Clause 27

Pensions Bill – in a Public Bill Committee at 4:00 pm on 29th January 2008.

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Effect of Failure to Comply

Amendments made: No. 131, in clause 27, page 11, line 15, after ‘9’ insert ‘and [Workers without qualifying earnings]’.

No. 132, in clause 27, page 11, line 15, at end add—

‘( ) In relation to section [Workers without qualifying earnings] this Chapter applies as if references to a jobholder included references to a worker to whom that section applies.’.—[Mr. O'Brien.]

Question proposed, That the clause, as amended, stand part of the Bill.

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

Could the Minister kindly explain to the Committee why the explanatory notes say that

“no private right of action for breach of statutory duty” may arise against an employer? I am curious as to why that private right of action is deliberately struck out by clause 27, when on the face of it, it would seem a reasonable step for an aggrieved party to take.

Photo of Mike O'Brien Mike O'Brien Minister of State (Pension Reform), Department for Work and Pensions

The reason is that we want the Pensions Regulator to be able to take these steps. The clause makes clear that failure to comply with the employers’ duties in chapter 1 will not give rise to an individual right to pursue a case for breach of statutory duty. Otherwise individuals would have to take individual action in the courts. Our preference is that the Pensions Regulator will take on the role of enforcing employer compliance with the new duties, alongside its responsibility for regulating the new personal accounts scheme.

We want to ensure that the route to a remedy for an individual whose employer has been non-compliant is through enforcement by the Pensions Regulator rather than through that kind of individual action. That would ensure both more effective enforcement and, importantly, clarity for employers who might otherwise  fear that they could face action simultaneously on two fronts. Clause 27 clarifies that and also confirms that nothing in chapters 1 and 2 affects any other individual right to take legal action. Other individual rights to take legal action—concerning employment contracts for example—will remain and will be dealt with separately. The clause is therefore crucial in setting out who has the right to enforce employers’ duties. The answer is that the regulator has that right.

Clause 27, as amended, ordered to stand part of the Bill.