Escalating penalty notices quadruple as TPR bats away ‘excuses’

Richard HarringtonThe number of escalating penalty notices more than quadrupled in the third quarter of 2016, with 576 fines issued over the period, compared to 165 for the previous four years of the auto-enrolment rollout.

A record 15,037 compliance notices were issued last quarter, bringing the total number since 2012 to 26,040, figures from The Pensions Regulator show.

Some employers that claimed illness, being short-staffed and thinking their payroll provider was responsible as excuses for their failure to act lost appeals to a tribunal. TPR has won all 42 tribunal challenges to its notices heard to date.

TPR issued 3,728 fixed penalty notices issued over the period – more than the 3,051 notices issued in the previous four years of the auto-enrolment rollout project. The number of escalating penalty notices.

Several employers contested their fines at a tribunal, claiming that their non-compliance was unintentional and that they had a ‘reasonable excuse’.

TPR says the tribunal is yet to find in favour of employers who cite illness, being short-staffed and thinking their payroll provider was responsible as reasons for missing their auto-enrolment deadlines. Tribunal judges have to consider whether there was a ‘reasonable excuse’, in the sense of something unexpected and outside the employer’s control that stops them meeting their statutory duties.

Finding the online system too difficult to use, not getting a reminder and making a mistake are also not ‘reasonable excuses’, says TPR.

Pensions minister Richard Harrington says: “Automatic enrolment is a great success. So far, more than 250,000 employers are helping more than 6.7 million people save into a workplace pension. The duty is being extended to all UK employers and they must ensure they enrol their staff into a scheme by the deadline for their firm, it’s the law.”

TPR executive director of auto-enrolment Charles Counsell says: “We recognise that employers have unique circumstances and challenges, but the law is still the law. Employers who are struggling should contact us, we are here to help – do not wait for a fine.

“The vast majority of employers are successfully meeting their automatic enrolment duties and are doing the right thing for their staff.  A small minority do leave plans too late but in most cases the nudge of a compliance notice is enough to get them back on track and avoid a fine.”