A bus company and its managing director will have to pay £63,495 after they admitted trying to deliberately avoid giving their staff workplace pensions.
It follows the sentencing of Stotts Tours (Oldham) and Director/Transport Manager and major shareholder Alan Stott, 88, for wilful non-compliance with automatic enrolment – the first prosecution of its kind.
The firm, of 142 Lees Road, Oldham, holds an O-Licence for 40 vehicles.
The long-standing firm – not to be confused with the similarly named but unconnected E Stott & Sons of Huddersfield – specialises in contracted bus routes in the Manchester area.
Last year Stotts Tours (Oldham) and Alan Stott pleaded guilty to a total of 16 offences of wilfully failing to comply with the Pensions Act 2008 on workplace pensions – the first such prosecution by The Pensions Regulator (TPR) [routeone/News/29 November].
Appearing at Brighton Magistrates’ Court for sentencing. Stotts Tours (Oldham) was ordered to pay a £27,000 fine, £7,400 costs and a £120 victim surcharge. Alan Stott was ordered to pay a £4,455 fine and a £120 victim surcharge.
This is on top of the £14,400 in civil fines that the employer already owes for failing to comply with the law on automatic enrolment. TPR has also secured a county court judgement (CCJ) against Stotts Tours (Oldham) for the non-payment of the £14,400.
Stotts Tours (Oldham) must also pay an estimated £10,000 in backdated pension contributions for its staff, as well as paying all ongoing contributions that fall due, or it will face further enforcement action from TPR.
District Judge Teresa Szagun said: “Initially Mr Stott’s attitude was to bury his head in the sand. This later left him in a position where he was out of his depth.”
Stotts Tours (Oldham) should have put its staff into a workplace pension and begun paying pension contributions from June 2015.
The TPR found that 36 staff from Stotts Tours (Oldham) should have been put into a pension scheme. It decided that the company’s failure to comply with the law was deliberate and merited the criminal prosecution of both Stotts Tours (Oldham) and Alan Stott.
After the hearing, Darren Ryder, TPR’s Director of Automatic Enrolment, said: “Compliance with automatic enrolment remains very high and so it’s extremely disappointing that a tiny minority of employers continue to flout the law by denying their staff the pensions they are entitled to.
“This case shows the cost to employers that failing to comply with automatic enrolment can bring – a bill of tens of thousands of pounds, a criminal conviction and a damaged reputation.”
All UK employers are required by law to put staff meeting certain eligibility criteria into a pension scheme and pay minimum employer pension contributions. This is called automatic enrolment because the employer is required to do it without any input from the worker.