Court hands recruitment firm largest fine and first custodial sentences to follow a TPR prosecution

A national recruitment agency, its directors and senior staff have been ordered to pay more than £280,000 for plotting to illegally opt temporary workers out of their pension scheme. 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).

Owners and directors of Workchain Ltd, formerly known as Smart recruitment, encouraged five senior staff to opt workers out of a scheme to avoid making pension contributions on their behalf. They phoned NEST posing as their temporary workers in order to obtain the employees’ account ID numbers and then logged onto NEST’s online portal and opted the workers out of their pension scheme.

On 26 October 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.

This is an offence under the Computer Misuse Act 1990. 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.”

Every employer in the UK has a number of workplace pension duties. Once an employer has set up a pension scheme and put eligible staff into it, their duties don’t end there. It’s important that employers get to know their ongoing duties – TPR will take action if they fail to comply.

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