Pensions insight
Seasonal workers
Henry Tapper, founder of Pension PlayPen, asserts that they should have the same pension rights as any others
I am surprised and disappointed in the National Farmers Union (NFU) lobbying to release farmers from paying automatic enrolment contributions to short-term ‘seasonal’ workers. We are in danger of opening the flood gates here to every part of the gig economy that employs staff on anything other than full-time permanent contracts. Seasonal (typically migrant) workers who currently enjoy the right (as non-entitled or eligible jobholders) not just to membership of a pension but to an employer’s contribution, are typically rewarded by the minimum of wages; to suggest that they are undeserving of a pension contribution is not making them second class citizens so much as second class people. The arguments, as laid out in the Financial Times on 30 January 2017, include an assertion from Matt Warman, member of parliament (MP) for Boston and Skegness, that seasonal workers would only accrue “very small pots”. I have heard this argument from those within pensions too, and it needs to be knocked on the head. What counts as a small pot to Matt Warman, may be considered a big pot to a seasonal worker. A pound is a pound, and in a world where small pots are protected by charging legislation, the argument that small pots don’t matter holds no water. Small pots follow members a lot more easily than was the case. The orphaned pots of yesteryear will be digital pots of tomorrow. Money from automatic enrolment pots is more accessible under pension freedoms and easier to access using digital money payment systems. There is no knowing whose small pot might not be the start of a bigger pot. While some migrants will emigrate and won’t have big pots ever, some migrants will stay and
become our next generations of mums and dads, grandfathers and mothers. The Confederation of British Industry (CBI), with which I normally agree, are also making regressive noises, calling for the Government’s automatic enrolment review to extend the waiting period before a worker gets a contribution. Employers have always liked subsidising valued permanent staff by insisting on complex eligibility requirements, so extending ‘postponement’ to, say, six months would suit bosses well – but would substantially reduce coverage of workplace pensions. For many people who job-hop, a workplace pension could become a tantalising but never-achieved expectation. The CBI’s calls are in contrast to the general direction of travel with many smaller employers being cited by NOW: Pensions as wanting automatic enrolment to extend to all workers with much of the hooplah around differing entitlements and postponement being swept away. The reality is that the closer an employer is to staff, the more likely the employer is to feel a duty of care. The seasonal workers are never properly under the employ of farmers, typically being supplied through agencies, paid remotely and bussed in and out of work by gang-masters. It is hardly surprising that the CBI and the NFU are unconcerned by the social delivered a first class operational platform ...payroll has stepped up to the plate and
consequences of excluding these people – they are three steps removed from direct interaction. But it is disappointing that the CBI are showing such inconstancy in their attitude to automatic enrolment coverage. Automatic enrolment is a game-changer. Workplace pensions are, for most of us, a right not a privilege. Within eighteen months that right will be fulfilled even to the smallest employers. It is regrettable that some employer groups and even MPs are arguing again for carve-outs. The aim must be to make a pension contribution as much a part of DNA as National Insurance (NI) and income tax. It will become a pay-as-you-earn (PAYE) item and, I hope, an extension of the principle of voluntary NI for those who have opted out of PAYE (the self-employed). To suggest that we cannot afford to make these payments (either as employer or employee) is to put at risk the advances of the past four years. I do not hear these calls coming from payroll, who we were expecting to be swamped at this stage in the automatic enrolment cycle. Instead, payroll has stepped up to the plate and delivered a first class operational platform. We are hearing the complaints of farmers and their union, and in the background the wider noise of larger employers looking to employ in the gig economy – on the cheap. You do not have to be a genius to work out that a concession on seasonal workers will be seized upon as a loophole through which millions of lowly-valued workers will be disenfranchised from their automatic enrolment rights. Automatic enrolment matters and people matter. A life is a life no matter what economic value is placed upon it in some macro-economic debate. n
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Issue 28 | March 2017
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