Automatic enrolment and implied contracts

27 November 2015

Following a number of queries on implied contracts, The Pensions Regulator has confirmed their position on the subject and updated guidance accordingly.

Details have been added to TPR’s Frequently Asked Questions section, within the Director question as follows:

Question

A contract of employment does not have to be a written document. In what circumstances would the regulator consider that an implied contract of employment exists and the company should have carried out automatic enrolment duties for the director?

Answer

The regulator has set out its approach to the enforcement of automatic enrolment duties on our website.

Our overall compliance approach is focused on educating and enabling employers to comply with the law. In the event that:

• we were investigating a director-only company for a failure to carry out any of their automatic enrolment duties, and
• there is no written contract of employment or other evidence of an intention to create an employer/worker relationship, between the company and a director or directors,

we will not as part of our approach seek to argue that an implied contract of employment exists.