Pensions Bill

House of Commons

Session 2007 - 08
Internet Publications
Other Bills before Parliament

Pensions Bill

Pensions Bill
Part 1 — Pension scheme membership for jobholders
Chapter 3 — Employment and pre-employment protection
26

54
Enforcement of the right
(1)
A worker may present a complaint to an employment tribunal that the worker
has been subjected to a detriment in contravention of section 53.
(2)
Subject to the following provisions of this section, the provisions of sections
48(2) to (4) and 49 of the Employment Rights Act 1996 (c. 18) (complaints to
5
employment tribunals and remedies), apply in relation to a complaint under
this section as they apply in relation to a complaint under section 48 of that Act,
but taking references in those provisions to the employer as references to the
employer within the meaning of section 53(1).
(3)
Where—
10
(a)
the detriment to which the worker is subjected is the termination of the
worker's contract, but
(b)
that contract is a worker’s contract and not a contract of employment,

any compensation awarded under section 49 of the Employment Rights Act
1996 by virtue of subsection (2) must not exceed the limit specified in
15
subsection (4).
(4)
The limit is the total of—
(a)
the sum which would be the basic award for unfair dismissal,
calculated in accordance with section 119 of the Employment Rights
Act 1996, if the worker had been an employee and the contract
20
terminated had been a contract of employment; and
(b)
the sum for the time being specified in section 124(1) of that Act which
is the limit for a compensatory award to a person calculated in
accordance with section 123 of that Act.
(5)
Where the worker has been working under arrangements which do not fall to
25
be regarded as a worker’s contract for the purposes of the Employment Rights
Act 1996, the worker is to be treated for the purposes of subsections (3) and (4)
as if any arrangements under which the worker has been working constituted
a worker’s contract falling within section 230(3)(b) of that Act.
(6)
In section 18(1) of the Employment Tribunals Act 1996 (proceedings where
30
conciliation is available), after paragraph (s) insert, “, or
(t)
under section 54 of the Pensions Act 2008.”
55
Right of employee not to be unfairly dismissed
(1)
The Employment Rights Act 1996 is amended as follows.
(2)
After section 104C (flexible working) insert—
35
“104D
Pension enrolment rights
(1)
An employee who is dismissed shall be regarded for the purposes of
this Part as unfairly dismissed if the reason (or, if more than one, the
principal reason) for the dismissal is that—
(a)
any action was taken, or was proposed to be taken, with a view
40
to enforcing in favour of the employee a requirement to which
this section applies;
(b)
the employer was prosecuted for an offence under section 40 of
the Pensions Act 2008 as a result of action taken for the purpose
of enforcing in favour of the employee a requirement to which
45
this section applies; or

Pensions Bill
Part 1 — Pension scheme membership for jobholders
Chapter 3 — Employment and pre-employment protection
27

(c)
any provision of Chapter 1 of that Part of that Act applies to the
employee, or will or might apply.
(2)
It is immaterial for the purposes of paragraph (a) or (b) of subsection (1)
above—
(a)
whether or not the requirement applies in favour of the
5
employee, or
(b)
whether or not the requirement has been contravened,

