Sheffield Hallam drops plan to employ staff via subsidiary firm

Sheffield Hallam University has abandoned plans to transfer staff on to a subsidiary firm to save on pension costs ahead of expected falls in employer contribution rates next year.

The university was criticised for proposing to move all academics – apart from those eligible for the Research Excellence Framework (REF) – into a new company, rather than employing them directly.

Seen as a way of reducing the number of academics enrolled in the expensive Teachers’ Pension Scheme, many feared the move would create a “two-tier” workforce.

With further strikes planned at the university from 15 June, Sheffield Hallam announced it had agreed to an “immediate withdrawal of the proposal”.

This was because “we expect a significant reduction in the Teachers’ Pension Scheme (TPS) employer contribution rate from April 2027”. It is anticipated that employer contribution rates will come down by as much as 10 per cent.

Post-92 universities, which have to offer TPS to direct employees by law, have long argued that employer contributions are too high at a time of financial difficulties.

Moving staff on to subsidiary firms and offering them a bespoke pension scheme with lower rates has been seen as one way to reduce costs but unions have fiercely resisted such moves.

Sheffield Hallam’s University and College Union (UCU) branch has held 13 days of industrial action in opposition to the plans. It welcomed the “significant victory” and called off all remaining strikes.

A spokesperson for UCU Hallam said the subsidiary firm “posed real risks, not only to jobs, terms and conditions, and pensions, but also to the long-term integrity of the institution”. 

“We are pleased that the university has listened to the strength of feeling from staff and stepped back from these proposals. Retaining academic staff within Sheffield Hallam University ensures stability for both staff and students.

“This outcome reflects the collective action, solidarity, and engagement of our members. It shows what can be achieved when staff come together to defend fair working conditions and high-quality higher education.”

Sheffield Hallam UCU said it is now focused on supporting academic staff at risk of redundancy, “and ensuring that Sheffield Hallam University management does everything possible to avoid compulsory redundancies”. 

“We will continue to work constructively, to protect jobs, minimise harm to staff and students, and ensure that all available alternatives to compulsory redundancies are fully explored.”

The Sheffield Hallam spokesperson said the agreement it had reached with the union also included an increase in voluntary redundancy (VR) payments.

“We hope this enhanced offer will result in a sufficient uptake of VR to meet the required savings without the need for compulsory redundancies,” they added.

juliette.rowsell@timeshighereducation.com