Tribunal Upholds Penalty for Non-Compliance with Pension Regulations: Purdy v The Pensions Regulator

Citation: [2024] UKFTT 5 (GRC)
Judgment on

Introduction

In the matter of Ashley Kevin Purdy v The Pensions Regulator [2024] UKFTT 5 (GRC), the First-tier Tribunal (General Regulatory Chamber, Pensions Regulation) addressed an appeal by the Appellant, Ashley Kevin Purdy, against a fixed penalty notice issued by the Pensions Regulator for failure to comply with a Compliance Notice under the Pensions Act 2008. This article provides an analysis of the key topics and legal principles applied in the case in order to assist legal professionals in grasping the rationale behind the Tribunal’s decision.

Key Facts

The Tribunal heard the case on 5 January 2024, based on written evidence without an oral hearing. The Appellant was penalized for not submitting a required re-declaration of compliance within the mandated timeframe, an obligation for every employer subject to the automatic enrolment provisions in the Pensions Act 2008.

The key facts of the case involve:

  • The Appellant’s failure to complete the re-declaration by 12 June 2023, leading to a Compliance Notice served on 21 June 2023.
  • The subsequent issue of a Fixed Penalty Notice on 17 August 2023 for failing to comply with that Compliance Notice.
  • The Appellant’s grounds for appeal which included postal issues and previous compliance history.
  • The completion of the re-declaration of compliance on 20 August 2023 and request for a review of the penalty notice.
  • The Pensions Regulator’s affirmation of the penalty notice upon review.

The legal principles at play in this case stem predominantly from the Pensions Act 2008, which set out employers’ duties for automatic enrollment of ‘jobholders’ into pension schemes and the powers of the Pensions Regulator to enforce compliance. The Employer’s Duties (Registration and Compliance) Regulations 2010 specify the framework and timelines for compliance declarations.

The judgments applied several key legal principles:

  • The obligation for employers to comply with Compliance Notices as mandatory, with fixed penalties prescribed by the Act for non-compliance (¶5).
  • The Tribunal’s role in confirming, varying, or revoking a Fixed Penalty Notice (¶6).
  • The presumptions of service regarding postal dispatchment of notices (¶12), referring to sections 7 of the Interpretation Act 1978 and section 303 of the Pensions Act 2004.
  • The lack of discretion by the Regulator and Tribunal to issue or recommend penalties lower than the prescribed amount (¶15).

The Appellant’s arguments were grounded in logistical issues, however, as indicated in ¶19, there was no evidence sufficient to rebut the presumption of service.

Outcomes

Following the analysis of the submissions, evidence, and applicable law, the Tribunal concluded that:

  • The Employer did not present a reasonable excuse for the failure to comply with the Compliance Notice, despite the Employer’s cited postal issues (¶17-18).
  • The Regulator’s action to issue the Penalty Notice was appropriate, and it was confirmed by the Tribunal (¶23).

Thus, the Tribunal dismissed the reference and remitted the matter to the Regulator, confirming the enforcement of the penalty.

Conclusion

The Tribunal’s decision in Purdy v The Pensions Regulator underscores the imperative that employers strictly adhere to the deadlines and requirements set forth in the Pensions Act 2008 and the connected Regulations. The case highlights the significance the law places on employers’ timely and accurate declarations for their compliance with pension auto-enrolment duties. The Tribunal will not mitigate penalties for logistical issues unless a substantial rebuttal of service presumption is provided. Notably, the decision indicates that an employer’s previous compliance does not grant leeway for subsequent lapses. This decision serves as a clear warning to other employers that non-compliance with statutory duties, even inadvertently, can carry significant penalties and that the Regulator’s and Tribunal’s discretion to relieve such non-compliance is very limited.

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