Right to remain silent.
| Author | Nickson, Sue |
| Position | Legal aspects of employee benefits package offerings - Brief Article |
More and more employers are offering tailored packages of benefits to staff but, warns Sue Nickson, too much information about choices could be as dangerous as too little
There is a growing tendency in the workplace to move away from traditional salary packages of set wages and annual leave to provide more flexible benefit packages that can be varied to suit the needs of individual employees. Private medical cover, dental expenses, maternity benefits, child-care costs and pension choices are just some of the more common benefits on offer. But do employers who provide their staff with a wide variety of benefits take on further obligations to assess which of these benefits are most suitable for individual employees?
There are some obvious risks. Could an employee claim that their employer has a duty to advise on the consequences of opting for each of the various benefits, and could failure to do so amount to a breach of the duty of care or a breach of the duty to upkeep mutual trust and confidence? Will employers need to become experts in specialist fields, such as healthcare insurance and pension provisions?
Fortunately, the law has not imposed such a burden upon employers. In the recent case of Outram v Academy Plastics (2000 IRLR 499), the Court of Appeal clarified the extent to which an employer has a duty to inform its employees of details of their contractual benefits.
The facts of the ease were that Mr Outram ceased to be a member of the company pension scheme when he resigned. He was re-employed just over a year later and could have rejoined the scheme. He did not make enquiries about this and was not advised of his right to do so. He resigned on grounds of ill-health within the year and died a few months later. If he had rejoined the scheme, the estate would have been entitled to a cash sum for the purchase of an annuity for his dependents.
The estate of the employee claimed that the employer, in its role as employer and trustee of the pension fund, had a duty of care to provide financial advice and to avoid causing the employee economic loss by failing to provide him with sufficient information. The claim failed because the court would not impose a duty of care in...
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