Q: I run a small business and I have recently attended a seminar on pension auto-enrolment that was organised by my accountant. One of the speakers emphasised the importance of taking legal as well as financial advice, and I am unclear as to what employment law issues could arise as a consequence of auto-enrolment.
A. All employers must comply with the auto-enrolment rules by their particular staging date and ensure eligible job holders, unless they are already active members of a qualifying scheme, are enrolled in an automatic enrolment scheme by that date. If you are unsure about your staging date or any of these terms you should seek immediate professional advice.
The pension clauses in your contracts of employment should accurately reflect the auto-enrolment processes you have put in place. You must provide basic information to your employees regarding pensions, either in a written statement, an employment contract or as a stand-alone document.
It would be prudent for any revised contracts of employment to include a clause permitting you to process your employees' personal data, as this will be required by your pension scheme provider and you could find yourself in breach of the Data Protection Act 1998 if you fail to obtain their prior express consent. You might also consider a deduction from wages clause in relation to the employee's pension contribution sum to be deducted from salary.
There is a myriad of other issues that employers should consider, particularly as failing to consider certain issues could result in claims. You may be able to reduce the administrative burden of auto-enrolment by contractual enrolment. It would wise to seek proper legal advice as early as possible.
Robert Williams
Partner and Complaints Handler
Partner and Head of the Civil Litigation, Personal Injury and Dispute Resolution team in Wrexham