Pensions automatic enrolment

The Administrative Court has recently had to grapple with the issue of whether seafarers, who work on vessels which spend all or most of their time outside the UK, qualify for automatic enrolment into a UK-based pension scheme. In the process, the Court laid down a clear test for seafarers which may be persuasive in an Employment Tribunal claim by a seafarer seeking to establish employment rights in the UK.

The Pensions Regulator is responsible for enforcing the obligations of British employers to automatically enrol their eligible employees. The Regulator concluded that seafarers employed by a Bermuda-incorporated company were eligible for auto-enrolment in the UK, and in line with its powers, issued a compliance notice on the company for failing to auto-enrol them. The company then sought judicial review of this.

What the court said

The court decided that:

  • To establish whether a seafarer is considered to be ordinarily working in the UK, the test is: where is the seafarer based?
  • For a seafarer, their base is the point at which they begin and end their journey – where they depart and return from a voyage. So even though they may work abroad frequently, and for extended periods of time, they will still be based in the UK if they habitually depart from and return to ports in the UK.
  • Seafarers who travel or commute to a port outside the UK would not be regarded as based in the UK.  So a seafarer who lives in the UK but who works on a ship which spends most or all of its voyage time outside the UK and does not usually start its voyages from a port in the UK will not be regarded as ordinarily working in the UK.

What this decision means for marine employers

This decision is the first court guidance on what it means to be ordinarily working in the UK for the purposes of the pension auto-enrolment rules. To establish whether seafarers have a base in the UK, and qualify for automatic enrolment into a UK-based pension scheme, employers should give careful consideration to each employee on an individual basis. The key question is: do they live in the UK and do their voyages usually begin from and end at ports in the UK?

The 'base test' the court adopted is consistent with previous decisions regarding peripatetic workers in an employment context, and could be persuasive if looking at employment rights, in a claim by a seafarer seeking to establish employment rights in the UK.  Employers should look at their seafarer population to establish any risks of such rights being established, and seek advice on dealing with this risk appropriately.