Tribunal Upholds Penalty for Employer's Non-Compliance with Auto-Enrolment Pension Duties

Introduction

The case of Sure Services Group Limited v The Pensions Regulator ([2024] UKFTT 134 (GRC)) examines issues surrounding an employer’s non-compliance with auto-enrolment pension duties imposed by the Pensions Act 2008 and subsequent enforcement actions taken by The Pensions Regulator. The First-tier Tribunal’s decision, presided over by Tribunal Judge Hazel Oliver, provides insight into statutory service, reasonable excuse in the context of penalty notices, and employer obligations under the Pensions Act.

Key Facts

Sure Services Group Limited (“the Appellant”) appealed against a fixed penalty notice imposed by The Pensions Regulator (“the Regulator”) for the failure to submit a declaration of compliance - a mandatory report under auto-enrolment regulations due within five months of the staging date. Despite reminders and an extended deadline, the Appellant did not meet obligations, prompting a penalty notice for £400. The Appellant’s primary grounds for appeal were a claimed non-receipt of the compliance notice and an illness-related delay due to the accountant in charge being hospitalized. The Tribunal found the notice was properly served at the registered office, a presumption that the Appellant did not successfully rebut.

Legal Principles

Presumption of Service

Judge Oliver emphasizes that, under Regulation 15(4) of the Employers’ Duties (Registration and Compliance) Regulations 2010 and section 303 of the Pensions Act 2004, a statutory presumption exists that a notice is received by an addressed person. The logic behind this principle is laid out by referencing London Borough of Southwark v (1) Runa Akhter & (2) Stel LLC [2017] UKUT 0150, establishing that mere assertions of non-receipt are insufficient to counteract this presumption. The evidence suggested the notice was indeed sent to the proper address, and as other correspondences (the fixed penalty notice) were received, this presumption stands.

Employer’s Duty and Responsibility for Compliance

Under the Pensions Act 2008, employers have a duty to enroll eligible jobholders onto pension schemes and declare compliance within specified time frames. Even if functionality is delegated to a third party, such as an accountant, it remains the employer’s responsibility to ensure compliance is met—a point underlined by referencing Pensions Regulator v Strathmore Medical Practice [2018] UKUT 104 (AAC).

Reasonable Excuse

In considering what constitutes a ‘reasonable excuse’, the case references In the Matter of the Bonas Group Pension Scheme [2011] UKUT B 33 (TCC) to illustrate how the Tribunal approaches evidence and may assess compliance failures differently from the Regulator.

Outcomes

The Tribunal dismissed the appeal, confirming the fixed penalty notice as the appropriate action. It was determined that the Appellant’s asserted reasons did not amount to a ‘reasonable excuse’ for the failure to comply. It was highlighted that the illness of the accountant did not align with the timeline of the failure to comply and there was no explanation for why the duties couldn’t have been assumed by another party within the accountancy. The Appellant remained liable for the fixed penalty due to not acting upon the compliance notice that had been presumed served.

Conclusion

The Tribunal’s decision in Sure Services Group Limited v The Pensions Regulator underscores the importance of employers’ strict adherence to their statutory duties under auto-enrolment requirements. Tribunal Judge Oliver illuminates key legal principles related to presumption of service and the direct responsibilities employers have, irrespective of any delegation to third parties. The Appellant’s failure to disprove the presumption of notice service and failure to present a persuasive argument for a ‘reasonable excuse’ led to the dismissal of the appeal and reassertion of the fixed penalty. This case reaffirms that an employer must remain vigilant and proactive about receiving and responding to statutory notices to avoid pecuniary penalties.