Laura Pearce, Senior Solicitor
Pension Auto Enrolment – Employment Protection Safeguards
DENTAL BULLETIN, ISSUE 12
The Pensions Act contains specific duties for employers to safeguard their workers’ rights in connection with auto enrolment. It should be noted that these safeguards apply regardless of whether you have reached your staging date yet, and will apply to current and potential job holders. Below is a brief outline of the employment protection safeguards currently in place; a more detailed look at these can be found here.
Prohibited Recruitment Conduct
Employers must not ask questions or make statements as part of the recruitment process that indicate that an individual’s application may depend on whether or not they opt out of auto-enrolment. This is enforced by the Pensions Regulator; it does not give rise to a separate claim in the Employment Tribunal by the individual.
Inducements
This is any action which has the sole or main purpose of inducing a job holder to either opt out or leave a pension scheme, or inducing an entitled worker to leave a pension scheme. An example of this would be re-negotiating contractual terms at a lesser rate if the sole or main purpose is to take into account the cost of implementing pension auto-enrolment for that individual. Again this is enforced by the Pensions Regulator; it does not give rise to a separate claim by the individual.
Right not to Suffer a Detriment
A worker has the right not to suffer a detriment by their employer on the grounds that: •any action was taken, or was proposed to be taken, with a view to enforcing a requirement under the auto-enrolment regime in favour of the worker; or
- the employer was prosecuted for an offence under section 45 of the PA 2008 as a result of action taken for the purpose of enforcing a requirement of the auto-enrolment regime in favour of the worker; or
- any requirement of the auto-enrolment regime applies to the worker, or will or might apply.
If a worker does suffer a detriment then this will give rise to a claim that can be pursued in the Employment Tribunal. As above, re-negotiating terms could be seen as detrimental treatment. Alternatively, offering new workers lower rates to take into account the direct cost of pension auto-enrolment for that individual could be seen as a detriment.
The situation may be different if pension auto enrolment causes your Practice financial hardship; this could potentially be seen as a valid reason to re-negotiate contracts. However, this will be fact sensitive depending on the circumstances of your business, so if you are planning to take direct action then you should seek specific legal advice.
Automatic Unfair Dismissal
If you dismiss an employee and the main or principal reason for that dismissal is one of the three points highlighted above under ‘right not to suffer a detriment’ then that dismissal will be deemed automatically unfair and the employee can pursue an Employment Tribunal claim. This right only applies to employees; not workers.
Whistleblowing
Workers are already protected from detrimental treatment as a result of blowing the whistle on their employer. If a worker makes a complaint to the Pensions Regulator and suffers a detriment as a result of such a complaint, then they will have protection under whistleblowing legislation. In the case of a worker this could include their contract being terminated; so whilst they may not have a right to claim unfair dismissal they may have a claim for whistleblowing.
For more information on your duties and the consequences of non-compliance you can visit the Pensions Regulator website. Alternatively, if you need legal advice in relation to any specific action you are considering taking as a result of pension auto enrolment, please do not hesitate to contact Laura Pearce on 020 7388 1658, or email her at lpearce@jfhlaw.co.uk.
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Please note that the information contained in this article was correct at the time of writing. There may have been updates to the law since the article was written, which may affect the information and advice given therein.
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