The Pensions Regulator’s first prosecution case against an employer that failed to comply with its auto-enrolment duties, is a “timely reminder” of the significance of workplace pensions, according to Burges Salmon.

The hearing will be held at Brighton Magistrates Court on 4 October and will see the regulator bring a case against bus company Stotts Tours (Oldham) Limited for failing to comply with the law on auto-enrolment in respect of 36 members of staff.

The company’s managing director Alan Stott is accused of consenting, conniving or allowing the offence to be committed by neglect. Under section 45 of the Pensions Act 2008 it is an offence for an employer to fail to automatically enrol a jobholder in a pension scheme.

Commenting on the case, Burges Salmon legal director in the pensions team Claire Rankin said the case “is a timely reminder of the significance of workplace pensions for policymakers”.

“Auto-enrolment is not standard employment law fare; The Pension Regulator’s power to prosecute both the employer and its directors and managers places the auto-enrolment laws on a similar footing to health and safety legislation, where similar powers exist to prosecute employers and those whose consent, connivance or neglect has led to the employer’s failure to comply.”

Rankin added that recent reports from the regulator reveal an enormous rise in its use of enforcement powers as the auto-enrolment laws extend to small and micro employers. “For such employers, it can be reasonably straightforward to identify the directors and managers personally responsible for the employer’s default”, Rankin said.

“Failure to respond adequately to The Pension Regulator’s initial enforcement steps (such as formal requests for information and compliance notices) is therefore particularly risky, running the risk of prosecution in addition. Mr Stott and his company face unlimited fines if convicted in Brighton Magistrates Court. If the prosecutions are referred to the Crown Court, the penalty is an unlimited fine and/or up to 2 years in prison.”

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