Under the Pensions Act 2008, employers with at least one person working for them have a number of duties. These include enrolling certain workers (knows as eligible jobholders) into a pension scheme. An employer must:
Mrs S made a complaint against Celebrity Global Holdings Ltd (CGH). Mrs S was one of two employees at CGH. Her employment commenced on 21 November 2018. In early 2019, Mrs S expressed concerns regarding the general operations of the company, one of which was the need to set up a workplace pension. Mrs S did not get very far with her concerns and when no workplace pension had been established by early May 2019, she decided to opt out of any new scheme and have the contributions paid to her pension plan with St James's Place (SJP) via a direct debit mandate. No payments were made by the employer and in November 2019, Mrs S wrote a letter to her employer to say that she considered the breaches as constructive dismissal and her employment was to be treated as terminated. Mrs S brought a claim in the Employment Tribunal (ET) and a complaint with the Pensions Ombudsman (the Ombudsman).
There was a disagreement between the parties about what version of the employment contract was binding. Mrs S' preferred version provided for contributions by the employer of 10% of her salary. The Ombudsman found that the version which stated that CGH would comply with its duties under Part 1 of the Pensions Act 2008 applied. There was no evidence to say that CGH had agreed to the first version of the contract, which provided for employer contributions of 10%.
The Ombudsman upheld Mrs S' complaint that CGH must pay into the qualifying scheme of her choice. However, Mrs S was not entitled to the high level contributions she sought. Instead, CGH was directed to pay outstanding contributions at the lower rate of 2% for the period from December 2018 to March 2019, and at 3% from April to October 2019.
Although this decision is very fact specific, it serves as a useful reminder of the importance of complying with pensions auto-enrolment obligations. It also demonstrates the importance of ensuring terms and conditions of employment are signed by both parties in order to evidence what level of pension contributions are due.