A construction firm has lost its appeal against penalties imposed on it after failing to enrol staff on an occupational pension scheme.
Buildings UK Midlands Ltd’s appeal against fines imposed on it by the Pensions Regulator at the High Court’s first-tier tribunal was dismissed.
The court heard that the steel framed fabricator, based in Worcestershire, had been sent notices instructing it to enrol employees on a relevant pension scheme – a requirement under UK law.
However, the firm claimed it had not received all the correspondence.
It was subsequently fined an initial £400 and when it failed to respond to the first fine an Escalating Penalty Notice (EPN) was issued charging it £500 a day.
The firm alleged the post may not have been delivered and accused the regulator of putting the wrong address on the correspondence.
The firm’s former director James Price said letters were received in January, March and May 2024 advising the company of its automatic enrolment duties and inviting it to take action to avoid a penalty, the court heard.
However, the regulator said it served a compliance notice on 18 June 2024, warning the firm it would be fined if compliance did not happen by 29 July 2024.
The court heard the firm alleged “no such declaration was received”.
“A call was made to the appellant by the respondent on 1 July 2024 and the person who answered the call was recorded to have hung up the phone,” Judge Sander said.
“The Fixed Penalty Notice for £400 was subsequently issued on 14 August 2024. Further to that, and again having received no response or declaration, the respondent issued an Escalating Penalty Notice on 13 September 2024. The EPN explained that, if the requirements of the Compliance Notice were not met by 10 October 2024, a daily penalty of £500 would accrue from 11 October.”
The firm submitted its declaration of compliance on 26 September 2024 and lodged an appeal on 11 December 2024.
“The appellant argued that the business is located next to a traveller site and ‘therefore we were not in receipt of the paperwork within the required deadline’; the application was submitted as soon was possible,” the court heard.
In its response to the appeal, the respondent submitted that the grounds set out did not amount to a “reasonable excuse for the failure”.
“The statutory notices were issued to the correct address as per Companies House and that provided on the appeal form submitted to the Tribunal by the appellant,” the court heard.
“Known issues with the receipt of post, such as they are, are not considered to amount to a reasonable excuse. Although it issues reminders, is it not the duty of the respondent to make employers aware of their legal duties. The obligation to ensure that business is carried out lawfully and in compliance with the relevant regulations rests with the appellant.”
Judge Sander dismissed the appeal and said he found “no evidence” to suggest that there was a reasonable excuse for non-compliance, other than that the firm had not received the relevant documentation.
“It is incumbent on employers to ensure that businesses are compliant in this area, regardless of any reminders received or not received from the regulator,” the judge said.
“I do not, therefore, find that there is any reasonable excuse for the appellant’s failure to comply with its obligations.
“The Fixed Penalty Notice and the Escalating Penalty Notice are both upheld.”
Under the Pensions Act 2008, employers are required to enrol employees in occupational or workplace personal pension schemes.
Compliance with the act is monitored by the Pensions Regulator and employers are required to provide the information to the regulator within five months of a person’s start date and again on their third anniversary with the company.
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Nicola Harley