Bus services organisation Stotts Tours Oldham and its managing director have been sentenced to pay more than £60,000 in fines and backdated pension contributions after being found guilty of failing to automatically enrol 36 employees into a workplace pension.
The Greater Manchester-based organisation and its managing director Alan Stott pleaded guilty to eight counts each of wilful failure to comply with automatic-enrolment duties under the Pensions Act 2008 at Brighton Magistrates Court on 10 November 2017.
This is the first time that The Pensions Regulator (TPR) has launched a prosecution for these particular offences.
TPR found that 36 employees at the bus services organisation should have been placed into a workplace pension scheme, and that payments should have been being paid from June 2015. TPR decided that the organisation’s non-compliance was deliberate and merited the criminal prosecution of both Stotts Tours Oldham and Alan Stott. It launched its prosecution process in September 2017.
The prosecution action accused Stotts Tours Oldham of not complying with section 45 of the Pensions Act 2008, which states that employers must make prescribed arrangements by which employees become active members of an automatic-enrolment pension scheme. Alan Stott was accused of failing to comply with section 46 of the Act, by either consenting or conniving in the organisation’s offence, or allowing the offence to be committed by neglect.
Stotts Tours Oldham and Stott were sentenced on Wednesday 7 February 2018 at Brighton Magistrates’ Court. Stotts Tours Oldham has been ordered to pay a £27,000 fine, £7,400 in costs and a £120 victim surcharge. In addition, the organisation must pay £14,400 in accrued civil fines for failing to comply with auto-enrolment, and approximately £10,000 in backdated pension contributions for affected employees. Stotts Tours Oldham must continue to pay ongoing pension contributions too or it will face further enforcement action.
Stott has been ordered to pay a £4,455 fine and a £120 victim surcharge.
Wilful failure to comply with automatic-enrolment duties is a criminal offence, and the maximum sentence that can be imposed in a magistrates’ court is an unlimited fine. If the case had been heard in a crown court, the maximum sentence that can be applied is two years’ imprisonment.
Teresa Szagun, district judge, 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.”
Darren Ryder, director of automatic enrolment at TPR, added: “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.”
Stotts Tours Oldham is unavailable for comment at time of publication.