Seasonal workers have as much right to a workplace pension as any others!

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I am surprised and disappointed in the National Farmers Union, lobbying to release farmers from paying auto-enrolment contributions to short-term “seasonal” workers.

We are in danger of opening the flood gates here to every part of the gig economy that employs staff on anything other than full time permanent contracts.

Seasonal (typically migrant) workers who currently enjoy the right (as non-entitled or eligible jobholders) not just to membership of a pension, but to an employer’s contribution, are typically rewarded by the minimum of wages, to suggest that they are undeserving of a pension contribution is not making them second class citizens so much as second class people.

Small pots matter

The arguments, as laid out in the FT today include an assertion from Matt Warman, MP for Boston and Skegness that seasonal workers would only accrue “very small pots”. I have heard this argument from those within pensions too and it needs to de knocked on the head.

  1. What is a small pot to Matt Warman, may be considered a big pot to a seasonal worker? A pound is a pound and in a world where small pots are protected by charging legislation, the argument that small pots don’t matter – holds no water.

 

  1. Small pots follow members a lot more easily than was the case. The orphaned pots of yesteryear will be digital pots of tomorrow, money from AE pots is more accessible under Freedoms and easier to access using digital money payment systems.

 

  1. There is no knowing whose small pot might not be the start of a bigger pot. While some migrants will emigrate and won’t have big pots ever, some migrants will stay and become our next generations of Mums and Dads, Grandfathers and mothers.

Short service matters

The CBI, who I normally agree with, are also making regressive noises, calling for the Government’s AE review to extend the waiting period before a worker gets a contribution. Employers have always liked subsidising valued permanent staff by insisting on complex eligibility requirements, extending “postponement” to (say) six months would suit bosses well but would substantially reduce coverage of workplace pensions.

For many people who job-hop, a workplace pension could become a tantalising but never-achieved expectation.

The CBI’s calls are in contrast to the general direction of travel with many smaller employers being cited by NOW pensions as wanting AE to extend to all workers with much of the hoop-lah around differing entitlements and postponement being swept away.

The reality is that the closer an employer is to staff, the more likely the employer is to feel a duty of care. The seasonal workers are never properly under the employ of farmers, typically being supplied through agencies, paid remotely and bussed in and out of work by gang-masters.

It is hardly surprising that the CBI and the NFU are unconcerned by the social consequences of excluding these people, they are three steps removed from direct interaction.

But it is disappointing that CBI are showing such inconstancy in their attitude to AE coverage

Auto-enrolment matters

AE is a game-changer, workplace pensions are – for most of us – a right not a privilege. Within 18 months that right will be fulfilled even to the smallest employers. It is regrettable that some employer groups and even their MPs are arguing again for carve outs.

The aim must be to make a pension contribution as much a part of DNA as NI and income tax. It will become a PAYE item and – I hope – an extension of the principle of voluntary NI for those who have opted out of PAYE (the self-employed).

To suggest that we cannot afford to make these payments (either as employer or employee) is to put at risk the advances of the past four years.

I do not hear these calls coming from payroll (who we were expecting to be swamped at this stage in the AE cycle), payroll has stepped up to the plate and delivered a first class operational platform to make AE compliant.

We are hearing the complaints of Farmers and their Union, and in the background the wider noise of larger employers looking to employ in the gig economy – ON THE CHEAP.

You do not have to be a genius to work out that a concession on seasonal workers will be seized upon as a loophole through which millions of lowly-valued workers will be disenfranchised from their AE rights.

Auto-enrolment matters and people matter. A life is a life no matter what economic value is placed upon it in some macro-economic debate!


This article is indebted to more excellent reporting from Jo Cumbo of the FT https://www.ft.com/content/debb8e12-e317-11e6-8405-9e5580d6e5fb

 

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About henry tapper

Founder of the Pension PlayPen, Director of First Actuarial, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in auto-enrolment, pensions and tagged , , , , , , . Bookmark the permalink.

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