16 Nov 2018

Recruitment firm hit with a fine and handed suspended prison terms after pensions investigation

Recruitment firm hit with a fine and handed suspended prison terms after pensions investigation

A recruitment firm has received a significant fine and two of its directors a suspended jail term following an investigation by the Pensions Regulator into its employee pension scheme.

The regulator prosecuted the employer, Workchain, and the directors, together with five senior members of staff after they pleaded guilty to computer misuse offences.

The investigation found that two of the directors, Phil Tong and Adam Hinkley had persuaded five senior members of staff to impersonate temporary workers to get their ID numbers so as to avoid having to make employee contributions. The members of staff had used NEST’s online system to opt workers out of the auto enrolment scheme.

Following a successful prosecution, the judge ordered Workchain to pay a £200,000 fine in addition to £60,000 in costs, saying that that there had been a co-ordinated effort to attempt to steal a march on their competitors.

As well as a fine for the firm, Tong and Hinkley were each given a four month prison sentence suspended for two years. They were also ordered to complete 200 hours of community service and pay £11,250 in costs.

Peter Mutch, Corporate Benefits Director, Aberdein Considine said:

“What this and other cases this year demonstrate is that the regulator definitely has teeth, and it will use its powers to the full extent.

It’s vital that employers ensure they understand the rules around auto enrolment and critically that they abide by these rules. As we can see, the penalties for not doing so are substantial, both for a firm and individually.”

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