UK - Firms will have to consult staff before changing pension arrangement under draft regulations from the department of trade and industry.
The new regulations – High Performance Workplaces: Informing and Consulting Employees – aim to bring UK legislation in line with a European Commission directive which takes effect from March 2005.
Unions have welcomed the move which, they say, will see the balance of power over benefits swing to the side of employees.
Amicus AEEU pensions officer Julian Richards stressed that the power to change benefits had previously rested far too much in the hands of the employer.
“Clearly, the employer has a key and significant role in the contributions that they make to scheme sponsoring and continuing to run the scheme.
“But we don’t think it is right they should be able to act unilaterally in making fundamental changes.”
Richards said the union would like to see the legislation expanded “as fully as possible” to ensure that any proposed changes to workers’ pensions were properly discussed through consultation with staff.
Sacker & Partners partner Peter Docking stressed many companies already consulted with employees because of their duty of good faith. But he said the EU directive would formalise the practice.
“What I think we will see more of is an increased member awareness and knowledge of pensions issues and more of a willingness on the part of members to challenge future pension changes.
“Formal statutory constitution processes will strengthen this trend.”
The deadline for responses to the DTI paper is November 7, 2003.
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