The prosecution of Derby-based Workchain Ltd and its staff has led to the largest fine and first custodial sentences for a case brought by The Pensions Regulator (TPR).
Workchain owners and directors Phil Tong and Adam Hinkley encouraged five senior staff at the company to get the workers out of 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.
Ms Neal and Messrs West, Tomlinson and Thorpe phoned NEST posing as their temporary workers to get the employees’ account ID numbers. They then logged onto NEST’s online system and opted the temporary workers out of their pension scheme.
After NEST became suspicious about a number of the calls from Workchain, The Pensions Regulator (TPR) examined recordings of the conversations.
These captured the moments the defendants secured the NEST ID numbers of multiple workers.
The employer, the directors and five senior staff all pleaded guilty to computer misuse offences when TPR prosecuted them.
Today at Derby Crown Court, Judge Nirmal Shant QC told the defendants their “co-ordinated effort” had been an “attempt to steal a march” on their competitors.
She said: “This amounted to a deliberate subversion of the automatic enrolment process. It was a deliberate attack on the integrity of the electronic systems of NEST.”
Judge Shant ordered Workchain (formerly known as Smart Recruitment UK Ltd) to pay a £200,000 fine and £60,930 costs.
Messrs Tong and Hinkley were each given a four-month prison sentence suspended for two years and were ordered to complete 200 hours of community service and to pay £11,250 costs.
Mr Armson was given a two-month prison sentence suspended for two years, a five-month overnight curfew and was ordered to pay £1,500 costs.
Ms Neal was given a two-month prison sentence suspended for two years and was ordered to do 200 hours of community service and to pay £1,500 costs. Mssrs West, Tomlinson and
Thorpe were each given a two-year community order and were ordered to do 150 hours of community service and to pay £500 costs.
Darren Ryder, TPR’s director of automatic enrolment, said: “The scale of the punishments handed down today shows the court agreed with us that these were very serious offences.
“Automatic enrolment has led to almost 10 million more 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.”
Minister for pensions and financial inclusion Guy Opperman said: “Automatic enrolment has transformed pension saving in this country, with almost 10 million people benefitting 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.”