meeting.
(5)
Nothing in section 226B or 226C authorises the making of a
35remuneration payment or payment for loss of office in contravention of
the articles of the company concerned.
(6)
In this section the “company’s website” is the website on which the
company makes material available under section 430.
Supplementary
226E 40Payments made without approval: civil consequences
(1)
An obligation (however arising) to make a payment which would be in
contravention of section 226B or 226C has no effect.
(2)
Subject to subsections (3) and (4), if a payment is made in contravention
of section 226B or 226C—
Enterprise and Regulatory Reform BillPage 71
(a)
it is held by the recipient on trust for the company or other
person making the payment, and
(b)
in the case of a payment by a company, any director who
authorised the payment is jointly and severally liable to
5indemnify the company that made the payment for any loss
resulting from it.
(3)
If a payment for loss of office is made in contravention of section 226C
to a director of a quoted company in connection with the transfer of the
whole or any part of the undertaking or property of the company or a
10subsidiary of the company, it is held by the recipient on trust for the
company whose undertaking or property is or is proposed to be
transferred.
(4)
If a payment for loss of office is made in contravention of section 226C
to a director of a quoted company in connection with a transfer of
15shares in the company, or in a subsidiary of the company, resulting
from a takeover bid—
(a)
it is held by the recipient on trust for persons who have sold
their shares as a result of the offer made, and
(b)
the expenses incurred by the recipient in distributing that sum
20amongst those persons shall be borne by the recipient and not
retained out of that sum.
226F Relationship with requirements under Chapter 4
(1)
This Chapter does not affect any requirement for approval by a
resolution of the members of a company which applies in relation to the
25company under Chapter 4.
(2)
Where the making of a payment to which section 226B or 226C applies
requires approval by a resolution of the members of the company
concerned under Chapter 4, approval obtained for the purposes of that
Chapter is to be treated as satisfying the requirements of section
30226B(1)(b) or (as the case may be) 226C(1)(b).”
72 Payments to directors: minor and consequential amendments
(1) The Companies Act 2006 is amended as follows.
(2) In section 180 (consent, approval or authorisation by members)—
(a) in subsection (2), in the words before paragraph (a)—
(i) 35after “Chapter 4” insert “or 4A”, and
(ii) for “that Chapter” substitute “either of those Chapters”,
(b)
in that subsection, in paragraph (a), for “that Chapter” substitute “the
Chapter concerned”, and
(c) in subsection (3), after “Chapter 4” insert “or 4A”.
(3)
40In section 190 (substantial property transactions: requirement of members’
approval), in subsection (6)(b), for the words in brackets substitute “(payments
to which the requirements of Chapter 4 or 4A apply)”.
(4) In section 215 (payments for loss of office), after subsection (4) insert—
“(5)
Nothing in this section or sections 216 to 222 applies in relation to a
45payment for loss of office to a director of a quoted company.”
Enterprise and Regulatory Reform BillPage 72
(5)
Section 430 (quoted companies: annual accounts and reports to be made
available on website) is amended as follows.
(6) After subsection (2) insert—
“(2A)
If the directors’ remuneration policy of a quoted company is revised in
5accordance with section 422A, the company must ensure that the
revised policy is made available on the website on which its annual
accounts and reports are made available.
(2B)
If a person ceases to be a director of a quoted company, the company
must ensure that the following information is made available on the
10website on which its annual accounts and reports are made available—
(a) the name of the person concerned, and
(b)
particulars of any payment for loss of office (within the meaning
of Chapter 4A of Part 10) made to the person, including its
amount and how it was calculated.”
(7) 15In subsection (3) —
(a)
for “the annual accounts and reports on the website” substitute “the
material made available on the website under subsections (1) to (2B)”,
and
(b)
for “the annual accounts and reports from” substitute “such material
20from”.
(8) After subsection (4) insert—
“(4A) Where subsection (2A) or (2B) applies, the material in question—
(a) must be made available as soon as reasonably practicable, and
(b)
must be kept available until the next directors’ remuneration
25report of the company is made available on the website.”
(9) In subsection (5)—
(a)
in the words before paragraph (a), for the words from “the annual
accounts and reports” to “that period” substitute “material available on
a website throughout the period mentioned in subsection (4) or (as the
30case may be) (4A)”, and
(b)
in paragraph (a) for “the annual accounts and reports are” substitute
“the material is”.
(10)
In section 440 (quoted companies: offences in connection with procedure for
approval)—
(a) 35in subsection (1) —
(i) after “section 439(1)” insert “or 439A(1) or (2)”, and
(ii) in the words in brackets, after “report” insert “or policy”,
(b)
in subsection (2), for “the accounts meeting” substitute “the meeting to
which it relates”, and
(c) 40in subsection (5), omit the definition of “the accounts meeting”.
