A company in Oldham has become the first to be prosecuted for not auto-enroling its staff into a workplace pension scheme.
All UK employers have to put workers meeting certain criteria into a workplace pension scheme and pay minimum employer pension contributions. This is called ‘automatic enrolment’ because the employer has to do it without any input from the worker.
If an employer wilfully fails to comply with its duty to auto-enrol workers into a pension then it commits a criminal offence under the Pensions Act 2008. Where a director of a company consented or ‘connived’ to commit the offence, or it was because of the director’s neglect, then that director is also personally guilty of the criminal offence.
The Pensions Regulator regulates workplace pension schemes in the UK. The Regulator investigated and found that 36 staff from a bus company, Stotts Tours (Oldham) should have been auto-enrolled into a pension. It found that the company should have been paying contributions since June 2015 into that scheme for them. The Regulator thought that the company deliberately failed to provide the pension and so it deserved to be criminally prosecuted. This has been the first prosecution of its kind since the auto-enrolment legislation was introduced.
The company and its managing director both pleaded guilty to 16 offences of wilfully failing to offer a workplace pension (at Brighton Magistrates’ Court). The offence can result in an unlimited fine (and up to two years imprisonment when the prosecution is brought in the Crown Court). Sentencing was deferred. The Regulator is also still chasing the company for civil fines of £14,400 for non-compliance.
The Regulator said “Automatic enrolment is not an option, it is the law. Employers should be in no doubt that if they wilfully refuse to become compliant they could end up with a criminal record – and will still have to give their staff the pensions they are due.” Employers have been warned!