but, for that subsection to apply, the claim that the requirement applies
and, if applicable, the claim that it has been contravened must be made
in good faith.
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(3)
This section applies to any right conferred by, or by virtue of, any
provision of Chapter 1 of Part 1 of the Pensions Act 2008.”
(3)
In section 105 (redundancy as unfair dismissal), in subsection (1)(c) (which
refers to any of subsections (2A) to (7J) of that section applying) for “(7J)”
substitute “(7K)”.
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(4)
After subsection (7J) of that section insert—
“(7K)
This subsection applies if the reason (or, if more than one, the principal
reason) for which the employee was selected for dismissal was one of
those specified in subsection (1) of section 104D (read with subsection
(2) of that section).”
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(5)
In section 108 (exclusion of right: qualifying period of employment) in
subsection (3) (cases where no qualifying period is required) after paragraph
(gi) insert—
“(gj)
subsection (1) of section 104D (read with subsection (2) of that
section) applies,”.
25
(6)
In section 237(1A) of the Trade Union and Labour Relations (Consolidation)
Act 1992 (cases where employee may complain of unfair dismissal despite
participation in unofficial industrial action), in paragraph (a)—
(a)
for “, 103A or 104C” substitute “, 103A, 104C or 104D”;
(b)
for “protected disclosure and flexible working” substitute “protected
30
employment, flexible working and pension scheme membership”.
(7)
In section 238(2A)(a) of that Act (cases where employment tribunal to
determine whether dismissal of an employee is unfair despite limitation in
subsection (2) of that section)—
(a)
for “, 103 or 104C” substitute “, 103, 104C or 104D”;
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(b)
for “, employee representative and flexible working” substitute “,
employee representative, flexible working and pension scheme
membership”.
56
Restrictions on agreements to limit operation of this Part
(1)
Any provision in any agreement (whether a worker's contract or not) is void in
40
so far as it purports—
(a)
to exclude or limit the operation of any provision of this Part; or
(b)
to preclude a person from bringing proceedings under section 54 before
an employment tribunal.

Pensions Bill
Part 1 — Pension scheme membership for jobholders
Chapter 3 — Employment and pre-employment protection
28

(2)
The fact that an agreement is to any extent void under subsection (1) does not
entitle the employer to recover any property transferred, or the value of any
benefit conferred, as an inducement to enter into, or otherwise in connection
with, the agreement.
(3)
Subsection (1) above does not apply to any agreement to refrain from
5
instituting or continuing proceedings where a conciliation officer has taken
action under section 18 of the Employment Tribunals Act 1996 (conciliation).
(4)
Subsection (1) above does not apply to any agreement to refrain from
instituting or continuing before an employment tribunal any proceedings
within section 18(1)(t) of the Employment Tribunals Act 1996 (proceedings
10
under this Act where conciliation is available) if the conditions regulating
compromise agreements under this Act are satisfied in relation to the
agreement.
(5)
For the purposes of subsection (4) above the conditions regulating compromise
agreements under this Act are that—
15
(a)
the agreement must be in writing,
(b)
the agreement must relate to the particular proceedings,
(c)
the worker must have received advice from a relevant independent
adviser as to the terms and effect of the proposed agreement and, in
particular, its effect on his ability to pursue his rights before an
20
employment tribunal,
(d)
there must be in force, when the adviser gives the advice, a contract of
insurance, or an indemnity provided for members of a profession or a
professional body, covering the risk of a claim by the worker in respect
of loss arising in consequence of the advice,
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(e)
the agreement must identify the adviser, and
(f)
the agreement must state that the conditions regulating compromise
agreements under this Act are satisfied.
(6)
A person is a relevant independent adviser for the purposes of subsection (5)(c)
above if that person—
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(a)
is a qualified lawyer,
(b)
is an officer, official, employee or member of an independent trade
union who has been certified in writing by the trade union as
competent to give advice and as authorised to do so on behalf of the
trade union,
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(c)
works at an advice centre (whether as an employee or a volunteer) and
has been certified in writing by the centre as competent to give advice
and as authorised to do so on behalf of the centre, or
(d)
is a person of a description specified in an order made by the Secretary
of State.
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(7)
But a person is not a relevant independent adviser for the purposes of
subsection (5)(c) above in relation to the worker—
(a)
if the person is employed by, or is acting in the matter for, the employer
or an associated employer,
(b)
in the case of a person within subsection (6)(b) or (c) above, if the trade
45
union or advice centre is the employer or an associated employer,
(c)
in the case of a person within subsection (6)(c) above, if the worker
makes a payment for the advice received from the person, or

