The automatic enrolment requirements have been gradually phased-in since October 2012, for the first time requiring employers to automatically enrol certain workers into, and contribute to, pension arrangements. However, the requirements are complicated giving rise to many questions, such as exactly to which workers do they apply?
The High Court recently delivered an important decision1 relating to certain types of seafarers and whether or not they were ‘workers’ for the purposes of the auto-enrolment legislation, given that their work involved them regularly being outside Great Britain. The query arose because the definition of ‘worker’ for this purpose is someone who ‘ordinarily works in Great Britain under [the worker’s contract]’ – so what does ‘ordinarily works in Great Britain’ mean? The Court analysed various cases which looked at similar wording in the context of employment legislation and reached the conclusion that:
- a seafarer could be regarded as ordinarily working in Great Britain during any period when he or she is working from a base in Great Britain, even if the ship spends most of its time outside Great Britain so that most of the seafarer’s work is performed outside Great Britain;
- a seafarer who lives in Great Britain and who works on a ship which, although it spends most of its time outside Great Britain habitually begins its voyage from and returns to Great Britain may be regarded as being based in Great Britain or as a worker who ordinarily works in Great Britain under the worker’s contract;
- in contrast, a seafarer who lives in Great Britain but who works on a ship which spends most or all of its time outside Great Britain and whose tours of duty do not habitually begin and end in Great Britain cannot be regarded as being based in Great Britain or as a worker who ordinarily works in Great Britain under the worker’s contract.
Although the judgment involved a specific type of worker (seafarers), it is useful in evidencing the criteria the courts will apply in assessing whether or not the ‘ordinarily working in Great Britain’ test has been satisfied where the workers in question travel into and out of Great Britain as part of their work. Employers should take note of this decision and the relevant tests to be applied to determine whether or not any such workers within their own workforce need to be auto-enrolled.