Tribunal Upholds Financial Penalties in Case of Non-Compliance with Pensions Act 2008

Citation: [2023] UKFTT 1062 (GRC)
Judgment on

Introduction

In the matter of Dr Snehal D’Souza v The Pensions Regulator, case reference PEN/2023/0164, the First-tier Tribunal (General Regulatory Chamber) was presented with an appeal against the issuance of an Escalating Penalty Notice (EPN) by The Pensions Regulator. This case is significant as it delves into the principles of presumption of service and the obligations of an employer under the Pensions Act 2008. It also explores the sufficiency of evidence needed to rebut statutory presumptions.

Key Facts

Dr. Snehal D’Souza, the appellant and employer in question, was issued an EPN due to non-compliance with a Compliance Notice (CN). The EPN imposed a daily penalty of £500 starting from the day after the CN was to be complied with. Prior to the EPN, a Fixed Penalty Notice (FPN) was issued, which the appellant had not reviewed nor challenged and therefore was not within the scope of the appeal.

The key points of contention by Dr. D’Souza were an alleged non-receipt of the CN and FPN, and the claim that there were general issues with receiving mail at their registered office address. The employer accepted receipt of the EPN and acted upon it by completing the required online redeclaration of compliance, but argued that the financial penalty imposed (£3000 accrued from non-compliance) would severely impact their enterprise financially.

The Pensions Regulator, the respondent, maintained that all necessary notices were correctly served to the registered office address, and that there was no substantial evidence provided by the appellant to counter the presumption of service.

Several legal principles underpinned the Tribunal’s decision:

  1. Presumption of Service: The case relied on the presumption of service established under section 7 of the Interpretation Act 1978 and reinforced by the Employers Duties (Registration and Compliance) Regulations 2010 (SI 2010/5), particularly Regulation 15. This statutory presumption dictates that documents are considered received by the intended recipient if they are properly addressed, pre-paid, and posted.

  2. Burden of Rebuttal: The Tribunal noted that a “simple denial of receipt is not enough to displace the presumption.” The appellant’s general claims of postal issues, without cogent evidence, were deemed insufficient to overcome the presumption of service.

  3. Employer’s Compliance Duties: Under the Pensions Act 2008, it is the employer’s responsibility to meet the requirements set forth, including filing timely declarations of compliance as per a CN.

  4. Validity of Penalties: The Tribunal assessed the validity of the penalties imposed, focusing on whether the EPN was issued correctly and whether the penalty amount was justified based on the duration of non-compliance.

Outcomes

The Tribunal concluded that the appellant had not provided an adequate basis to dispute the CN’s presumed receipt and consequently failed to meet the postal rebuttal burden. It found the presumption of service applied and that the subsequent penalties were correctly imposed and calculated.

Therefore, the Tribunal upheld the Regulator’s EPN and confirmed the penalty of £400 for the FPN along with the EPN penalty that accumulated to £3000.

Conclusion

In Dr Snehal D’Souza v The Pensions Regulator [2023] UKFTT 1062 (GRC), the First-tier Tribunal reaffirmed the principle that legal notices are presumed served when sent correctly to the registered address of an entity, placing the onus on the recipient to present explicit evidence to the contrary. The refusal to rescind the financial penalties underscores the stringent compliance requirements set by the Pensions Act 2008 and the liabilities faced by employers for non-adherence. The Tribunal’s decision signifies the importance of employers maintaining accurate communication channels and promptly addressing regulatory notices to mitigate potential sanctions.

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