I am sure many of you have become familiar with “Workie” over the past few months.
Workie is the enormous, multi-coloured monster designed by the Pension Regulator to be the physical embodiment of the workplace pension. Yes, it’s as daft as it sounds.
The UK Government has been using Workie for a heavy-duty campaign to raise awareness of the auto enrolment duties which all employers now face.
Up to half a million small and micro employers must act this year to meet their new workplace pensions duties or risk a fine.
Our workplace pension specialist Peter Mutch has been told by the regulator that there are still 5,500 Aberdeen and Aberdeenshire employers who need to make pension arrangements.
All of these employers will have received letters from The Pensions Regulator alerting them of when their automatic enrolment duties start and reminding them to take action.
And there are already some horror stories out there.
A sports company which missed its staging date and failed to comply within the 60 day deadline was recently given a £400 fine and a further 28 days to comply.
The business repeatedly failed to provide evidence of compliance, resulting in the regulator issuing them with an escalating penalty notice.
This gave them 28 days to comply, after which the fine would increase to £2,500 per day. The daily accrual rate of escalating penalty notices is determined by the number of employees in the PAYE scheme.
Eventually, when the employer acted, a scheme was chosen within four days. By then the daily penalty had amounted to £10,000.
These fines, along with having to pay staff contributions of approximately £15,000, could have been avoided had the employer complied on time.
So far the roll out of automatic enrolment has been a success, with millions of workers now saving for their retirement who were not saving before.
Research shows that most employers want to do the right thing by their staff but that smaller employers are more likely to leave things to the last minute.
It is expected there will be more who, despite the message to prepare early, leave it too late or do not take action at all.
Failing to prepare risks avoidable compliance action, fines and perhaps unwanted publicity.
Legal news
There was a significant ruling in the Supreme Court last month which employers should be aware of.
The Court has ruled that employers can be held responsible for crimes committed by staff at work.
It follows a dispute involving Morrisons supermarket and a customer who, without provocation, claimed he was subjected to a serious aggressive attack by a staff member in a petrol station.
The unanimous judgment by the UK’s highest court confirms the far-reaching consequences of the principle of “vicarious liability” – where someone is held liable for another’s acts – and may make it easier for aggrieved customers to sue businesses in future.
Both the High Court and Court of Appeal declared that Morrisons was not responsible on the grounds that there was not a sufficiently close connection between what the attacker was employed to do and his conduct in attacking the customer.
But the Supreme Court judgment disagrees with that conclusion, saying it was wrong to “to regard Mr Khan as having metaphorically taken off his uniform the moment he stepped out from behind the counter”.
As a result of this ruling, employers will find it more difficult to avoid vicarious liability for their employees’ actions.
This underlines the importance of ensuring that employees’ behaviour, especially when dealing with the public, is exemplary.
