Pensions insight
that were still non-compliant despite penalty action. The Regulator’s director of automatic enrolment, Darren Ryder, said at the time: “It is an offence for employers to provide TPR with false information on their declaration of compliance, but there are tell-tale signs indicating an employer might not be telling the truth. We can also detect employers who are failing to meet their automatic enrolment duties despite being issued with a penalty and we will take action if we suspect either of these is the case. “The vast majority of employers are meeting their responsibilities and automatic enrolment is now business as usual. But where employers fail to comply with the law, we will use our full range of our powers to ensure staff get the pensions they are due.” Employers that have been given an escalating penalty notice for non- compliance but have still failed to meet their responsibilities, along with a small number of employers selected at random, will also be subject to the spot checks. Court action There have been some very high-profile court cases, which have made national headlines because of non-compliance with the automatic enrolment duties, and in a landmark case, a third party rather than the employer, has also been successfully prosecuted. ● Stotts Tours (Oldham) – A bus company and its managing director were ordered to pay more than £60,000 after they admitted trying to deliberately avoid giving their staff workplace pensions. In November 2017, Stotts Tours (Oldham) and Alan Stott pleaded guilty to a total of sixteen offences of wilfully failing to comply with the law on workplace pensions – the first such prosecution by TPR. When they appeared at Brighton Magistrates’ Court for sentencing in February 2018, Stotts Tours (Oldham) was ordered to pay a £27,000 fine, £7,400 costs and a £120 victim surcharge. Alan Stott was ordered to pay a £4,455 fine and a £120 victim surcharge. This is on top of the £14,400 in civil fines that the employer already owed for failing to comply with the law on automatic enrolment. Stotts Tours (Oldham) was also told to
pay an estimated £10,000 in backdated pension contributions for its staff, as well as paying all ongoing contributions that fall due, or face further enforcement action from TPR. ● Crest Healthcare – In May 2018, a healthcare company and its managing director were ordered to pay more than £20,000 after they admitted misleading TPR about providing their staff with a workplace pension. Birmingham-based Crest Healthcare and managing director Sheila Aluko each pleaded guilty to one charge of knowingly or recklessly providing false or misleading information to TPR and two counts of wilfully failing to comply with their automatic enrolment duties. ...will use our full range of our powers to ensure staff get the pensions they are due. A whistleblower prompted the investigation into Crest Healthcare after contacting TPR to complain that workers at the company suspected that they had been misled into falsely believing that their pension scheme was up and running. Contributions were being taken from the pay packets of the workers, but Crest Healthcare would not give them information about their scheme. Sentencing the company and Aluko at Brighton Magistrates’ Court, district judge Teresa Szagun said that it was important to show that individuals and companies did not benefit from avoiding their automatic enrolment responsibilities. ● Workchain – Senior staff at a national recruitment agency tried to save money by impersonating their temporary workers to opt them out of their workplace pension scheme. Workchain Ltd owners and directors Phil Tong and Adam Hinkley encouraged five senior staff at the company to get the temporary workers out of the scheme so the company could avoid making pension payments on their behalf. Financial controller Hannah Armson, human resources and compliance officer Lisa Neal, and branch managers Martin
West, Robert Tomlinson and Andrew Thorpe, worked together to opt workers out of the NEST (National Employment Savings Trust) pension scheme using its online system. Derby-based Workchain (formerly known as Smart Recruitment UK Ltd) would have been able to avoid paying pension contributions if the offence had not been detected. A joint investigation into Workchain involving TPR, the Employment Agency Standards Inspectorate, Derbyshire Constabulary and Nottinghamshire Constabulary was launched after NEST reported its concerns about Workchain to TPR in May 2014. ● Hashmukh Shah – In a landmark case, the accountant of a London cafe has admitted falsely claiming to TPR that staff had been enrolled into pensions. The Regulator launched an investigation into Gran Caffe Londra in Knightsbridge, run by Primadell Ltd, after the company missed its deadline to automatically enrol staff into a pension in October 2015. When TPR arranged an inspection of the business, accountant Hashmukh Shah, 63, falsely declared that the company had met its duties. When later interviewed by TPR, Shah admitted purposely misleading the Regulator. This prevented an inspection of the business which would have uncovered the employer’s failure to automatically enrol its staff. Shah’s false declaration paused TPR’s investigations for more than a year, during which time staff continued to be denied the pension contributions that they were entitled to. At Brighton Magistrates Court, Shah admitted knowingly or recklessly providing false or misleading information to TPR. Deliberately providing false information to TPR about compliance with automatic enrolment duties is an offence under section 80 of the Pensions Act 2004. It is the first time that TPR has prosecuted a third party, working on behalf of an employer, for this offence. Gran Caffe Londra eventually became compliant in March 2018 and the company has backdated pension contributions for its staff. n
Information about an employer’s duties for automatic enrolment is available on TPR’s website: www. thepensionsregulator.gov.uk.
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Issue 45 | November 2018
| Professional in Payroll, Pensions and Reward |
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