Section 312C | Section 312B: the participation and equality requirements ^F1

(1)For the purposes of section 312B—^F1

(a)the participation requirement is that all persons in relevant employment when the award is determined must be eligible to participate in that and any other award under the scheme, and^F1

(b)the equality requirement is that every employee who participates in an award under the scheme must do so on the same terms.^F1

(2)A person is in “relevant employment” if—^F1

(a)where E is a member of a group, the person is employed by any company which is a member of the group, and^F1

(b)in any other case, the person is employed by E.^F1

(2A)The participation requirement is not infringed by reason of the exclusion of directors of the company from participating in an award.^F1F2

(3)The participation requirement is not infringed by reason of a person in relevant employment being excluded from participating in an award because, at the time the award is determined, the person has less than the minimum period of continuous service in relevant employment required by E.But the minimum period required by E for this purpose must not exceed 12 months.^F1

(4)The participation requirement is not infringed—^F1

(a)by reason of a person being excluded from participating in an award where—^F1

(i)disciplinary proceedings have been taken against the person by E which have resulted in a finding of gross misconduct against the person, and^F1

(ii)that finding was made in the period of 12 months immediately before the time the award is determined,^F1

(b)by reason of a person's eligibility to participate in an award being conditional, in a case where the person is at the time of the award subject to disciplinary proceedings taken by E, upon those proceedings being concluded and no finding of gross misconduct being made against that person, or^F1

(c)by a person being treated as never having been eligible to participate in an award where, after the award was made but before the payment is made—^F1

(i)a finding of gross misconduct is made against that person in disciplinary proceedings taken by E after the award was made, or^F1

(ii)that person is summarily dismissed from the employment.^F1

(5)The equality requirement is infringed if the amount of an award to an employee under the scheme is determined by reference to factors other than those mentioned in subsection (6).^F1

(6)The equality requirement is not infringed by reason of the amount of an award under the scheme to employees participating in the award being determined by reference to—^F1

(a)an employee's remuneration,^F1

(b)an employee's length of service, or^F1

(c)hours worked by an employee;^F1

but this is subject to subsections (7) and (8).

(7)The equality requirement is infringed if an award is made on terms such that some (but not all) of the employees participating in the award receive nothing.^F1

(8)If the amount of an award is determined by reference to more than one of the factors mentioned in subsection (6), the equality requirement is infringed unless—^F1

(a)each factor gives rise to a separate entitlement related to the level of remuneration, length of service or (as the case may be) hours worked, and^F1

(b)the total entitlement is the sum of those separate entitlements.^F1

(9)Subject to subsection (6), the equality requirement is infringed if any feature of the scheme has, or is likely to have, the effect of conferring benefits wholly or mainly on those participating in the award who are—^F1

(a)directors or former directors, or^F1

(b)employees receiving the higher or highest levels of remuneration, or^F1

(c)employees who—^F1

(i)are employed in a particular part of the business carried on by E or, if E is a member of a group, the group, or^F1

(ii)carry on particular kinds of activities.^F1

(10)In subsections (1)(b), (5), (6), (7) and (9) references to an employee include a former employee, so, when applying those subsections in relation to a former employee, any reference to remuneration, length of service, hours worked, being employed in a particular part of a business or carrying on particular activities is to be read as relating to that former employment.^F1