Clause 45 - Fixed-term work
Employment
4:30 pm
Mr Philip Hammond (Runnymede and Weybridge, Conservative)
When we ended the morning sitting, I was dealing with amendment No. 215, having outlined our principled objection to the Government's gold-plating of a European Union directive, and having speculated on their possible purposes for doing that.
Amendment No. 215 has highlighted a serious practical concern beyond the objections that we have to the inclusion of pay and pensions within the scope of the clause. That serious practical concern particularly relates to pensions. Pensions are a long-term benefit, and it is questionable whether it is appropriate for a long-term benefit such as an occupational pension scheme to be available to someone who is working on a short-term fixed basis within a company. We recognise that issue, but we have chosen to address it in a different way by seeking to emphasise and underline the fact that the no-detriment rule must apply to the whole package, and should not be looked at as relating to any one part of it.
Our view is that it would almost always be inappropriate to offer occupational pension scheme membership to a fixed-term employee, partly for the reason outlined by the hon. Member for North Norfolk (Norman Lamb) that it would not be in that employee's interests to do so. He raises an interesting point because when we look at equivalence between permanent employees and fixed-term employees, are we looking at equivalence of the end benefit from the employee's point of view, or are we looking at equivalence of cost from the employer's point of view? In the case of an occupational pension scheme, incurring the same cost in respect of a fixed-term employee would not necessarily deliver the same benefit to that fixed-term employee as to his permanent counterpart, and there is a possibility of confusion.
The right way in which to look at this in terms of the no-detriment rule is that the fixed-term employee, by being excluded from a benefit such as membership of an occupational pension plan, should be no worse off than he would have been had he been included in that benefit. The hon. Member for North Norfolk has
shown how the benefit to the employee might be nil in many such cases. I hope that the essence of my concern is clear, and perhaps the Minister can address that specific point. The next group of amendments contains our substantive solution to the problem, which is to emphasise the Government's clear intention that all benefits, including pay and pensions, should be treated as a package when looking at the no-detriment principle.