Pensions auto-enrolment: how are staff protected from 1 July 2012?

02 September 2012
Pensions auto-enrolment: how are staff protected from 1 July 2012?

From 1 July, new laws prevent employers from subjecting their staff to unfavourable treatment concerning pensions. There are five main areas to be aware of.

This new protection of staff anticipates the introduction of pensions auto-enrolment in October. From October 2012, large employers are legally obliged to automatically enrol all staff that meet certain minimum criteria, into a suitable pension scheme and to contribute to this pension. This obligation to auto-enrol staff into pension schemes extends to all employers gradually to February 2018.

So how are staff protected from 1 July?

1. Conditions of recruitment
Organisations are not permitted to indicate in recruitment or selection (for example in adverts, application forms or in the interview itself), that someone's appointment might depend upon them opting out of the organisation's pension scheme.

Implications
You may need to update your recruitment policy, procedures or managers' recruitment guidance to clarify that adverts and interviewers should not make offers of employment subject to candidates opting out of the organisation's pension scheme as this is against the law.

2. Inducing staff to opt out of your pension scheme
It is illegal to encourage staff to not join - or to leave - the organisation's pension scheme.

Implications
You may need to update your policies and guidance on conduct. Such policies may include your organisation's code of conduct, your disciplinary policy, induction policy, recruitment policy, staff handbook or pay policy.

3. Subjecting staff to detriment because of pensions auto-enrolment duties or breach of those duties
It is against the law to subject staff to less favourable treatment because they have decided not to opt out of pension scheme membership. The Pensions Regulator guidance gives examples of such treatment as denying a training or promotional opportunity.

Implications
As above. Also consider including a clause in your training or staff development policies to state that staff should not be denied training or development opportunities on the grounds that they have not opted out of the organisation's pension scheme.

4. Dismissing or selecting staff for redundancy where the main reason for this is to do with pensions auto-enrolment
It is against the law to select staff for redundancy or dismissal, on the grounds that they have not opted out of the organisation's pension scheme.

Implications
Consider adding a clause to your organisation's redundancy or disciplinary policies, to state that it is illegal to select staff for redundancy or dismissal on the grounds of pension scheme membership.

5. Removing the employee from membership of a qualifying scheme, without their consent.
The employer must not do anything which takes an employee out of being a pension scheme member without the employee's consent - or which prevents the scheme from being a qualifying scheme.

Implications
Organisations should be familiar with the minimum criteria of a qualifying pension scheme for the purposes of pensions auto-enrolment, and take reasonable care when administrating the scheme and its membership.

More generally, you may find it helpful to provide a short briefing to budget-holders and those selecting candidates at interview, to ensure they are familiar with this update in the law.

For further information, see the Pensions Regulator guidance (opens as a PDF) and the Pensions section of HRBird.

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