We should all be a little happier today with the news that the Pension Regulator has won its case against Fleet Maritime Services, meaning that many thousands of employees on overseas contracts will be treated as UK based and thus eligible for auto-enrolment.
The Pensions Regulator has won a landmark legal victory against an employer who argued it was not obliged to meet a new pension duty for staff because they worked on cruise ships.
Fleet Maritime Services, a Bermuda-based employer, had argued that many of its UK staff were not covered by automatic enrolment as they worked in international waters and could not be said to “ordinarily work in the UK”. However, the High Court on Tuesday said it agreed with the regulator’s position that the workers were covered by automatic enrolment.
Thanks as usual to Jo Cumbo of the FT for tipping me off on this! Well done Lesley Titcombe and hurrah for our best naval victory since Trafalgar!
For those in peril..
You might think it random for me to be banging on about Seafarers but bear with me. In my pre-financial services days I spent some time in Iceland as a trawler man. While latterly my seafaring exploits have been confined to the decks of Caribbean Cruise Liners, I’ve got a weather eye for those in peril on the sea.
If you want to read about how this all started , flip back to my blogs a few years ago.
The plight of the offshore contractor.
But I’m even more pleased for the thousands of British workers who are working in the UK on low wages who are missing out on auto-enrolment contributions because they have signed offshore contracts. These can range from cleaning jobs to supply teaching, what all the “offshore workers” have in common is that because their employment contributions originate from places like Sark in the Channel Islands, the employer doesn’t have to enrol them till April 2017. The BBC exposed some shady practices and I wrote about the pension issues back in 2012. Indeed I called it a pension scandal in the making
So one teacher on an onshore contract’s been enrolled for three years and another still has a year to wait! No one explains these things to you when you are given your contract.
I remember visiting the London offices of one offshore manning agency and listening to the sound of piped seagulls, apparently many of the contractors calling in , assumed that the office was indeed in Sark!
Had tPR not won this ruling, many people would have missed out on auto-enrolment and we could have seen a surge in offshoring contracts meaning that people currently enrolled could have found themselves disenfranchised.
Jo broke the story at the bottom of an article in the FT on NEST. Not a lot of people know this, but NEST can’t be of much help to workers with offshore contracts as they are required to turn away any employer which pays its staff using an offshore bank account. Not surprisingly, the offshore payment companies such as Fleet Maritime Services, keep their bank accounts offshore, not to do so would prejudice their priviledged tax status (vat mostly).
So weirdly, the Seafarers and the contract workers who are on offshore contracts- some of the most disadvantaged workers in the UK, are ineligible for NEST – a perverse twist to the “public service obligation”.
I hope you enjoyed this magical mystery tour into the weirder edges of auto-enrolment. I hope the people who will, as a result of this victory for tPR, be getting a Workie, will be told and I hope that the nasty business of offshoring people’s contracts to save a few quid in UK taxation, will suffer further setbacks.