Clause 1

Part of Pensions Bill – in a Public Bill Committee at 10:45 am on 22nd January 2008.

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Photo of Mike O'Brien Mike O'Brien Minister of State (Pension Reform), Department for Work and Pensions 10:45 am, 22nd January 2008

I will deal with each of those points. As far as agency workers are concerned, where a person is employed is a matter of fact in law, and our view is that the primary obligation should lie with the agency. We want people to be automatically enrolled, and I think that the broad view in the Committee is that that is the right approach. Agencies often allocate staff to a number of employers over a short period of time. A catering agency, for example, might say “Go to this hotel one day, that restaurant the next day, and then another hotel.” We therefore need to ensure that the primary obligation remains with the agency.

Some agencies have an agreement with a particular employer to provide a number of staff over a prolonged period of time. For example, BMW has an engine plant in my constituency, and it gets staff through a particular agency, whom it then employs over considerable periods of time—years. The arrangement is that pensions can be paid by the direct employer, rather than by the agency, so provided that somebody is covering it, it is possible for the agency to pass the obligation down. We need to ensure that, provided that they comply with all the other rules, the person doing the work can get their pension, become automatically enrolled and have their opt-out, if they want it. Primarily, the position should be that they are in a pension scheme. The obligation will lie first of all with the agency. If there is an agreement, it can then be passed elsewhere, but the employee must be enrolled.

The point raised by the hon. Member for South-West Bedfordshire is interesting, and it is covered in case law. Lawson v. Sercoinvolved an employee of Cathay Pacific Airways, which is a company registered in Hong Kong. The claimant’s permanent home base was at Heathrow, and the question was whether or not he was based in the UK. The court’s answer was that he was, so it depends where the employee is based. Diplomats are based in their country of origin, so those who work here for a time, if this is their normal base for work purposes, are based here. If an American who works for an American company were to work in the UK for a period, and if this were their normal base for the job, then they would be subject to the legislation in the UK. Broadly, that is the way in which the legislation will work. The key issues are the claimant’s home base and the normal place that they work.