(11) In Schedule 8 (in the index of defined expressions), at the appropriate places
Enterprise and Regulatory Reform BillPage 73
insert—
“directors’ remuneration policy (in Chapter 4A of Part 10) |
section 226A(1)” 5 |
“payment for loss of office (in Chapter 4A of Part 10) |
section 226A(1)” |
“remuneration payment (in Chapter 4A of Part 10) |
10section 226A(1)”. |
(12) In that Schedule, after “quoted company”, insert—
“—in Chapter 4A of Part 10 | 15section 226A(1)”. |
73 Payments to directors: transitional provision
(1)
Subsection (2) of section 439A of the Companies Act 2006 (as inserted by
section 70(4) of this Act) does not apply in relation to a company prior to the
holding of the meeting mentioned in subsection (1)(a) of that section of that Act
20of 2006.
(2)
Chapter 4A of Part 10 of the Companies Act 2006 (as inserted by section 71)
does not apply in relation to remuneration payments or payments for loss of
office made by a company before the earlier of—
(a)
the end of the first financial year of the company to begin on or after the
25day on which that section of this Act comes into force, and
(b)
the date from which the first directors’ remuneration policy to be
approved under section 439A of the Companies Act 2006 (as inserted
by section 70(4) of this Act) takes effect.
(3)
Chapter 4A of Part 10 of the Companies Act 2006 does not apply in relation to
30remuneration payments or payments for loss of office that are required to be
made under an agreement entered into before 27 June 2012 or in consequence
of any other obligation arising before that date.
(4)
An agreement entered into, or any other obligation arising, before 27 June 2012
that is modified or renewed on or after that date is to be treated for the
35purposes of subsection (3) as having been entered into or (as the case may be)
as having arisen on the date on which it was modified or renewed.
Enterprise and Regulatory Reform BillPage 74
(5)
The amendment made by section 72(4) does not apply in relation to a payment
for loss of office to which subsection (2) or (3) of this section applies.
Equal pay audits
74 Power to provide for equal pay audits
(1) 5The Equality Act 2010 is amended as follows.
(2) After section 139 insert—
“139A Equal pay audits
(1)
Regulations may make provision requiring an employment tribunal to
order the respondent to carry out an equal pay audit in any case where
10the tribunal finds that there has been an equal pay breach.
(2) An equal pay breach is—
(a) a breach of an equality clause, or
(b)
a contravention in relation to pay of section 39(2), 49(6) or 50(6),
so far as relating to sex discrimination.
(3)
15An equal pay audit is an audit designed to identify action to be taken
to avoid equal pay breaches occurring or continuing.
(4)
The regulations may make further provision about equal pay audits,
including provision about—
(a) the content of an audit;
(b)
20the powers and duties of a tribunal for deciding whether its
order has been complied with;
(c)
any circumstances in which an audit may be required to be
published or may be disclosed to any person.
(5)
The regulations must provide for an equal pay audit not to be ordered
25where the tribunal considers that—
(a)
an audit completed by the respondent in the previous 3 years
meets requirements prescribed for this purpose,
(b)
it is clear without an audit whether any action is required to
avoid equal pay breaches occurring or continuing,
(c)
30the breach the tribunal has found gives no reason to think that
there may be other breaches, or
(d)
the disadvantages of an equal pay audit would outweigh its
benefits.
(6)
The regulations may make provision for a failure to comply with an
35order to be enforced, otherwise than as an offence, by such means as are
prescribed.
(7)
The first regulations under this section must provide for the
requirement to impose an order for an equal pay audit not to apply in
relation to a respondent whose business is defined in the regulations as
40a start-up or micro-business unless further provision is made under
this section.”
(3)
In section 207(6) (exercise of power to make subordinate legislation: power to
amend enactments) after “37,” and after “in the case of section” insert “139A,”.
Enterprise and Regulatory Reform BillPage 75
(4)
In section 208(5) (subordinate legislation by Ministers of the Crown etc:
affirmative procedure) after paragraph (e) insert—
“(ea) regulations under section 139A (equal pay audits);”.
General
75 5Consequential amendments, repeals and revocations
(1)
The Secretary of State may by order made by statutory instrument make such
provision as the Secretary of State considers appropriate in consequence of this
Act.
(2) The power conferred by subsection (1) includes power—
(a) 10to make transitional, transitory or saving provision;
(b)
to amend, repeal, revoke or otherwise modify any provision made by
or under an enactment (including any enactment passed or made in the
same Session as this Act).
