Uber face legal action over Sharia non-compliant pensions
20 April 2022
Last year, a survey conducted by the website Islamic Finance Guru found that 30% of Muslims surveyed did not have a pension, with most of them citing lack of Sharia compliance as the reason. Now, we are seeing Uber facing legal action from trade union ADCU for not providing a Sharia compliant pension to its workforce, who are estimated to be majority Muslim.
This follows Uber using Now Pensions as its provider after the courts ruled that its drivers were workers, and as such are required to automatically enrol them. The ADCU is requesting that Uber make corrective arrangements within 14 days.
Pension providers are not required to offer Sharia compliant funds for savers to invest in, however companies are required to act according to the Equality Act 2010. Not doing so can be discriminatory and prompt legal action.
Sharia compliant funds are restricted from investments in certain sectors, such as gambling, tobacco, weaponry and some finance activity. Not providing a pension scheme that offers such a fund could result in the Muslim workforce opting out or investing in a fund that contradicts the tenets of their faith.
Concerns into the compliance of the Local Government Pension Scheme (LGPS) have also been raised, but there are currently no claims being brought against the scheme. In the case of the LGPS, offering an alternative introduces more complexity. The second scheme must be offered to all employees, not just those of Muslim faith, or risk further discrimination allegations.
The CIPP encourages employers to consider if their processes remain compliant, not just with automatic enrolment, but also with the Equality Act 2010 and conduct additional research where necessary.
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