From 2012, under new government rules, employees will find themselves enrolled in workplace pension schemes automatically at the end of three months of employment. For “permies,” this may sound like good news, but could it have a less intentional consequence?
Workers will be automatically enrolled into workplace pension schemes after three months but can choose to opt-in within this period, whereupon their employer will be required to make employer contributions. All eligible job holders, including permanent appointees and temporary agency workers, are to be included within the three-month waiting period, which also coincides with the twelve-week period laid out under the forthcoming Agency Workers Regulations.
A partner with the law firm Osborne Clarke, Kevin Barrow, thinks that the new measure may well result in many firms opting for temporary workers rather than hiring permanent staff – a development which could well be of benefit to the UK’s flexible contractor workforce. Mr Barrow, who is a recruitment sector specialist, suspects that many British companies will prefer to hire on the basis of time-limited contract jobs using “overarching contracts” when the new pension measures come into effect. Employing workers under such contracts, Barrow explained, will allow a “once and forever” enrolment rather than several new enrolments at the commencement of each new assignment – an arrangement which would favour agency contractors.
It’s a rather convoluted legal matter; but if Mr Clarke is right in his estimations, Britain’s contractors could be the chief beneficiaries of this particular government initiative.
