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A recent High Court ruling has approved the Pensions Regulator’s approach to employees working overseas, and may provide the industry with clarification on the grey area of auto enrolment.

Karena Woodall
Group Technical Manager
4 minutes

The definition of an overseas worker under auto enrolment legislation has been causing confusion amongst offshore and multi-national employers who are required to assess the eligibility of their workforce for auto-enrolment requirements.

The Pensions Act 2008 defines eligible workers as ordinarily working in the UK. However, the Pensions Regulator provides guidance indicating that employers should consider factors including:

  • Where the employee begins and ends their work
  • Where their private residence is or is intended to be
  • Where the employee’s headquarters are
  • Whether they pay national insurance contributions in the UK
  • What currency they are paid in

These factors are deemed particularly important in assessing eligibility for staff such as airline pilots, sea farers and sales personnel who may regularly move between countries, but who are primarily based in the UK.


In September 2014, Fleet Maritime Services Bermuda Ltd, a Guernsey-based company, sought a judicial review after the Regulator issued the company with a compliance notice setting out its auto-enrolment duties.

They argued that because many of their staff were contracted to work in international waters, they could not be deemed to ordinarily work in the UK. However, the Regulator proposed that the location where the employee was based should be the primary consideration for deciding whether they fall within the definition of jobholder.

The High Court decision indicated that the Regulator’s approach was pragmatic. Employers should prioritise their work base location over their contract, and an employee should be regarded as working in the UK during any period they are working from a base situated in the UK, even if the majority of the employee’s work is completed in non-UK waters.

Furthermore, an employee who is resident in the UK and is employed on a ship that started and ended their work in a UK port would be regarded as based in the UK and therefore deemed ordinarily working in the UK.

However, the judge also ruled that whilst the Regulator’s decisions were reasonable, the Court’s assessment should not be regarded as a question of law for the purpose of judicial review.


With regard to workers who regularly begin and end their work in non-UK ports, the court came down in favour of the plaintiff and quashed the Regulator’s compliance notice, allowing for further assessment of the workforce.

The Pensions Regulator is keen to ensure that the workers it deems to be covered by auto-enrolment legislation are indeed covered by it and that clarification and explanation on points of legislation are beneficial to all workers.

Once more and more practical examples are brought and more case stories developed, employers covering these types of workers will receive more clarification. However, it is also a reminder that the Court may not take the same approach as the Regulator.

- Karena Woodall, Wealth Management Consultant, August 2016

This article was first published on Reba Global

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