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Court hands recruitment firm largest fine and first custodial sentences to follow a TPR prosecution

Ref: PN18-56

Issued: Friday 26 October 2018

A national recruitment agency, its directors and senior staff have been ordered to pay more than £280,000 for plotting to illegally opt workers out of their pension scheme.

The prosecution of Derby-based Workchain Ltd and its staff has led to the largest fine and first custodial sentences for a case brought by The Pensions Regulator (TPR).

Workchain owners and directors Phil Tong and Adam Hinkley encouraged five senior staff at the company to get the workers out of the scheme so the company could avoid making pension payments on their behalf.

Financial controller Hannah Armson, HR and compliance officer Lisa Neal and branch managers Martin West, Robert Tomlinson and Andrew Thorpe then worked together to opt workers out of the NEST pension scheme.

Neal, West, Tomlinson and Thorpe phoned NEST posing as their temporary workers to get the employees’ account ID numbers. They then logged onto NEST’s online system and opted the temporary workers out of their pension scheme.

Accessing the system by posing as workers is contrary to the terms of use of the system, which requires employees to opt out themselves, and is an offence under the Computer Misuse Act 1990.

However after NEST became suspicious about a number of the calls from Workchain, The Pensions Regulator (TPR) examined recordings of the conversations. These captured the moments the defendants secured the NEST ID numbers of multiple workers.

The employer, the directors and five senior staff all pleaded guilty to computer misuse offences after TPR prosecuted them.

Today (26 October) at Derby Crown Court, Judge Nirmal Shant QC told the defendants their “co-ordinated effort” had been an “attempt to steal a march” on their competitors.

She said: “This amounted to a deliberate subversion of the automatic enrolment process. It was a deliberate attack on the integrity of the electronic systems of NEST.”

Judge Shant ordered Workchain (formerly known as Smart Recruitment UK Ltd) to pay a £200,000 fine and £60,930 costs. Tong and Hinkley were each given a four-month prison sentence suspended for two years and were ordered to complete 200 hours of community service and to pay £11,250 costs. Armson was given a two-month prison sentence suspended for two years, a five-month overnight curfew and was ordered to pay £1,500 costs. Neal was given a two-month prison sentence suspended for two years and was ordered to do 200 hours of community service and to pay £1,500 costs. West, Tomlinson and Thorpe were each given a two year community order and were ordered to do 150 hours of community service and to pay £500 costs.

Darren Ryder, TPR’s Director of Automatic Enrolment, said:

“The scale of the punishments handed down today shows the court agreed with us that these were very serious offences.

“Automatic enrolment has led to almost 10 million more people saving towards their retirement. Its success cannot be allowed to be undermined by such incredibly rare cases of unacceptable behaviour as that of Workchain.

“NEST’s vigilance, our thorough investigation and the sentences from the court have led to a clear message - employers cannot opt a worker out of a pension scheme, even if the worker agrees. Those who try to avoid their pension responsibilities in this way face receiving heavy fines and criminal records.”

Minister for Pensions and Financial Inclusion, Guy Opperman, said:

“Automatic enrolment has transformed pension saving in this country, with almost 10 million people benefitting so far. The offenders sentenced today shamefully tried to cheat the system designed to help give workers a secure retirement and I welcome the regulator’s action in bringing them to justice.

“This tough sentence should serve as a warning to any rogue employers who try to flout the rules that they can’t get away with it and will feel the full force of the law.”

Editor's notes

  1. TPR prosecuted:
    • Workchain Ltd, which has its head office in Stephensons Way, Derby, Derbyshire
    • Phil Tong, 41, of Spend Lane, Ashbourne, Derbyshire
    • Adam Hinkley, 40, of Shardlow Road, Alvaston, Derbyshire
    • Hannah Armson, 34, of Heath Lane, Findern, Derbyshire
    • Lisa Neal, 34, of Marylebone Crescent, Mackworth, Derbyshire
    • Martin West, 31, of Jackson Road, Hucknall , Nottinghamshire
    • Robert Tomlinson, 38, of Crosby Close, Forest Town, Nottinghamshire
    • Andrew Thorpe, 34, of Thorpe Street, Burntwood, Staffordshire
  2. A joint investigation into Workchain involving TPR, the Employment Agency Standards Inspectorate, Derbyshire Constabulary and Nottinghamshire Constabulary was launched after NEST reported its concerns about Workchain to TPR in May 2014.
  3. Workchain, which has offices in towns and cities across the Midlands and the neighbouring counties, would have been able to avoid paying pension contributions if the offence had not been detected.
  4. TPR prosecuted the defendants for an offence of unauthorised access to computer data, contrary to section 1(1) of the Computer Misuse Act 1990. This is the first time that TPR has launched prosecutions for this offence.
  5. All of the defendants pleaded guilty to the offence when they appeared for the first time at Derby Magistrates’ Court on 7 June. However District Judge Jonathan Taaffe decided that the maximum punishment he could hand down was insufficient for the case so sent the case to the Crown Court for sentencing.
  6. The conviction for computer misuse carried a maximum sentence of six months’ imprisonment and / or an unlimited fine.
  7. TPR is the regulator of work-based pension schemes in the UK. Our statutory objectives are: to protect members’ benefits; to reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of, the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only).

Press contacts

James Glover
Senior Media Officer
01273 662098

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