Recruitment organisation Workchain, as well as its two directors and five senior staff members, have pleaded guilty to illegally opting employees out of the organisation’s workplace pension.
Derby-based Workchain, its directors Phil Tong and Adam Hinkley, and a further five senior staff members pleaded guilty at Derby Magistrates’ Court today (Thursday 7 June 2018) of logging in to the organisation’s online pension system using employees’ personal details and then terminating temporary employees’ workplace pension membership in order to save money on employer pension contributions. Auto-enrolment regulations specify that employees have to opt out of their pension arrangement themselves, if they wish to.
The Pensions Regulator (TPR) raised the prosecution against Workchain and accused the charged parties with unauthorised access to a computer programme under section 1 (1) of the Computer Misuse Act 1990.
The case was the result of a joint investigation into the recruitment organisation after pension provider National Employment Savings Trust (Nest) reported concerns about Workchain to TPR in May 2014. TPR, the Employment Agency Standards Inspectorate, Derbyshire Constabulary and Nottinghamshire Constabulary conducted the investigation.
This is the first time TPR has prosecuted for this offence.
District judge Jonathan Taaffee committed the case to Derby Crown Court for a sentencing hearing on 28 June 2018.
The maximum sentence for a conviction of computer misuse is six months’ imprisonment and an unlimited fine if the sentence is passed in a magistrates’ court, or two years’ imprisonment and an unlimited fine if the judgement is passed in the Crown Court.
Darren Ryder, director of automatic enrolment at TPR, said: “Workchain’s directors saw denying their temporary [employees] pensions as a quick and easy way to save the [organisation] money. Both they and their senior staff thought nothing of misusing Nest’s online portal. Thanks to the vigilance of Nest, their attempt to cheat the automatic enrolment system failed.
“Automatic enrolment is not an option, it’s the law and the law is clear; no one can opt [an employee] out of a pension scheme, even if the [employee] agrees. Those who try to avoid their pension responsibilities in this way face prosecution.”
Nathan Long, senior pension analyst at Hargreaves Lansdown, added: “The Pension Regulator rightly continues to clamp down on rogue employers who ignore or disobey workplace pension rules. The country’s retirement prospects depend on everyone squirrelling money away for the future and unscrupulous employers simply cannot be allowed to undermine this vital initiative.
“Employers are responsible for enrolling their staff into pensions, but staff have ultimate responsibility for their financial future. This particular case involved treating temporary [employees] differently to permanent staff, which given more modern, flexible working patterns makes it particularly important. Any employers who are not doing their bit should get their house in order quickly, as the regulator once again shows it is not to be crossed.”
Workchain was unavailable for comment at time of publication.