Earlier this year we published full details about Pensions Auto-Enrolment – from October 2012 most workers will start being auto-enrolled into a pension plan by their employer (under the Pensions Bill that also abolished the Default Retirement Age during 2011).
The start date for the scheme in each Company will be staggered by the size of the business – see the applicable start dates (called the ‘staging’ dates) here.
April 1st 2012 was a crucial date for businesses, as the number of PAYE staff that were employed by an employer at that date determines that ‘staging’ date the employer has to start offering the scheme.
In addition, 1st July 2012 was also a crucial date. From this date safeguards have been put in place (to protect workers’ pension auto-enrolment rights), regardless of the employers actual ‘staging’ date, which mean that Employers from now on must not:
- Encourage workers to opt-out of the pension scheme (e.g. by using inducements to encourage a worker to opt-out – giving a salary increase or one-off bonus payment or offering a promotion in return for a worker opting out).
- Have recruitment practices in place that benefit job applicants who indicate they are prepared to opt out of the scheme, or screen out applicants who wish to join the pension (e.g. the employer must not ask questions or make statements – at any stage of the recruitment process – that state or imply that a job applicant’s success is dependant on whether or not they would opt out of the pension scheme; or for example include an opt-out form as part of a general application pack, or explaining terms and conditions without reference to the pension scheme. Under the Regulations this is called ‘prohibited recruitment conduct’). This also applies to a party acting on the employers behalf, e.g. a Recruitment Agency.
The Pensions Regulator will be responsible for any breaches by an employer in the above two circumstances and has the power to issue a compliance notice requiring the employer to remedy the breach, or prevent it happening again. The employer may be subject to a fine not exceeding £50,000.
An employer must not treat a worker unfairly, put them at a disadvantage or dismiss them because of automatic enrolment (there will be no time limit needed by employees to claim unfair dismissal in these circumstances, and employees can also make a claim to an Employment Tribunal for compensation).
Employees will also be able to ‘whistle-blow’ if the feel they have been subject to detriment or dismissal for making a protected disclosure under whistle-blowing legislation, if their employer fails to comply with the auto-enrolment legislation.
Further details are available at the Pensions Regulator website with their document ‘Safeguarding individuals’.
If you are an Employer and need ongoing professional help with any staff/freelance issues then talk to Lesley at The HR Kiosk – a Human Resources Consultancy for small businesses – our fees are low to reflect the pressures on small businesses and you can hire us for as much time as you need.
Please note that the advice given on this website and by our Advisors is guidance only and cannot be taken as an authoritative or current interpretation of the law. It can also not be seen as specific advice for individual cases. Please also note that there are differences in legislation in Northern Ireland.