Directors and senior staff at Derby-based recruitment organisation Workchain have received suspended prison sentences, and have been ordered to pay more than £280,000 in fines for plotting to illegally opt workers out of their pension scheme.
Owners and directors Phil Tong and Adam Hinkley encouraged five senior Workchain staff members to remove employees from the scheme so the company could avoid making pension payments on their behalf.
Financial controller Hannah Armson, HR and compliance officer Lisa Neal and branch managers Martin West, Robert Tomlinson and Andrew Thorpe then worked together to opt workers out of the Nest pension scheme.
Neal, West, Tomlinson and Thorpe phoned Nest, posing as temporary employees, to get their account ID numbers. They then logged onto Nest's online system and opted the temporary workers out of their pension scheme.
The Pensions Regulator (TPR) examined recordings of the conversations after Nest became suspicious about a number of the calls.
A joint investigation, involving TPR, the Employment Agency Standards Inspectorate, and the Derbyshire and Nottinghamshire Constabularies was launched in May 2014.
TPR prosecuted the Workchain staff members for an offence of unauthorised access to computer data, contrary to section 1(1) of the Computer Misuse Act 1990. This is the first time that TPR has launched prosecutions for this offence.
The employer, the directors and five senior Workchain staff all pleaded guilty to computer misuse offences when they appeared at Derby Magistrates’ Court on 7 June 2018. However, District Judge Jonathan Taaffe decided that the maximum punishment he could hand down was insufficient for the case, so sent it to Derby Crown Court for sentencing.
Judge Nirmal Shant QC told the defendants their co-ordinated effort had been an attempt to gain an advantage on their competitors.
She said: "This amounted to a deliberate subversion of the auto-enrolment process. It was a deliberate attack on the integrity of the electronic systems of Nest."
Shant ordered Workchain, formerly known as Smart Recruitment, to pay a £200,000 fine and £60,930 costs. Tong and Hinley were each given a four-month prison sentence, suspended for two years, and were ordered to complete 200 hours of community service and pay £11,250 costs.
Armson was given a two-month prison sentence, suspended for two years, a five-month overnight curfew and was ordered to pay costs of £1,500. Neal was given a two-month prison sentence, suspended for two years, and was ordered to complete 200 hours of community service and to pay £1,500 costs.
West, Tomlinson and Thorpe were each given a two-year community order, 150 hours of community service and were ordered to pay £500 costs.
Darren Ryder, director of auto-enrolment at TPR, said: "The scale of the punishments handed down today shows the court agreed with us that these were very serious offences. Auto-enrolment has led to almost 10 million people saving towards their retirement. Its success cannot be allowed to be undermined by such incredibly rare cases of unacceptable behaviour as that of Workchain.
"Nest's vigilance, our thorough investigation and the sentences from the court have led to a clear message. Employers cannot opt a worker out of a pension scheme, even if the worker agrees. Those who try to avoid their pension responsibilities in this way face receiving heavy fines and criminal records."
Guy Opperman, Minister for Pensions and Financial Inclusion, said: “Automatic enrolment has transformed pension saving in this country, with almost 10 million people benefiting so far. The offenders sentenced today shamefully tried to cheat the system designed to help give workers a secure retirement and I welcome the regulator’s action in bringing them to justice.
“This tough sentence should serve as a warning to any rogue employers who try to flout the rules that they can’t get away with it and will feel the full force of the law.”
