Employers oppose new pension regulations for fixed-term workers

Employers
have opposed government plans to add pensions to new regulations on fixed term
workers, which they claim will prove bureaucratic, expensive and unworkable.

The
CBI and the Employers Forum on Statute and Practice are unhappy that the latest
draft of the Fixed Term Employee Regulations will give workers on fixed term
contracts the same rights to company pensions as permanent staff.

The
regulations, which are subject to a three-month consultation period, will be
implemented in the UK on 10 July this year under the EC Fixed Term Workers
Directive.

The
CBI estimates many fixed term workers will leave schemes before they have been
in employment long enough to qualify for a pension, resulting in an estimated
£13m in unnecessary administration costs and £98m in extra pension
contributions.

Susan
Anderson, CBI director of HR policy, said: “This pensions proposal is at best
ineffective and at worst very damaging. It will not benefit employees and
employers will get a real administrative headache. Firms will want to know why
the UK is choosing to go beyond the requirements of the EU Directive on fixed
term work.”

Anderson
added that most employers normally provide fixed term workers access to a
stakeholder rather than a company pension.

Robbie
Gilbert, chief executive of the EFSP, urged the government to re-think the
proposal.

He
said: “Including pensions in the regulations will affect the way companies use
people on fixed term contracts. It may push them towards using agency staff
rather than direct employment. It may also lead to still more company pension schemes
being closed to new admissions.”

Employers
have until 12 April to submit their views on the latest draft of the Fixed Term
Employee Regulations, which aim to give fixed term employees the right not to
be treated less favourably than a comparable permanent employee.

www.dti.gov.uk

By Ben Willmott

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