Tribunal Upholds Penalty Against Employer for Failure to Comply with Pension Regulations

Citation: [2023] UKFTT 1060 (GRC)
Judgment on

Introduction

In the case of Evan One Ltd v The Pensions Regulator ([2023] UKFTT 1060 (GRC)), the First-tier Tribunal (General Regulatory Chamber) considered an appeal by Evan One Limited (“the Employer”) against a fixed penalty notice (“FPN”) issued by The Pensions Regulator under the Pensions Act 2008. Presided over by HHJ David Dixon, the case touches upon the Employer’s obligations under pension regulation, the scope of the Regulator’s powers, and the professional conduct of parties involved in regulatory compliance disputes.

Key Facts

Evan One Ltd was served with a Compliance Notice (“CN”) requiring the redeclaration of compliance with the Pensions Act 2008, which the Employer allegedly failed to do. The Regulator subsequently issued an FPN, which incurred a penalty of £400 for non-compliance. The Employer appealed this decision, first to the Regulator for a review, and then to the Tribunal. The Employer’s argument, articulated by an agent who is a practicing Chartered Certified Accountant, was that the Regulator had been acting vexatiously and without a proper understanding of the Act, especially as the Employer claimed their employees were not within the scope due to opt-out provisions.

The Tribunal’s role, as outlined under Section 44 of the Pensions Act 2008, is not to act as a review body but rather to evaluate the situation independently and determine the appropriate action for the Regulator. The legal principles at play here pertain to several key areas:

  1. Regulatory Compliance: The Pensions Act 2008 obliges Employers to declare compliance with specific regulations. Failure to do so can result in penalties under Section 40 of the Act.

  2. Regulator Authority & Requests: Under the same Act, the Regulator has authority to request information to ascertain compliance. Sections 73 and 74 empower the Regulator to enter premises for obtaining information, though this was not directly relevant to the appeal itself.

  3. Evidence and Accountability: The Employer is required to provide evidence that they are complying with the Act. The Employer’s argument that they were exempt due to employees opting out needed to be substantiated.

  4. Professional Conduct: Accusations without evidence, especially from a professional, are discouraged. The Tribunal highlighted the importance of maintaining professional standards and ethics, and suggested the Employer’s agent’s conduct was not in line with these standards.

Outcomes

The Tribunal found that Evan One Ltd did not provide any substantial basis for non-compliance with the CN. The appeal was dismissed, and the FPN was upheld, with confirmation and without any further directions. The Tribunal was critical of the Employer’s agent for making groundless and unprofessional accusations against the Regulator. The decision implies that the Employer failed in its obligations to prove compliance with the Pensions Act, suggesting there was a continuous requirement to fulfill the declaration of compliance.

Conclusion

In summary, Evan One Ltd v The Pensions Regulator reaffirmed the Regulator’s authority to request and obtain compliance confirmations from Employers regarding pension obligations. The case underscores an Employer’s responsibility to provide evidence of compliance when requested and highlights the expectation of professional behaviour amongst practitioners involved in legal disputes. This judgment serves as a reminder of the diligence required in meeting statutory obligations and maintaining professional conduct throughout the regulatory compliance process.