Page 31 - London Business Matters May 2020
P. 31

                                   May 2020 Your business 31 sions Regulator, which “polices” this consultation has announced a limited relaxation, otherwise it has the power to issue a £50k fine if the employer fails to satisfy its statutory 60 day pension consultation obliga- tions. The relaxation lasts until 30 June 2020, when the Pensions Reg- ulator will review the position. No action will be taken if: • The employer has furloughed employees and made a claim for them under the Coronavirus Job Retention Scheme. • The employer is only proposing to reduce the employer contri- bution to the DC scheme for furloughed employees, with no change for other employees. • The reduced contribution rate for furloughed employees will only apply during the furlough period. After that it will revert to the normal employer contribu- tion rate. • The employer has written to all affected employees and their representatives to explain its proposed changes, the effects of these on the scheme and on its furloughed employees. Employ- ers are encouraged to do as much consultation as they can. A full 60 day consultation is still required if the employer wants to change employer contributions outside this relaxation. We strongly recommend any employer propos- ing to reduce its employer contribu- tion rates under the relaxation fully documents the steps it has taken to ensure it has a full paper trail if the Pensions Regulator subsequently starts to ask questions. Constructive dismissal It is also separately a change to an employee’s terms and conditions and so the employee could claim constructive dismissal if they do not agree to the change i.e. there is the potential for a breach of con- tract claim. No flexibility Employers should not be en- couraging their employees in any way to opt out of auto-enrolment and it is a statutory offence to do so. An employee must pay the minimum auto-enrolment contri- bution of five per cent on qualify- ing earnings unless the employer pays this. There is no flexibility on this in the auto-enrolment leg- islation. However employees can opt out, and on ceasing active membership, they no longer have to pay contributions. They must then be considered for re-enrol- ment at the employer’s next re-en- rolment date. Employers and employees must otherwise continue to make the contributions required under the scheme at the correct time and the contributions must not be used for any other purpose. Employers and trustees of de- fined benefit schemes will have to work through with their ad- visers how to implement fur- loughing and what impact it will have on defined benefit schemes. Penny Cogher and Larisa Gordan are lawyers at Irwin Mitchell                           LOOKING FOR APPRENTICES TO GROW YOUR BUSINESS? Croydon College is one of the largest providers of Apprenticeships in the South, helping guide businesses to grow and develop while utilising specialist skills and expertise. We work with a whole host of employers providing high quality apprenticeship training in areas including: Construction I Engineering I Accountancy I Childcare I Business Administration I Hospitality and Catering I Customer Service To find out more please contact 020 8686 5700               CC_Ad_185x130mm_v3_March.indd 1 10/03/2020 09:02 

   29   30   31   32   33