Have you checked your contracts of employment?

April 29th, 2014

If your staging date is looming, remember that your duties do not necessarily end at complying with your statutory obligations. Some employees may be contractually entitled to more generous pension contributions than those you will be offering under the auto-enrolment regime. Alternatively, the contract may refer to membership of a pension scheme other than the one you will be using to satisfy your auto-enrolment obligations. In such cases, you will need to change employees’ contractual terms of employment. If you do not have a right to do so, both parties will need to agree to the changes. Employers typically adopt an escalating approach to making these changes:

1. Individual consultation with a view to obtaining an employee’s express consent to the proposed change. This will usually involve a degree of negotiation, especially where employees are being asked to give up rights favourable to them.

2. Unilaterally imposing the change and using the employee’s conduct in continuing to work as implied agreement. It should be made clear that, by continuing to work, employees will be taken to have agreed to the change. A record of this communication should be kept with the employee’s contract. If an employee objects to the change, this may result, in extreme cases, in an employee either claiming breach of contract or resigning and claiming constructive unfair dismissal.

3. Dismissing the employee and offering to reengage them on the new terms. This should be used as a last resort as it is still a dismissal in law and therefore carries all the associated risks. If you are proposing to dismiss 20 or more employees in a 90-day period, you must comply with the collective redundancy consultation regime.


For more information, please click here for the full article on the NAPF website.