Fleet Maritime Services (Bermuda) Ltd, R (on the application of) v The Pensions Regulator (Rev 1)

The court considered whether seafarers employed by the claimant fall within the territorial scope of the Pensions Act 2008 for the purposes of automatic enrolment, focusing on the meaning of section 1(1)(a) (a worker "who is working or ordinarily works in Great Britain under the worker's contract"). The judge held that the appropriate test for peripatetic workers is the "base" test endorsed in Lawson v Serco: whether the contract is being operated so that the worker is based in Great Britain, assessed by where tours of duty begin and end rather than solely by where the original contract contemplated the worker would work. The court nevertheless held that a ship cannot be treated as the worker's base; work on board is in Great Britain only when the ship is within Great Britain. Applying those principles, the Regulator was correct to treat as within the Act seafarers who habitually begin and end their tours at a UK port, but was wrong to treat as within the Act seafarers whose tours begin and end outside the UK even if their contracts treat travel days as paid working days. The Regulator's decision was therefore quashed in part.

This is a judicial review by Fleet Maritime Services (Bermuda) Ltd challenging a compliance notice of the Pensions Regulator that certain seafarers fall within the automatic enrolment obligations of the Pensions Act 2008. The principal legal issue was the territorial scope of section 1(1)(a) of the 2008 Act: when is a worker "working or ordinarily works in Great Britain under the worker's contract"?

Background and facts:

• The Employer is a Bermuda company employing seafarers on cruise ships (mostly Bermuda-registered) owned by a British parent. Seafarers live on board during tours of duty (typically c.12 weeks, up to six months) and take leave ashore. Some seafarers live in the UK; some do not. The Employer has no UK place of business and uses a Guernsey payroll company.
• The Regulator issued a compliance notice asserting that (i) workers who live in the UK and habitually join and leave a vessel at a UK port ordinarily work in the UK, (ii) workers who live in the UK but begin and end tours outside the UK under permanent contracts might still be based in the UK because of travel and related arrangements, and (iii) workers on fixed-term contracts who begin and end tours outside the UK are not ordinarily working in the UK.

Procedural posture: Permission to seek judicial review was initially refused on paper but granted on oral hearing by Mr Justice Mitting because the claimant sought clarity on the law in circumstances where non-compliance could attract criminal liability. The present hearing was before Mr Justice Leggatt.

Issues framed by the court:

1. How should the phrase in section 1(1)(a) be interpreted for peripatetic workers such as seafarers — by reference to where working time is spent, the terms of the contract as made, or the place from which the worker is based in practice?
2. Whether a ship can be regarded as a seafarer’s base for the purpose of deciding whether the worker "ordinarily works" in Great Britain.
3. Whether the Regulator’s three categorical rules correctly state when seafarers fall within section 1(1)(a).

Court’s reasoning and conclusions:

• The court started from the statutory language but relied on the relevant jurisprudence on territorial scope (Wilson v Maynard Shipbuilding Consultants; Todd v British Midland Airways; Lawson v Serco; Diggins; Ravat). The judge accepted that the relevant approach for peripatetic workers is the "base" test endorsed in Lawson, read so as to focus on how the contract is actually being operated rather than solely on the original contractual terms.
• The phrase "is working or ordinarily works" must be read sensibly: "is working" does not capture short, temporary visits to Great Britain; rather it requires working with a base in Great Britain. The purpose of including both phrases is to cover workers who sometimes work abroad but remain based in Great Britain.
• A ship cannot be treated as the worker's base; work aboard a ship counts as work in Great Britain only when the ship is in Great Britain. Therefore, to say a seafarer is "based" in Great Britain requires identifiable regularity in commencing and ending tours at UK ports (or comparable indicia), not merely that travel days are paid or that the contract treats travel as work.
• Applying those principles, the Regulator's first rule (UK-resident workers who habitually join and leave the vessel at a UK port) is a correct statement of the law, subject to fact-specific assessment of habitual patterns. The Regulator's second rule (workers who begin and end tours outside the UK but whose contracts treat travel days as paid) was incorrect: travel days are commuting and do not of themselves make the worker based in the UK. The third rule (fixed-term contracts beginning and ending outside the UK) was not challenged.

Remedy and costs: The Regulator’s decision was quashed in part. The court made no order as to costs because it considered the result too close to call.

The claimant's judicial review was allowed in part. The court held that the appropriate test for peripatetic workers under section 1(1)(a) of the Pensions Act 2008 is the "base" test endorsed in Lawson v Serco, applied by reference to how the contract is actually operated rather than solely by the original contractual terms; a ship cannot be treated as the worker's base; seafarers habitually commencing and ending tours at a UK port may be within the Act, but seafarers whose tours begin and end outside the UK cannot be treated as ordinarily working in Great Britain merely because travel days are paid under their contracts. The Regulator's decision was therefore quashed in part.

Permission to seek judicial review was initially refused on paper but granted after an oral hearing by Mr Justice Mitting; no further appellate history is stated in the judgment.