(3)
An order under subsection (1) which makes provision for the transfer of a
15function from the Competition Commission or the Office of Fair Trading to the
Competition and Markets Authority in consequence of Part 3 of this Act may
make such modifications to the function as the Secretary of State considers
appropriate in consequence of the transfer.
(4)
The modifications mentioned in subsection (3) may, in particular, alter the
20circumstances in which, or the conditions under which, the function is
exercisable.
(5)
A statutory instrument containing (whether alone or with other provision) an
order under this section which amends, repeals or revokes any provision of
primary legislation is not to be made unless a draft of the instrument has been
25laid before, and approved by a resolution of, each House of Parliament.
(6)
A statutory instrument containing an order under this section which does not
amend, repeal or revoke any provision of primary legislation is subject to
annulment in pursuance of a resolution of either House of Parliament.
(7) In this section—
-
30“enactment” includes an Act of the Scottish Parliament, a Measure or Act
of the National Assembly for Wales and Northern Ireland legislation; -
“primary legislation” means—
(a)an Act of Parliament,
(b)an Act of the Scottish Parliament,
(c)35a Measure or Act of the National Assembly for Wales, and
(d)Northern Ireland legislation.
76 Transitional, transitory or saving provision
The Secretary of State may by order made by statutory instrument make such
transitional, transitory or saving provision as the Secretary of State considers
40appropriate in connection with the coming into force of any provision of this
Act.
Enterprise and Regulatory Reform BillPage 76
77 Financial provision
There is to be paid out of money provided by Parliament—
(a)
any expenditure incurred under or by virtue of this Act by the Secretary
of State or the Competition and Markets Authority, and
(b)
5any increase attributable to this Act in the sums payable under any
other Act out of money so provided.
78 Extent
(1) Part 1 extends to England and Wales, Scotland and Northern Ireland.
(2)
Part 2 extends only to England and Wales and Scotland, except that the
10following provisions of that Part extend also to Northern Ireland—
(a) section 18(3);
(b) paragraph 11 of Schedule 1;
(c) paragraphs 36 to 39 of Schedule 2.
(3)
Part 3 extends to England and Wales, Scotland and Northern Ireland, except as
15follows—
(a)
paragraphs 15 to 44, 69 to 84 and 101 to 107 of Schedule 6 extend only
to England and Wales and Scotland;
(b)
paragraphs 52 to 68, 96, 108 to 123 and 127 to 139 of that Schedule
extend only to England and Wales;
(c)
20paragraphs 9 to 14, 45 to 51, 171 to 180 and 192 to 209 of that Schedule
extend only to Scotland;
(d)
paragraphs 149 to 170 and 181 to 191 of that Schedule extend only to
Northern Ireland.
(4)
Part 4 extends to England and Wales, Scotland and Northern Ireland, except as
25follows—
(a)
paragraphs 1 to 7 and 11 to 14 of Schedule 14 and paragraphs 2, 3, 7, 13
and 41 of Schedule 15, extend only to England and Wales and Scotland;
(b)
paragraphs 8 to 10 and 20 to 22 of Schedule 14, and paragraphs 4 to 6
and 47 to 49 of Schedule 15, extend only to England and Wales;
(c)
30paragraphs 23 to 29 of Schedule 14, and paragraphs 53 to 55 of Schedule
15, extend only to Northern Ireland.
(5) Part 5 extends as follows—
(a)
sections 51, 54, 59, 60 and 62 and Part 1 of Schedule 20 extend to
England and Wales, Scotland and Northern Ireland,
(b)
35section 61 extends only to England and Wales and Scotland except that
it also extends to Northern Ireland so far as Parts 1 and 4 of the Health
and Safety at Work etc. Act 1974 extend there,
(c)
sections 56, 57 and 58 and paragraphs 1, 52 to 54, 56 and 62 of Schedule
19 extend only to England and Wales and Scotland, and
(d)
40sections 52, 53, 55 and 63, Schedules 16, 17 and 18, paragraphs 2 to 51,
55, 57 to 61 of Schedule 19 and Parts 2 and 3 of Schedule 20 extend only
to England and Wales.
(6)
If a provision repealed by Part 1 of Schedule 20 extends to the Isle of Man or
any of the Channel Islands, Her Majesty may by Order in Council extend the
45repeal there.
Enterprise and Regulatory Reform BillPage 77
(7)
This Part extends to England and Wales, Scotland and Northern Ireland except
that section 74 extends only to England and Wales and Scotland.
79 Commencement
(1) Sections 75 to 80 come into force on the day on which this Act is passed.
