A bus company has become the first firm in the UK to be sentenced for failing to automatically enrol staff into a workplace pension.
On February 7, Stotts Tours (Oldham) and it's managing director Alan Stott were ordered by Brighton Magistrates' Court to pay fines of £27,000 and £4,455 respectively. On top of that, the company also faces costs of £7400 and victim surcharges of £120. The company is also required to pay an estimated £10,000 in backdated pension contributions for staff as well as all ongoing contributions to avoid being hit with further enforcement action by The Pensions Regulator.
In court, the employer pleaded guilty to a total of 16 offences of willfully failing to comply with the UK law on workplace pensions. It is the first such prosecution brought by The Pensions Regulator (TPR). TPR found that 36 members of the Stotts Tours workforce should have been put into a pension scheme and announced the prosecution in September.
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."
Darren Ryder, director of automatic enrolment at The Pensions Regulator, said:
"Compliance with automatic enrolment remains very high and so it is 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."
Although this is the first time The Pensions Regulator has been to court to prosecute over auto enrolment offences, they have issued a number of fines to companies that have not complied with the legislation. The number of fines has actually hit record levels, between July and September 2017 increasing by 14% when compared with the previous quarter.