A bus company and its managing director have been fined more than £60,000 after admitting trying to avoid providing its employees with a workplace pension.
Stotts Tours (Oldham) and managing director Alan Stott were fined for deliberately failing to put 36 staff members who met the eligibility criteria into a pension scheme and pay minimum employer pension contributions, after pleading guilty to a total of 16 offences in November 2017.
This is the regulator’s first criminal prosecution of an employer for failing to comply with the auto-enrolment (AE) regulations
Both Stotts Tours (Oldham) and Stott pleaded guilty to eight counts of wilful failure to comply under section 3(2) of the Pensions Act 2008, contrary to section 45(1) of that Act, when their case was heard at Brighton Magistrates’ Court last year.
Commenting on the sentence, TPR director of AE Darren Ryder said: “Compliance with automatic enrolment remains very high and so it’s extremely disappointing that a tiny minority of employers continue to flout the law by denying their staff the pensions they are entitled to.
“This case shows the cost to employers that failing to comply with automatic enrolment can bring – a bill of tens of thousands of pounds, a criminal conviction and a damaged reputation.”
On top of the £14,400 in civil fines that the employer already owed, the company has been ordered to pay a £27,000 fine alongside £7,400 to cover costs and a £120 victim surcharge. Its director has been ordered to pay a £4,455 fine and a £120 victim surcharge.
Additionally, the company will have to pay an estimated £10,000 in backdated pension contributions for its staff, as well as paying all ongoing contributions or risk further enforcement action by the TPR.
District judge Teresa Szagun said: “Initially Mr Stott’s attitude was to bury his head in the sand. This later left him in a position where he was out of his depth.”
Hargreaves Lansdown head of policy Tom McPhail said employers needed to be aware that if they fail to give their employees the pensions they are entitled to, they are likely to get caught and fined.
He said: “Undoubtedly there is a minority of businesses who are trying to cheat their employees and save a few quid. As today’s successful prosecution shows, in the long run such an approach is likely to be a false economy. Employers should regard the funding of a decent pension for their employees as a necessary part of business life, no different to salaries or holidays.”