EU fixed term work legislation - which the government has implicitly endorsed - will have a major impact on UK stakeholder schemes, leading pension lawyers warn.
The Department for Trade and Industry is currently working on the new legislation which is now delayed until 2002. It said that offering occupational pensions for fixed term workers would be left up to the discretion of the employer.
But Pinsent Curtis Biddle’s head of pensions, Chris Mullen, pointed out under the terms of the proposed legislation stakeholder schemes would have to be made available to fixed term workers.
Mullen said: “At present employees employed on fixed term contracts of less than three months' duration do not have to be provided with stakeholder access, but we would expect to see this exemption changed in due course.”
According to lawyers, the issue of equality for fixed term workers is unlikely to go away for pension schemes.
The DTI has estimated that giving pension rights to fixed term workers would mean that another 55,000-82,000 people would gain access to occupational pension schemes at a cost of between £33m-£98m.
Sacker & Partners associate Faith Dickson said: “The directive is intended to outlaw less favourable treatment against fixed term employees.
“Exclusion from certain parts of the remuneration package could easily be seen as less favourable treatment – it seems to me unlikely too that the unions and employee representatives will take this lying down.” Dickson also pointed out that fixed term workers on renewable contracts might under the new legislation be considered permanent and thus eligible to join occupational pension schemes.
And Hammond Suddards Edge solicitor Francois Barker believes that other opportunities are open for fixed term workers.
Barker said: “The recent Allonby case (referred by the Court of Appeal to the European Court of Justice) shows how, where more women than men are fixed term employees, allowing only permanent staff into an occupational scheme could be seen as indirect sex discrimination.
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