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Pension contributions are not “wages”
In Somerset County Council v Chambers, the EAT has held that pension contributions paid by the employer do not count as wages within the definition of section 27(1)(a) of the Employment Rights Act. This is not withstanding the fact that the definition is stated as being “any sums payable to the worker in connection with his employment”. The reason for this is that the contributions are paid to the pension provider on the employee’s behalf and not directly to the employee.
This legal update is provided for general information purposes only and should not be applied to specific circumstances without prior consultation with us.
For further details on any of the issues covered in this update please contact Gemma Ospedale, Partner in Employment on 020 7583 2222.
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