Good faith: an employer’s duty

By Jennifer Bell and Neal Gibson

In a bumper 435-page judgment, the High Court has ruled that IBM UK breached its duty of good faith to its employees and former employees. The breach was triggered by the way in which it closed the defined-benefit (DB) sections of its pension schemes to future accrual and introduced new benefit restrictions. The judge (Mr Justice Warren) also found that consultation with employees about the changes was not open or transparent and held that this was also a breach of IBM’s duty of good faith. The remedies flowing from the breaches will be considered at a later hearing.

Nabarro represented the pension scheme trustee in this case.

This case is an important step in establishing the extent of the obligations employers owe their employees and former employees in relation to pension provision. It will be of great interest to any employer who has, or who is considering, ceasing DB accrual or introducing new restrictions on benefits. Key to this decision were the communications issued to members in the months and years before the changes were made — these were found to have given members reasonable expectations as to their future pension benefits…

Click on the link below to read the rest of the Nabarro briefing.

Sign in or Register to continue reading this article

Sign in

Register

It's quick, easy and free!

It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.

Register now

Why register to The Lawyer

 

Industry insight

In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.

 

Market intelligence

Identify the major players and business opportunities within a particular region through our series of free, special reports.

 

Email newsletters

Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.

More relevant to you

To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.

Analysis from The Lawyer

View more analysis from The Lawyer

Overview

Lacon House
84 Theobald's Road
London
WC1X 8RW
UK
http://www.nabarro.com

Turnover (£m): 116.70
No. of lawyers: 405