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Illegal opt-outs cost directors £280k

The case ordered Workchain, which had previously traded under the name Smart Recruitment UK Limited to pay £200k and £60,930 in court costs

It all started to go seriously wrong for directors Phil Tong and Adam Hinkley when workplace pension scheme NEST became suspicious of a number of telephone calls from Workchain.

The Pensions Regulator (TPR) was alerted and recorded calls were used to prove that the company had obtained the NEST ID numbers of a number of employees to avoid making payments into the company pension scheme. The directors had plotted with five senior members of staff to opt employees out of their auto-enrolment pension scheme.

Branch managers Martin West, Andrew Thorpe and Robin Tomlinson, financial controller Hannah Armson and HR compliance officer Lisa Neal were proved to have been part of the plan to opt employees out of the pension scheme provided by NEST. Ms Neal and Messrs West, Tomlinson and Thorpe logged onto NEST’s online system after posing as temporary workers, obtaining ID numbers and then opting the workers out of the pension scheme.

The case, which was heard at Derby crown court, resulted in Judge Nirmal Shant ordering Workchain, which had previously traded under the name Smart Recruitment UK Limited, to pay a fine of £200k and £60,930 in court costs. The judge commented that the offence was a deliberate attempt to cheat the automatic enrolment process and potentially damage the integrity of NEST. This is the largest fine and the first custodial sentences handed down under the Computer Misuse Act 1990.

The defendants all pleaded guilty to the offences. Four-month prison sentences, suspended for two years, were handed down to both company directors, Tong and Hinkley, with costs of £11,250; in addition, the judge ordered both men to complete 200 hours of community service.

Senior staff member Ms Armson received a two-month prison sentence, suspended for two years. In addition to being ordered to pay costs of £1.5k, she received a five-month overnight curfew. Ms Neal was sentenced to two months in prison, suspended for two years, and ordered to pay £1.5k in costs.

Two-year community service orders were handed down to West, Tomlinson and Thorpe, who were each ordered to pay £500 in costs. All three were given 150 hours of community service.

TPR director Darren Ryder commented that the sentences demonstrated the severity of the offence. More than ten million people now save for their retirement through automatic enrolment, which was introduced under the Pensions Act 2008.

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