A bus company and its boss have been fined more than £31,000 for failing to enrol staff into a pension scheme.
Stotts Tours (Oldham) and Alan Stott were yesterday (7 February) sentenced at Brighton Magistrates' Court and ordered to pay fines of £27,000 and £4,455 respectively.
On top of that the company faces costs of £7,400 plus £120 in victim surcharges.
The employer pleaded guilty to a total of 16 offences of wilfully failing to comply with the law on workplace pensions in November – the first such prosecution by The Pensions Regulator (TPR).
The regulator found that 36 staff from Stotts Tours 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."
Stotts Tours (Oldham) must also pay an estimated £10,000 in backdated pension contributions for its staff, as well as all ongoing contributions, to avoid facing further enforcement action from The Pensions Regulator.
It already owes £14,400 in civil fines for failing to comply with the law on automatic enrolment.
The total costs, including previous fines for non-compliance and the backdated pension contributions, amount to more than £60,000.
From 2012 UK employers have been required by law to enrol their staff into a pension scheme as part of auto-enrolment.
They must also pay minimum employer contributions currently set at 1 per cent but due to increase to 2 per cent in April and 3 per cent next year.
Those failing to comply face unlimited fine from the regulator or prosecution through the courts.
Darren Ryder, director of automatic enrolment at the 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 was the first prosecution for auto-enrolment offences, the regulator has issued a number of fines to companies that have not complied with requirements.
Between July and September 2017 the number of fixed penalty notices and escalating penalty notices both reached new records, increasing 14.2 per cent to 5,479 and by 3.5 per cent to 1,433 respectively, when compared with the previous quarter.
In total, 169 employers were taken to court for failing to pay an escalating penalty notice for not meeting their automatic enrolment duties, with fines totalling more than £1.25m.
Tom McPhail, head of policy at Hargreaves Lansdown, said firms dodging the law should expect to get fined by the regulator.
He said: "The Pensions Regulator has put in place effective systems and processes, so employers should be aware that if they fail to give their employees the pensions they are entitled to, they are likely to get caught and fined.
"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."
carmen.reichman@ft.com
