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The law
The law
The Pensions Act 2008 (the 2008 Act) requires employers to enrol job holders in occupational or workplace pension schemes. The respondent is required to ensure employers’ compliance with the 2008 Act and has specified powers under that Act to enable it to do so. Relevant provisions are:
Section 35 - the regulator may issue a compliance notice if an employer has contravened one or more of the employer duty provisions. The notice will require the person to take steps or to refrain from taking steps specified in the notice to remedy the contravention, usually within a given deadline. Subsection (3) sets out what may be included in a notice.
Section 37 – the regulator may issue an unpaid contributions notice to an employer if relevant contributions have not been paid on or before the due date. Subsection (4) sets out what may be included in a notice.
Section 40 – the regulator may issue a fixed penalty notice if the employer has failed to comply with a notice under various provisions of the 2008 Act including sections 35 and 37. This requires the employer to pay a penalty within the period specified in the notice. The penalty is £400, which is set by the Employers’ Duties (Registration and Compliance) Regulations 2010 (the 2010 Regulations). Subsection (5) sets out matters that must be included in a fixed penalty notice.
Section 41 - the regulator may issue an escalating penalty notice if the employer has failed to comply with various provisions of the 2008 Act including sections 35 and 37. This requires the employer to pay a penalty that accrues at a daily rate until the employer complies with the notice. The level of penalty is set out in Regulation 13 of the 2010 Regulations. An escalating penalty notice may not be issued in certain circumstances where a there is a pending request for review or appeal to the Tribunal.
Section 303(6)(a) of the Pensions Act 2004 (the 2004 Act) and regulation 15(4) of the 2010 Regulations create a presumption that notices are received by the employer when addressed to them and sent to their registered office or principal office address. However, that presumption is capable of being rebutted based on contrary evidence.
Section 44 of the 2008 Act allows a person to make a reference to the Tribunal in respect of the issue of a penalty notice or the amount of the penalty payable under the notice. Section 103(3) of the 2004 Act allows the Tribunal to consider any relevant evidence, even where it was not available to the Regulator. Section 103(4) provides that on a reference the Tribunal must determine what (if any) is the appropriate action for the Regulator to take. The role of the Tribunal is to make its own decision on the appropriate action to take, having regard to all the circumstances before it.
Section 43 of the 2008 Act provides such a reference is only permitted where the Regulator has reviewed the notice or if an application for a review has been made and the Regulator has determined not to carry out a review.