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Cruising into stormy seas for pensions

The Pensions Regulator has won an ongoing legal battle relating to the rights of peripatetic workers who travel from place to place as part of the nature of their work. This confirms that such workers can fall under the automatic enrolment pension regime.

Automatic enrolment requires that any employees who ordinarily work in Great Britain and meet other requirements relating to age and level of earnings, must be automatically enrolled into a qualifying pension scheme to which their employer pays a minimum level of contributions.

The Pensions Regulator has been successful in a landmark case on auto-enrolment for travelling workers, including seafarers and pilots.

The Pensions Regulator challenged Fleet Maritime Services (Bermuda) Limited who had not automatically enrolled any of their workers on the basis that they did not ordinarily work in Great Britain.  The company employs seafarers who work on cruise ships for a variety of cruise operators and does not have a place of business in the UK but is a wholly owned subsidiary of an English company.

The High Court found that the test for establishing whether a worker was working or ordinarily works in Great Britain is dependent on where the employee is considered to be based, i.e. where they habitually start and end their tour of duty so:

  • A worker, who lives in Great Britain and generally boards and leaves a vessel at a base in Great Britain, although spending the rest of the trip in non-UK waters will be considered to be ordinarily working in Great Britain and their employer will require to comply with their auto-enrolment obligations in respect of this worker.
  • A worker, who lives in Great Britain and generally boards and leaves a vessel at a base not located within Great Britain, will not be considered to be ordinarily working in Great Britain and their employer will not require to comply with their auto-enrolment obligations in respect of this worker.

Employers employing peripatetic workers in any capacity where such workers may previously have not been considered to be working in Great Britain may require to assess their approach in light of this decision.

If an employer is found to not be complying with their automatic enrolment duties in respect of any employees the Pensions Regulator can order compliance and can issue escalating daily penalties until compliance is achieved.

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

Tim Green

Partner - Head of Pensions

I am a Partner in the Pensions team with a broad advisory, transactional and dispute resolution practice.