(2)
5The following provisions come into force at the end of the period of 2 months
beginning with the day on which this Act is passed—
(a) section 54;
(b) section 56;
(c) section 74;
(d)
10paragraphs 7 and 8 of Schedule 17 (and section 55 so far as it relates to
them);
(e) Parts 1 and 2 of Schedule 20 (and section 64 so far as it relates to them).
(3)
The remaining provisions of this Act come into force on such day as the
Secretary of State may by order made by statutory instrument appoint.
(4)
15An order under subsection (3) may appoint different days for different
purposes.
80 Short title
This Act may be cited as the Enterprise and Regulatory Reform Act 2012.
Enterprise and Regulatory Reform BillPage 78
SCHEDULES
Section 7
SCHEDULE 1 Conciliation: minor and consequential amendments
Trade Union and Labour Relations (Consolidation) Act 1992 (c. 52)Trade Union and Labour Relations (Consolidation) Act 1992 (c. 52)
1
5In section 288 of the Trade Union and Labour Relations (Consolidation) Act
1992 (restriction on contracting out), in subsection (2), for “section 18”
substitute “any of sections 18A to 18C”.
Employment Tribunals Act 1996 (c. 17)Employment Tribunals Act 1996 (c. 17)
2 The Employment Tribunals Act 1996 is amended as follows.
3
10In section 7 (employment tribunal procedure regulations), in subsection
(3ZA)(b), after “form” insert “(including certificates issued under section
18A(4))”.
4
In section 7B (mediation), in subsection (5), for “the Advisory, Conciliation
and Arbitration Service” substitute “ACAS”.
5 (1) 15Section 18 (conciliation) is amended as follows.
(2) At the end of the heading insert “: relevant proceedings etc.”
(3)
In subsection (1), for the words before paragraph (a) substitute “In this
section and sections 18A to 18C “relevant proceedings” means employment
tribunal proceedings—”.
(4) 20In subsection (1)(b)—
(a) after “68” insert “, 70B”;
(b) after “Act 1992” insert “or paragraph 156 of Schedule A1 to that Act”.
(5) In subsection (1)(dd), for “20(1)(a)” substitute “19D(1)(a)”.
(6) Omit subsection (1)(f) and (n).
(7) 25After subsection (1) insert—
“(1A)
Sections 18A and 18B apply in the case of matters which could be the
subject of relevant proceedings, and section 18C applies in the case
of relevant proceedings themselves.”
(8) Omit subsections (2) to (5).
(9)
30In subsections (6) and (7), for “this section” substitute “any of sections 18A
to 18C”.
Enterprise and Regulatory Reform BillPage 79
6 After section 18B (inserted by section 7(1)) insert—
“18C Conciliation after institution of proceedings
(1)
Where an application instituting relevant proceedings has been
presented to an employment tribunal, and a copy of it has been sent
5to a conciliation officer, the conciliation officer shall endeavour to
promote a settlement—
(a)
if requested to do so by the person by whom and the person
against whom the proceedings are brought, or
(b)
if, in the absence of any such request, the conciliation officer
10considers that the officer could act under this section with a
reasonable prospect of success.
(2)
Where a person who has presented a complaint to an employment
tribunal under section 111 of the Employment Rights Act 1996 has
ceased to be employed by the employer against whom the complaint
15was made, the conciliation officer may in particular—
(a)
seek to promote the reinstatement or re-engagement of the
complainant by the employer, or by a successor of the
employer or by an associated employer, on terms appearing
to the conciliation officer to be equitable, or
(b)
20where the complainant does not wish to be reinstated or re-
engaged, or where reinstatement or re-engagement is not
practicable, and the parties desire the conciliation officer to
act, seek to promote agreement between them as to a sum by
way of compensation to be paid by the employer to the
25complainant.
(3)
In subsection (1) “settlement” means a settlement that brings
proceedings to an end without their being determined by an
employment tribunal.”
7
In section 19A (conciliation: recovery of sums payable under compromises),
30in subsection (1)(a)(i), for “section 18” substitute “any of sections 18A to
18C”.
8
In section 40 (power to amend Act), in subsection (2), omit the words from
“and to section 18” to the end.
9 In section 42 (interpretation), in subsection (1)—
(a) 35before the definition of “the Appeal Tribunal” insert—
-
““ACAS” means the Advisory, Conciliation and
Arbitration Service,”;
(b)
in the definition of “conciliation officer” for “the Advisory,
Conciliation and Arbitration Service” substitute “ACAS”.
40Employment Rights Act 1996 (c. 18)Employment Rights Act 1996 (c. 18)
10
In section 203 of the Employment Rights Act 1996 (restrictions on
contracting out), in subsection (2)(e), for “section 18” substitute “any of
sections 18A to 18C”.