The automatic enrolment requirements oblige employers to enrol the majority of their "workers" into a pension scheme. Until now, it had generally been assumed that members of limited liability partnerships (LLPs) were not workers for this purpose and so did not have to be enrolled.
The Supreme Court has shed significant doubt on this. In a case concerning whistleblowing (Clyde & Co LLP v Bates van Winkelhof), it has ruled that a member of an LLP can be a worker for the purposes of the Employment Rights Act 1996 (ERA). The definition of worker in the ERA is similar to that used in the legislation governing automatic enrolment. It is now therefore strongly arguable that LLPs should be enrolling their members (and should have done so from their original staging date).
We have spoken to the Pensions Regulator but it has not yet been able to confirm whether it will be issuing a statement on this. Hopefully it will do so and any statement will include clear guidance to LLPs as to whether they should now be enrolling their members and if so, from what date. We would suggest that LLPs hold off taking any action in the short term to see whether the Regulator clarifies its position.
On a related note, regulations are expected which will exempt anyone with HMRC fixed or enhanced protection from automatic enrolment. There may well be members of LLPs who have HMRC protection and will want to avoid being enrolled. Until the regulations come into force (and we are not certain when this will be) those affected will have to be enrolled (assuming the Regulator concludes that LLP members should be enrolled) but should then opt-out during the statutory period (if they do not want to lose their protected status).
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