Pensions Bill
Part 1 — Pension scheme membership for jobholders
Chapter 4 — Power to establish a pension scheme
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(d)
in the case of a person of a description specified in an order under
subsection (6)(d) above, if any condition specified in the order in
relation to the giving of advice by persons of that description is not
satisfied.
(8)
In this section “qualified lawyer” means—
5
(a)
as respects England and Wales—
(i)
a barrister (whether in practice as such or employed to give
legal advice);
(ii)
a solicitor who holds a practising certificate; or
(iii)
a person other than a barrister or solicitor who is an authorised
10
advocate or authorised litigator (within the meaning of the
Courts and Legal Services Act 1990);
(b)
as respects Scotland—
(i)
an advocate (whether in practice as such or employed to give
legal advice); or
15
(ii)
a solicitor who holds a practising certificate.
(9)
For the purposes of this section any two employers are associated if—
(a)
one is a company of which the other (directly or indirectly) has control;
or
(b)
both are companies of which a third person (directly or indirectly) has
20
control;

and “associated employer” is to be read accordingly.
Employment Appeal Tribunal
57
Employment Appeal Tribunal
In section 21(1) of the Employment Tribunals Act 1996 (jurisdiction of appeal
25
tribunal) after paragraph (gc) insert—
“(gd)
the Pensions Act 2008,”.
Chapter 4
Power to establish a pension scheme
Pension scheme
30
58
Power to provide for a pension scheme
(1)
The Secretary of State may establish a pension scheme and make provision for
its administration and management.
(2)
A scheme established under this section is to be treated for all purposes as
established under an irrevocable trust.
35
(3)
It must be a scheme that is able to be registered under Chapter 2 of Part 4 of the
Finance Act 2004 (c. 12).
(4)
It must when registered under that Chapter be a scheme such that a jobholder’s
employer, if a participating employer, may comply with an enrolment duty by
arranging for the jobholder to become an active member of the scheme.
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Pensions Bill
Part 1 — Pension scheme membership for jobholders
Chapter 4 — Power to establish a pension scheme
30

(5)
It must be a scheme that complies with any provision of Northern Ireland
legislation corresponding to subsection (4).
(6)
The scheme administrator must ensure that the scheme is and remains
registered under Chapter 2 of Part 4 of the Finance Act 2004 (c. 12).
(7)
“Scheme administrator” has the same meaning here as in that Part.
5
(8)
The powers conferred by subsection (1) are exercisable by order.
(9)
If an order establishes a scheme, any further provision that may be made by
order in relation to the scheme may also be made by rules (and rules may be
made so as to come into force at the same time as the establishing order).
(10)
That is subject to subsections (11) and (12).
10
(11)
Rules are subject to any provision made by order.
(12)
No provision may be made by rules about—
(a)
the purpose or object of the scheme;
(b)
the appointment or removal of trustees;
(c)
(as regards trustees, or members of any corporate trustee) meetings,
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committees or delegation of functions;
(d)
any exclusion of liability on the part of trustees, or the provision of any
indemnity or insurance out of the funds of the scheme.
(13)
Except as expressly provided, nothing in this Act limits the generality of the
powers conferred by this section.
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59
Scheme orders: general
(1)
An order establishing a scheme must provide for the trustee corporation (the
body established by section 65) to be a trustee on the coming into force of the
scheme.
(2)
An order may provide for any provision of the Trustee Act 2000 (c. 29) to apply
25
as if an order or rules under section 58 were a trust instrument.
(3)
An order may provide for the trustees to have power to make rules under
section 58.
(4)
Where the trustees have power to make rules, an order may provide—
(a)
that they may not exercise the power in specified circumstances;
30
(b)
that they may exercise it subject to conditions;
(c)
that they must comply with requirements for consultation or
publication or other procedural requirements when exercising the
power.
(5)
An order may make provision for the exclusion of, or indemnity against,
35
liability of a trustee, or an officer or employee of a trustee, arising out of the
administration or management of a scheme.
60
Consultation of members and employers
(1)
If an order under section 58 establishes a scheme, the Secretary of State must
by order under that section require the trustees to make and maintain
40
arrangements for consulting the members of the scheme and participating
employers about the operation, development and amendment of the scheme.

