CCJs issued as auto enrolment penalties mount up

Issued: 7 February 2017


The first County Court Judgements (CCJs) have been issued for the non-payment of auto-enrolment penalties reports The Pensions Regulator (read the TPR’s press release here); the report adding a stern reminder to businesses of the potentially serious, long-term consequences that can result.

The Pensions Regulator’s latest quarterly bulletin – ‘Automatic enrolment: Compliance and enforcement’ – covers the period 1 October to 31 December 2016 (the bulletin is available from the TPR website). The nine-page bulletin reports that the number of Fixed Penalty Notices (FPNs) – the £400 fine for “failure to comply with a statutory notice or some specific employer duty” – rose by 2,919 during the last quarter of 2016 to a total of 9,831. In addition, 870 Escalating Penalty Notices (EPNs) – handing down a fine of between £50 and £10,000 per day – were issued during the same period, the total jumping to 1,477. If either remain unpaid employers then receive a County Court Judgement with all that that entails.

The increase in the number of fines issued comes as the five-year auto enrolment roll-out programme reaches the small and micro-business sector. Within this, The Pensions Regulator’s report singles out the hospitality industry as having “a higher risk of non-compliance” and consequently receiving a higher percentage of the fines issued. The industry, which includes pubs, clubs and restaurants, typically employs a large number of temporary workers, has a high level of workers speaking English as a second language and a large proportion of employees on non-standard contracts.

The report also comments on the total lack of success achieved by employers appealing against their fines at Tribunal: “…so far, no employer has been able to show that they had a reasonable excuse for failing to comply”, adding that the longer an employer takes to comply the more it will cost them with the eventual CCJ ultimately putting their business at risk.

The Pensions Act 2008 made auto enrolment a legal requirement for all employers, from the largest to the smallest. Introduced on 1 October 2012, the scheme is being phased in on a ‘workforce size’ basis with completion due in February 2018 and, as it rolls into its fifth year, it is now knocking on the door of ‘micro employers’, organisations with nine or fewer employees. It means that if you employ someone, even if it is just one person, you have a legal duty to first assess them against set criteria and then take the appropriate action as set out by the Act.

Whatever your feelings about auto enrolment, if you employ someone, and, if you haven’t done anything about it yet, now is the time to do so. Don’t be tempted to ignore it and don’t think you’re too small and will ‘slip under the radar’. The penalties are fearsome: a fixed £400 Fixed Penalty Notice, followed by a £50 to £10,000 per day Escalating Penalty Notice followed by a County Court Judgement means you’ll be paying fines and still have to implement the scheme – so you may as well do it straight away.

One Financial Solutions is here to help you. There’s plenty of information on our website (please click here) or, even better, just pick up the phone and call us. We’ve plenty of experience of both auto enrolment and setting up and managing workplace pension schemes – it may not be something you do every day, but we do. So we can explain how auto enrolment will affect you, can advise on the best type of scheme to have, help you set it up and introduce it to your employees (or employee). As an independent firm of IFAs we offer completely impartial advice, so please call us on 020 3714 9565 for a confidential chat.