An automatic enrolment First-Tier Tribunal case held that the Appellant employer had a reasonable excuse for failing to comply with the various compliance and penalty notices that had been delivered to a locked mailbox not used by the employer. The penalty notices for non-compliance were set aside with a warning that all cases will turn on their specific facts. 

Auto-enrolment obligations are on-going, and employers need to ensure that compliance notices are promptly responded to. Where a notice is mistakenly missed, steps should be taken to mitigate losses, although this may still not be enough for a less generous judge!

Bolton Gate Farm Ltd v The Pensions Regulator

Background

In this case the employer, whilst properly enrolling its staff into a pension scheme, did not complete a declaration of compliance by the required date. The Pensions Regulator sent the employer three letters about the duty to complete the declaration and then a compliance notice. There was no response. The Pensions Regulator then issued the employer a fixed penalty notice and subsequently an escalating penalty notice. Again, no response.

All letters and notices were sent to a locked unused mailbox at a shared postal address, which was not the employer’s registered office address or part of its business. The employer discovered the letters and notices when later emptying the overflowing mailbox and contacted the Pensions Regulator to explain the circumstances as to why these were missed.

Appeal

The employer appealed the notices on the basis that they did not receive them , as they were sent to the mailbox of another property located at the same address. The Pensions Regulator rejected the appeals and upheld the penalty notices and held that the appeal did not amount to a reasonable excuse.

This was then brought to the First Tier Tribunal by the employer. The judge decided that the employer had successfully rebutted the presumption of service by demonstrating good evidence that the notices had genuinely not come to the employer’s attention until many months after they were served. The First Tier Tribunal therefore ruled that there was reasonable excuse for failing to comply in these specific circumstances, and the penalty notices for non-compliance were set aside.

Analysis

This case is an example of the presumption of delivery being successfully rebutted, though it should be noted that such cases often turn on their facts.

In this case, the employer had taken all the right steps upon discovering the correspondence from the Pensions Regulator, including immediately telephoning the Pensions Regulator, and had good evidence to demonstrate to the First Tier Tribunal that the notices had genuinely not come to the employer’s attention until many months after they were served. This included photographic evidence of the mailbox itself, and a full explanation as to why the notice had not been seen. While the Pensions Regulator had argued that the employer had chosen to ignore its post and did not manage its post properly, the First Tier Tribunal did not accept this argument, even though it was recognised that service had been affected at the correct address held on the Pension Regulator’s systems.

Key takeaway

Compliance with auto-enrolment obligations and any notices are still a key focus for the Pensions Regulator; employers should continue to comply and ensure that any notices are promptly responded to including producing contemporaneous evidence to assist with any investigations.