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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 46208
Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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there. A number of employees in the company that I work

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Hi there.
A number of employees in the company that I work for are members of a final salary pension scheme, including myself. The company are planning to withdraw from this scheme. We will all lose significant benefits on retirement as a result of this. What the company have offered members of this scheme by way of compensation is totally unacceptable, and it has been rejected by unions, and by those members who are not union members. We have now been told that unless we can reach an agreement with the company within the next 30 days, we will be dismissed, and then offered a different contract. Can the company dismiss us because they want to withdraw from the scheme, and without offering adequate compensation ?
Submitted: 2 years ago.
Category: Employment Law
Expert:  Ben Jones replied 2 years ago.
Ben Jones : Hello, my name is ***** ***** it is my pleasure to assist you with your question today. Why does the company want to withdraw from this scheme?
JACUSTOMER-ybc8r2nj- :

Ben,

JACUSTOMER-ybc8r2nj- :

The company originally operated the NILGOSC final salary pension scheme for all employees, but around 1995 it closed membership to the scheme, and all new recruits after that were given a different pension scheme where the employee and employer both contribute 6% of salary. Over the past few years, the employers contribution to the NILGOSC scheme has risen significantly ( I think it's currently around 28%), and the reason for withdrawal from the scheme is to reduce the costs associated with it. Members will lose a significant amount of benefit on retirement, and as yet the company has only made a very small offer of compensation, which everyone has rejected. It would appear that the company feel that getting any agreement that suits them is unlikely, and this is now their way of forcing the change through. At this stage, I would like to know if it is legal to dismiss employees, and then offer them another contract that leaves them significantly worse off in retirement.

Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 46208
Experience: Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
Ben Jones and other Employment Law Specialists are ready to help you
Customer: replied 2 years ago.

The company originally operated the NILGOSC final salary pension scheme for all employees, but around 1995 it closed membership to the scheme, and all new recruits after that were given a different pension scheme where the employee and employer both contribute 6% of salary. Over the past few years, the employers contribution to the NILGOSC scheme has risen significantly ( I think it's currently around 28%), and the reason for withdrawal from the scheme is to reduce the costs associated with it. Members will lose a significant amount of benefit on retirement, and as yet the company has only made a very small offer of compensation, which everyone has rejected. It would appear that the company feel that getting any agreement that suits them is unlikely, and this is now their way of forcing the change through. At this stage, I would like to know if it is legal to dismiss employees, and then offer them another contract that leaves them significantly worse off in retirement.

Expert:  Ben Jones replied 2 years ago.
Hello, it would appear that the employer is now trying to change your existing terms and conditions. There are a few ways in which an employer may try and make changes to an employee’s contract of employment. These are by:
• Receiving the employee’s express consent to the changes.
• Forcefully introducing the changes (called 'unilateral change of contract').
• Giving the employee notice to terminate their current contract and then offer them immediate re-engagement under a new contract that contains the new terms.
If the changes are introduced without the employee's consent, then the following options are available:
1. Start working on the new terms but making it clear in writing that you are working ‘under protest’. This means that you do not agree with the changes but feel forced to do so. In the meantime you should try and resolve the issue either by informal discussions or by raising a formal grievance.
2. If the changes fundamentally impact the contract, for example changes to pay, duties, place of work, etc., you may wish to consider resigning and claiming constructive dismissal. The resignation must be done without unreasonable delay so as not to give the impression that the changes had been accepted. The claim must be submitted in an employment tribunal within 3 months of resigning and is subject to you having at least 2 years' continuous service. You would then seek compensation for loss of earnings resulting from the employer's actions.
3. If the employment is terminated and the employer offers re-engagement on the new terms that could potentially amount to unfair dismissal. However, the employer can try and justify the dismissal and the changes if they had a sound business reason for doing so. This could be pressing business needs requiring drastic changes for the company to survive. If no such reason exists, you can make a claim for unfair dismissal in an employment tribunal. The same time limit of 3 months to claim and the requirement to have 2 years' continuous would apply.
Finally, it is also worth mentioning that sometimes employment contracts may try to give the employer a general right to make changes to an employee’s contract. As such clauses give the employer the unreserved to change any term, so as to evade the general rule that changes must be mutually agreed, courts will rarely enforce such clauses. Nothing but the clearest language will be sufficient to create such a right and the situation must warrant it. Any attempt to rely on such clauses will still be subject to the requirement of the employer to act reasonably and can be challenged as above.

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