My Ref: MRP 23/1 21st November 2018
Circular Num: NP/251/18
To: The Secretary All Shipping Branches & Regional Councils
Pension Entitlement for Maritime Agency Workers
It has been brought to the RMT’s attention that some of our members who are employed on agency contracts while working for shipping companies are not being auto enrolled into a workplace pension schemes as specified under UK legislation.
As a result the RMT requested legal advice in respect of how this union can ensure that our members are treated fairly and that agency employers honour their statutory obligations by offering or enrolling their employees into a workplace pension scheme.
Having received the legal advice the National Executive Committee on 15th November 2018 noted and adopted the following report:
“We note the legal advice on file and instruct the General Secretary to carryout the actions contained within the advice.
Further Shipping Branches and Regional Councils should bring this advice to the attention of members who are not being auto enrolled so that the RMT are able to take action where necessary in ensuring members have access to a occupational pension scheme in line with auto enrolment legislation.
Branches and Regional Councils to be advised.”
It is clear from the information we have received that there are agencies and shipping companies which are not meeting their statutory obligation when it comes to the ability of our members to begin saving for their retirement.
To assist Shipping Branches and our representatives when it comes to identifying members who are not being auto-enrolled please find below an outline of the legal advice we have received:
The UK statutory legislation in respect of auto-enrolment is contained in the Pensions Act 2008. The Act says that the auto-enrolment requirements also apply to workers who work on a ship or otherwise. However, to qualify any worker on a ship or otherwise must work or ordinarily work in Great Britain i.e. England, Scotland, Wales, including the surrounding 12 nautical miles of territorial waters.
Where a seafarer works could be a difficult factual question, but fortunately there is a previous High Court decision which deals with this issue for the purposes of the auto-enrolment legislation. The case concerned seafarers employed by a Bermuda company to work on Bermuda-registered ships owned by Carnival (trading under the names P&O Cruises and Cunard). They worked the majority of their time outside UK territorial waters. The court held that the decisive factor was where the seafarers were based, and the base is decided by the place whether their tour of duty:
A seafarer should be treated as ordinarily working in Great Britain during any period when the seafarer is working from a base situated in Great Britain even if the ship on which the seafarer works spends most of its time outside Great Britain so that the majority of the seafarer’s work is performed outside Great Britain.
A seafarer who lives in Great Britain and whose tours of duty habitually begin and end at a port in Great Britain should be treated as based in Great Britain and therefore as a worker who ordinarily works in Great Britain.
A seafarer who lives in Great Britain but who works on a ship which spends all or most of its time outside Great Britain and whose tours of duty do not habitually begin and end in Great Britain should not be regarded as based in Great Britain or as a worker who ordinarily works in Great Britain.
What is earnings threshold?
The fact that a members pay could be made up of basic pay and allowances does not matter when it comes to auto-enrolment.
The thresholds for auto- enrolment apply to all earnings which are defined as salary, wages, commission, bonuses, duty rate and overtime. If an employee earns the equivalent of £192 or more per week they must be auto-enrolled. If they earn less than £192 but more than £116 per week the member has the right to join the employers pension scheme i.e. opt-in, and the employer would also have to contribute.
Whose obligation is it to auto-enrol?
If the member is employed by an agency then it is the agency who is obligated to auto-enrol. If the individual spends most of their time working for another employer this will not detract from the fact that they are employed by an agency. Therefore the obligation falls on the agency.
Enforcement lies in the hands of the Pensions Regulator. However, we are advised that the relevant employer should be first approached. If the employer will not auto-enrol the member(s) then the Pensions Regulator should be contacted.
I would request that you would bring the contents of this advice to the attention of representatives and members. If you require any assistance you should contact the RMT Pensions Officer Paul Norris on 020 7529 8806 or at firstname.lastname@example.org.
I will keep you advised of developments.