Pensions Bill
Part 1 — Pension scheme membership for jobholders
Chapter 4 — Power to establish a pension scheme
31

(2)
The arrangements must include establishment and maintenance of—
(a)
a panel of persons to represent members (“the members’ panel”), and
(b)
a panel of persons to represent employers (“the employers’ panel”).
(3)
The composition and functions of the panels are to be determined by order
under section 58, or by the trustees under an order.
5
(4)
The functions of the members’ panel may include nominating individuals to be
members of the trustee corporation.
(5)
An order under section 58 may provide for payments to panel members out of
scheme funds, but only in respect of reasonable expenses.
61
Contribution limits
10
(1)
An order under section 58 must prescribe the maximum amount of
contributions that may be made by or in respect of a member in any tax year.
(2)
For the purposes of provision under subsection (1) an order may in particular
make provision as to—
(a)
what is a contribution;
15
(b)
when a contribution is to be treated as made;
(c)
how contributions are to be treated if the maximum is exceeded;
(d)
circumstances in which a payment is to be made to any person in
respect of an excess contribution;
(e)
who is to make any such payment and how it is to be calculated.
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(3)
An order may prescribe a maximum amount for payments that may be made
by a member and that are not contributions for the purposes of provision
under subsection (1).
(4)
In this section “tax year” has the same meaning as in Parts 1 to 6 of the Social
Security Contributions and Benefits Act 1992 (c. 4).
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(5)
The Secretary of State may by order repeal this section.
62
Procedure for scheme orders
(1)
Subsection (2) applies to any order under section 58 relating to a scheme,
except the order establishing the scheme and an order taking effect at the same
time as that order.
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(2)
The Secretary of State may not make the order without the consent of the
trustees.
(3)
But the trustees may not withhold their consent without giving reasons.
(4)
The trustees must consult the members’ panel and the employers’ panel before
deciding whether to give consent.
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63
Procedure for rules
(1)
A person who proposes to make rules under section 58 must publish a draft of
the rules and invite comments.
(2)
They must have regard to any comments made in accordance with the
invitation.
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Pensions Bill
Part 1 — Pension scheme membership for jobholders
Chapter 4 — Power to establish a pension scheme
32

(3)
If they make the rules they must publish an account in general terms of those
comments and their response to them.
(4)
If the rules they make differ from the draft published under subsection (1), they
must publish details of any differences that they think are significant.
(5)
Subsection (6) applies to any rules made by the Secretary of State under section
5
58 relating to a scheme, except rules taking effect at the same time as the order
establishing the scheme.
(6)
The Secretary of State may not make the rules without the consent of the
trustees.
(7)
But the trustees may not withhold their consent without giving reasons.
10
(8)
The trustees must consult the members’ panel and the employers’ panel—
(a)
before making rules under section 58;
(b)
before deciding whether to give consent under subsection (6).
(9)
If the Secretary of State or the trustees make rules under section 58 they must
publish them.
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(10)
Anything published under this section must be published in a way designed to
bring it to the attention of the persons likely to be interested or affected.
(11)
The publication must not be limited to electronic publication.
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Application of enactments
(1)
The Interpretation Act 1978 (c. 30) applies in relation to rules under section 58
20
as if they were contained in a deed not made under an enactment.
(2)
A scheme established under section 58 is not to be treated as a public service
pension scheme for the purposes of any enactment.
Trustee corporation
65
Trustee corporation
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(1)
There is to be a body corporate, referred to in this Chapter as the trustee
corporation.
(2)
The name of the body is to be determined by order made by the Secretary of
State.
(3)
The trustee corporation is not to be regarded as the servant or agent of the
30
Crown or as enjoying any status, immunity or privilege of the Crown.
(4)
Property held by the corporation is not to be regarded as property of, or
property held on behalf of, the Crown.
(5)
Schedule 1 makes provision about the trustee corporation.
66
Functions
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(1)
The functions of the trustee corporation are—
(a)
to act as a trustee of any scheme established under section 58, and