THE PENSIONS REGULATOR INVESTIGATES RECRUITMENT FIRM, WORKCHAIN LTD, IMPERSONATING ITS STAFF TO OPT-OUT OF AUTO-ENROLMENT

28 / 06 / 2018

A recent investigation by TPR has found managers and directors at Workchain Ltd, a national recruitment company based in the Midlands, impersonating staff by opting them out of the auto-enrolment compliant pension scheme in order to save the company money. The senior staff were asked to log onto Workchain’s temporary staff’s online National Employment Savings Trust (NEST) system and were then able to opt-out these members of staff.

The owners and directors of the company, Phil Tong and Adam Hinkley, encouraged the company’s Financial controller, HR and compliance officer, and branch managers to opt 67 temporary workers out of the pension scheme, in order for the company to avoid making employer contributions.

NEST originally reported its concerns about Workchain to TPR in May 2014 and as a result a joint investigation involving TPR, the Employment Agency Standards Inspectorate, Derbyshire Constabulary and Nottinghamshire Constabulary was launched. Since its investigation, TPR has now prosecuted Workchain, the two directors and five senior staff for an offence of unauthorised access to computer data, contrary to section 1(1) of the Computer Misuse Act 1990. All of the defendants pleaded guilty to the offence on the 7 June 2018 and will all be convicted for the offence. District Judge, Jonathan Taaffe, has committed the case to the Derby Crown Court for a sentencing hearing on 28 June 2018. The seven staff members face up to a maximum of 2 years’ imprisonment and they and the company also face an unlimited fine. It should be noted that this is the first time that TPR has launched prosecutions for this type of offence.

TPR’s Director of Auto-Enrolment, Darren Ryder stated that the company was misusing NEST’s online portal and that it was an attempt to use a quick and easy way to save the company some money and cheat the auto-enrolment system. TPR’s director then reiterated that: “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.”

Wedlake Bell Comment

TPR has warned that it is tightening down on those who do not comply with the pensions requirements, legislation and regulations. The regulator has stated that it will be increasing its use of its compliance and enforcement powers, and it should be noted that it has already issued close to 14,000 penalty notices since the beginning of 2018.
TPR’s executive director, Nicola Parish, has said that TPR is working towards being “clearer, quicker and tougher”. With some of the previous criticisms TPR has received concerning speed of response and lack of clarity when making direct contact, this would indeed be a welcomed change.
It is evident that TPR, in many regards, is becoming tougher, and those who are not compliant should be aware. Reiterating our sentiments and tone in our articles published on 27 April 2017 (TPR has secured its first and second criminal convictions refusing to provide Information) and on 29 September 2017 (TPR Launches its first prosecution for failure to auto-enrol staff“), there is a definite shift in TPR’s previous soft and non-threatening approach to a much stricter and serious approach. We definitely see this as a positive change.

For further information please contact Grace Ho