In the first known prosecution of its kind, a national recruitment company, accused of illegally ‘meddling’ with its workplace pensions scheme, is facing legal action from The Pensions Regulator (TPR).
According to reports, Derbyshire-based Workchain and a number of its Directors are facing prosecution after they opted out employees from the company’s auto-enrolment pension scheme by illegally using personal data to access individual online pension accounts.
Directors Phil Tong and Adam Hinkley, along with a further five senior members of staff, allegedly terminated employees’ pension scheme memberships in this way, in what is believed to have been an attempt to save money.
As a result of their actions, they have been charged with unauthorised access to a computer programme, contrary to section 1(1) of the Computer Misuse Act 1990, and are due to appear at Derby Magistrates’ Court on 7 June 2018.
TPR has said that the Directors’ actions were in direct violation of auto-enrolment regulations – which stipulate that employees who wish to opt out of a workplace pension scheme must do so themselves.
To date, the regulator has served 79,879 compliance notices to employers who have failed in their auto-enrolment duties, along with 32,000 fixed penalty notices.
Many businesses have also been taken to Court over auto-enrolment failings, but this case marks the first time that TPR has launched a prosecution for this particular offence.
If found guilty, Workchain’s Directors could potentially face a maximum sentence of six months’ imprisonment.
Lara Murray, an Associate and Employment Law expert with Palmers, said: “Many employers are not aware of the repercussions of failing to comply with auto-enrolment regulations. TPR has a range of sanctions at its disposal including substantial fines and custodial sentences.
“Businesses need to take action to ensure that they are not breaking the law by failing in their workplace pension duties.”
For help and advice on all aspects of employment law, including auto-enrolment compliance, please contact us.