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UK pensions regulator wins court case on peripatetic workers

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The UK High Court has ruled in favour of The Pensions Regulator (TPR) in the first judicial review of the latter’s approach in relation to automatic enrolment.

The case concerned the position the TPR took in relation to peripatetic workers, such as seafarers and airline pilots.

It was brought by Fleet Maritime Services (Bermuda) (FMSB), a company that employs seafarers who work on ships owned by Carnival, such as P&O Cruises and Cunard.

In July 2014, TPR effectively ordered FMSB to auto-enrol qualifying employees, setting out its approach and guidance in a compliance notice to the company.

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FMSB challenged this with TPR, but, in September 2014, the regulator affirmed its decision, prompting the employer to seek a judicial review of the decision.

FMSB argued that many of its UK staff were not covered by the Pensions Act 2008, as they worked in international waters and could not be said to “ordinarily work in the UK”.

TPR argued that the location of the workers’ base was the primary consideration and not their contracts.

Shortly before Christmas, the UK High Court ruled that the regulator’s approach on peripatetic workers was correct and concluded that the “base test” and not the “contract test” was the most appropriate test to apply when establishing where such a worker “ordinarily works”.

TPR chief executive Lesley Titcomb welcomed the judgment, also noting that the judge made clear that “decisions of the regulator based on the assessment of particular facts are not ordinarily suitable for judicial review”.

The High Court ruled in favour of the company in relation to those workers who regularly begin and end tours of duty in non-UK ports.

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