Section 46 of the Employment Rights Act 1996 (ERA) provides that an employee who is a trustee of an occupational pension scheme may not be subject to any detriment by their employer on the ground that they performed any function as a trustee of the scheme. In a recent case, Folarin -v- Transport for London, the Employment Tribunal (ET) considered whether the treatment of an employee who was a trustee of her employer’s pension scheme amounted to a detriment for the purposes of s.46 of the ERA. 

The employee, F, had been working as an Internal Auditor for Transport for London since 2008. In March 2019, F was appointed as a trustee of the TfL Pension Fund Board. Following that appointment, F felt that she was not supported in her trustee role and subsequently brought a claim against her employer on the basis that she had suffered various detriments in relation to her work, on the grounds that she was a trustee of TfL’s pension scheme. Among others, the alleged detriments included informing F that she would be expected to undertake her pension trustee duties in her own time and failing to reduce her workload at all (or to a sufficient extent) following her appointment as trustee. Although F had been allowed time off to attend meetings and complete the required training, initially her workload and performance targets were not adjusted to take account of her trustee duties and she was expected to complete five audits per year, in line with her colleagues. 

The ET found that F had no statutory or contractual right to a reduced workload to reflect the extent of her trustee duties. The ET also found that it was reasonable for F to carry out at least some of her trustee duties outside core working hours. 

On the face of it, the ET decision in Folarin seems to suggest that pension scheme trustees would not be entitled to any level of reduction in workload or targets to reflect time spent on trustee duties or training. However, the ET only stated that there is no right to a reduction to fully reflect the extent of the trustee duties which leaves the possibility that a partial reduction would be appropriate - particularly given the ET’s further finding that it is reasonable to carry out some trustee duties outside of working hours. 

The law gives an element of protection to employed trustees under s.58 of the ERA, which provides that employers are required to permit an employee who is a pension scheme trustee to take reasonable time off during their working hours to perform trustee duties or any relevant training. However, reasonableness is to be assessed in view of how much time off is required to perform the duties or take necessary training and the circumstances of the employer’s business/the effect of the employee’s absence on that business. What is reasonable is therefore context dependent.

Folarin itself involves a detailed factual background, including an evolving understanding of what is required of trustees, which will be of relevance to the findings made. However, it serves to highlight that the law does not provide employed pension trustees with a clear entitlement to reduce their workload fully or partially to reflect the time required to fulfil the ever-expanding duties placed on pension trustees. Trustees and managers are left grappling with the question of what is reasonable in the context of the complexity of the particular pension scheme and the needs of the business. 

Together with the onerous nature of being a pension trustee, the fact that it could be a lottery as to whether workloads will be adjusted to take account of time spent on trustee duties has the potential to make the role unattractive. Perhaps if there is a real desire to improve the standards of trustee governance, and also to increase the diversity of trustee boards as advocated for by The Pensions Regulator, it is time to recognise that greater clarity is needed in terms of the rights of employed pension trustees when fulfilling such duties.

Paula Warnock (Partner) and Frances Bailey (Trainee) - Pensions