Amongst the staff at recruitment agency Workchain – who were prosecuted for illegally opting staff out of workplace pensions – was an HR and compliance officer. She was one of five senior employees, who had been encouraged by two directors of the company, to mislead the National Employment Savings Trust (NEST).
By logging in to the organisation’s online pension system and using employees’ personal details followed by termination of temporary employees’ workplace pension membership, the company failed to pay money on employer pension contributions. If employees wish to opt out of the pension, auto-enrolment regulations state that they have to do it personally.
After concerns about Workchain by NEST to TPR - the Employment Agency Standards Inspectorate - Derbyshire Constabulary and Nottinghamshire Constabulary conducted an investigation which resulted in prosecution by the Pensions Regulator (TPR) - the first that they had ever instigated. The accusation was that the parties used unauthorised access to a computer programme under section 1 (1) of the Computer Misuse Act 1990. By using the pass codes of 67 workers to log into NEST’s online portal, the senior staff members of the company had opted them out of their pension.
Darren Ryder, director of automatic enrolment at TPR, said:
“Workchain’s directors saw denying their temporary workers pensions as a quick and easy way to save the company 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 a worker out of a pension scheme, even if the worker agrees. Those who try to avoid their pension responsibilities in this way face prosecution.”
All seven of the defendants pleaded guilty at Derby Magistrates’ Court and District Judge Jonathan Taaffe committed the case to Derby Crown Court for a sentencing hearing on 28 June 2018. In the Magistrates’ Court, the maximum sentence for computer misuse is six months’ imprisonment and an unlimited fine. However, if sentence is passed in the Crown Court, the sentence can be up to two years’ imprisonment and an unlimited fine.
Nathan Long, Senior Pension Aanalyst at Hargreaves Lansdown, stated:
“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 squirreling 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.”
