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PART 1PENSION SCHEME MEMBERSHIP FOR JOBHOLDERS

CHAPTER 7APPLICATION AND INTERPRETATION

Workers

“Employer”, “worker” and related expressions

70.—(1) This section applies for the purposes of this Part.

(2) “Contract of employment” means a contract of service or apprenticeship whether express or implied, and (if it is express) whether oral or in writing.

(3) “Worker” means an individual who has entered into or works under—

(a)a contract of employment, or

(b)any other contract by which the individual undertakes to do work or perform services personally for another party to the contract.

(4) But a contract is not within subsection (3)(b) if the status of the other party is by virtue of the contract that of a client or customer of a profession or business undertaking carried on by the individual concerned.

(5) For the purposes of subsection (3)(b), it does not matter whether the contract is express or implied or (if it is express) whether it is oral or in writing.

(6) Any reference to a worker’s contract is to be read in accordance with subsections (3) to (5).

(7) “Employer”, in relation to a worker, means the person by whom the worker is employed (subject to sections 37(5) and 38(6)).

(8) “Employment” in relation to a worker, means employment under the worker’s contract.

Agency workers

71.—(1) This section applies to an individual (“the agency worker”)—

(a)who is supplied by a person (“the agent”) to do work for another person (“the principal”) under a contract or other arrangements made between the agent and the principal,

(b)who is not, as respects that work, a worker, because of the absence of a worker’s contract between the individual and the agent or the principal, and

(c)who is not a party to a contract under which the agency worker undertakes to do the work for another party to the contract whose status is, by virtue of the contract, that of a client or customer of a profession or business undertaking carried on by the individual.

(2) Where this section applies, the other provisions of this Part have effect—

(a)as if there were a worker’s contract for the doing of the work by the agency worker, made between the agency worker and the relevant person under subsection (3), and

(b)as if that person were the agency worker’s employer.

(3) The relevant person is—

(a)whichever of the agent and the principal is responsible for paying the agency worker in respect of the work, or

(b)if neither the agent nor the principal is responsible for doing so, whichever of them pays the agency worker in respect of the work.

Directors

72.—(1) A person who holds office as a director of a company is not, by virtue of that office or of any employment by the company, a worker for the purposes of this Part, unless—

(a)the person is employed by the company under a contract of employment, and

(b)there is at least one other person who is employed by the company under a contract of employment.

(2) In this section, “company” includes any body corporate.

Crown employment

73.—(1) This Part has effect in relation to employment by or under the Crown as it has effect in relation to other employment.

(2) For the purposes of the application of the provisions of this Part in accordance with subsection (1)—

(a)references to a worker are to be construed as references to a person employed by or under the Crown;

(b)references to a worker’s contract are to be construed as references to the terms of employment of a person employed by or under the Crown.

(3) This section does not impose criminal liability on the Crown.

(4) But on the application of the Regulator the High Court may declare unlawful a failure by the Crown to comply with any of the duties mentioned in section 45(1).

Armed forces

74.—(1) A person serving as a member of the naval, military or air forces of the Crown is not, by virtue of that service, a worker for the purposes of this Part.

(2) A member of any of the forces specified in subsection (3) who assists the activities of any of those forces is not, by virtue of anything done in assisting those activities, a worker for the purposes of this Part.

(3) The forces are—

(a)the Combined Cadet Force;

(b)the Sea Cadet Corps;

(c)the Army Cadet Force;

(d)the Air Training Corps.

Police

75.  This Part has effect in relation to a person who—

(a)(subject to such exceptions as may be prescribed), holds the office of constable as a police officer or an appointment as a police trainee or police reserve trainee under section 39 or 40 of the Police (Northern Ireland) Act 2000 (c. 32) or as a police cadet under section 42 of that Act, and

(b)does not hold that office or appointment under a contract of employment,

as if the person were employed by the Chief Constable under a worker’s contract.

Persons working on vessels

76.—(1) Subject to regulations under section 96 of the Pensions Act 2008 (c. 30), a person employed or engaged in any capacity on board a ship is not, by virtue of that employment or engagement, a worker for the purposes of this Part.

(2) In this section, “ship” includes—

(a)a hovercraft within the meaning of the Hovercraft Act 1968 (c. 59), and

(b)every description of vessel used in navigation.

Extension of definition of worker

77.  The Department may by regulations make provision for this Part to apply with or without modifications—

(a)as if any individual of a prescribed description (who would not otherwise be a worker) were a worker,

(b)as if there were in the case of any such individual a worker’s contract of a prescribed description under which the individual works, and

(c)as if a person of a prescribed description were the employer under that contract.

General

Interpretation of Part

78.  In this Part—

“active member”—

(a)

in relation to an occupational pension scheme, means a person who is in pensionable service under the scheme;

(b)

in relation to a personal pension scheme, means a jobholder in relation to whom there is an agreement within section 26(4) between the provider of the scheme and the employer or (where section 9 applies) a worker in relation to whom there are direct payment arrangements (within the meaning of section 107A of the Pension Schemes Act) between the worker and the employer;

“automatic enrolment scheme” is to be read in accordance with section 3(8);

“average salary benefits” means benefits the rate or amount of which is calculated by reference to the average salary of a member over the period of service on which the benefits are based;

“contract of employment” has the meaning given by section 70;

“defined benefits”, in relation to a member of an occupational pension scheme, means benefits which are not money purchase benefits (but the rate or amount of which is calculated by reference to earnings or service of the member or any other factor other than an amount available for their provision);

“defined benefits scheme” means an occupational pension scheme under which all the benefits that may be provided are defined benefits;

“employer” and “employment” have the meaning given by section 70;

“enrolment duty” means a duty under section 3(2), 5(2), 7(3) or 9(2);

“hybrid scheme” means an occupational pension scheme which is neither a defined benefits scheme nor a money purchase scheme;

the “IORP Directive” means Directive 2003/41/EC of the European Parliament and of the Council on the activities and supervision of institutions for occupational retirement provision;

“jobholder” has the meaning given by section 1(1);

“money purchase benefits”, in relation to a member of a pension scheme, means benefits the rate or amount of which is calculated by reference to a payment or payments made by the member or by any other person in respect of the member and which are not average salary benefits;

“money purchase scheme” means an occupational pension scheme under which all the benefits that may be provided are money purchase benefits;

“occupational pension scheme” has the meaning given by section 18;

“pension scheme” has the meaning given by section 1(5) of the Pension Schemes Act;

“pensionable age” has the meaning given by the rules in paragraph 1 of Schedule 2 to the 1995 Order;

“pensionable service”, in relation to a member of an occupational pension scheme, means service in any description of employment to which the scheme relates which qualifies the member (on the assumption that it continues for the appropriate period) for pension or other benefits under the scheme;

“personal pension scheme” has the meaning given by section 19;

“provider”—

(a)

in relation to a personal pension scheme to which section 26 applies, means the person referred to in subsection (1)(b) of that section;

(b)

in relation to any other personal pension scheme, has the meaning prescribed;

“qualifying earnings” has the meaning given by section 13;

“qualifying scheme” is to be read in accordance with section 2(5);

“tax year” means the 12 months beginning with 6th April in any year;

“trustee or manager” is to be construed in accordance with section 173 of the Pension Schemes Act (trustees or managers of schemes);

“worker” has the meaning given by section 70.