Ansata Hire Solutions Limited v The Pensions Regulator

Ansata Hire Solutions Limited ('the Employer') challenges a Fixed Penalty Notice ('FPN') issued by the Respondent ('the Regulator') on 22 October 2024 under Notice number 162091635423.

On 29 October 2024, the Employer requested a review which the Regulator conducted and on 8 November 2024 notified the Employer that the FPN was confirmed.

On 11 November 2024, the Employer appealed to the Tribunal.

The Employer's appeal grounds are:

The Employer asks for the fine to be voided.

In its response dated 31 December 2024, the Regulator opposed the appeal on the basis that the Employer has provided no evidence to overturn the statutory presumptions of service, delivery and receipt of the CN, and none of the above grounds amount to a reasonable excuse for the failures to comply with the CN which led to the FPN.

Mr Hussain was grateful for the Regulator's updated photograph of the Employer's premises. This clearly shows a white door on the left (which leads to the four upstairs flats) and the glass door on the right which has a letterbox at the bottom, beneath the shop front shutters when closed.

The glass door in fact serves as the entrance to both No. 214 Wellgate, Rotherham and the Employer's business at No. 216 Wellgate - as does the letterbox at the bottom of it.

The letterbox in the middle of the white door on the left of No. 216 in fact serves only the upstairs flats.

The Employer's post is sometimes put through the flats' letterbox and therefore goes missing.

The Employer has no access to the flats' entrance but chases the flat tenants daily to check for misdelivered post. However, the CN was missed. If the Regulator were to send it again, the Employer would fully comply with it.

Mr Hussain does not recall receiving the reminder letters from the Regulator sent in November 2023 and May 2024 setting out the deadline of 31 July 2024 for the Employer's re-declaration of compliance. Nor does he recall receiving the Regulator's letter dated 9 August 2024 - i.e. after the deadline for the re-declaration - granting a further 14 days to comply.

Mr Hussain says that the CN dated 27 August 2024 was not received, only the FPN dated 22 October 2024.

Mr Hussain says he has spoken to the landlord of the premises on several occasions asking for the shutter to be marked to show that the letter box at the bottom of the glass door serves both No. 216 and No. 214.

The regular post-lady knows to put post for the Employer through that letter box but even she sometimes gets mixed up.

Mr Hussain says he also installed separate black mailboxes on the wall to the left of the flats' front door, one for the Employer's family business at No. 216 (of which he one of three company officers), the other for the business at No.214 (of which he is the sole director). However, both those mailboxes rapidly fill up with junk mail even though they are emptied frequently.

The Employer's registered office has been the same address (at No. 216) since 2018. The Employer is assisted in financial matters by a firm of accountants.

The accountants said they had been contacted by the Regulator about re-declaration but advised the Employer to await the CN before instructing them to take action: however the Employer never received the CN.

The Employer recognises that he remains responsible for auto-enrolment obligations and should not have listened to the accountants but instead instructed them to deal with the re-declaration without waiting for the CN.

The Employer has not considered using a different registered office address: for important correspondence from banks and HMRC, Mr Hussain uses his home address.

Most clients and others now communicate via email so post is rare nowadays. However, given the difficulties experienced with the Regulator's communications, the Employer now checks the black wall-mounted mailboxes regularly as well as chasing the flat tenants regularly too.

The Employer disputes that if the CN, even though addressed correctly, was posted through the wrong door, it was served correctly.

As the CN is an important document, had it been sent by 'signed for' post, the Employer would have been in a better position to comply.

Mr Hussain, who joined the Employer as a director only in January 2023, is still learning and ready to comply with his auto-enrolment duties. He relied on the company's accountants to take the necessary steps.

Mr Hussain considers that he took reasonable steps to address the problems with post to No. 216 by having post from banks and HMRC sent directly to his home address; installing two wall-mounted mailboxes for the two businesses at Nos. 214 and 216; stating on the shutter that the letter box for Nos. 214 and 216 is beneath; and regularly chasing the flats' tenants for misdirected post.

This appeal relates to the Employer's failure to submit a 'second cycle' re-declaration of compliance, a requirement to inform the Regulator every three years how the Employer has met its statutory re-enrolment duties. The deadline for submission was 31 July 2024.

The Employer had completed its first declaration of compliance three years previously.

Mr Hussain's case it that he did not receive either of the two pre-deadline reminders nor the post-deadline reminder which granted a further 14 days to submit the re-declaration of compliance. None of these reminders are required by law but are sent by the Regulator as a courtesy.

However, as the Regulator received no response to any of the reminders, nor the re-declaration of compliance, on 27 August 2024 it sent the CN to the Employer's registered office address granting a six-week extension to the deadline.

The Regulator also telephoned the Employer's accountant on 9 September 2024 to give the Employer another opportunity to submit.

The Regulator received no response to the CN, the call nor the requirement to submit the re-declaration so on 22 October 2024 issued the FPN to the Employer's registered office address.

The Employer responded to the FPN within a week, seeking a review.

In this case, the Employer does not dispute that the Notices were issued but says that they did not come to his attention.

However, the Regulator is entitled to rely upon the statutory presumptions of service and receipt by section 144 of the Pensions Act 2008; section 303(6)(a) of the Pensions Act 2004; and Reg. 15(4) of the Employers' Duties (Registration and Compliance) Regulations 2010.

These presumptions are 'rebuttable', meaning that if the intended recipient produces evidence which proves, more likely than not, that a notice was not received, then the presumptions will not apply.

The Regulator argues that the Tribunal must look at the presumptions of service on the one hand, and the evidential proof - not mere assertion - of non-receipt on the other.

In this case, the Regulator says that it can rely on the strong statutory presumptions because the Employer's assertions fall short of the evidence needed to overturn them.

The FPN was correctly addressed and sent to the Employer's registered office.

The Regulator is not required to, nor does, use 'signed for' postal methods because the intended recipient could simply refuse to sign for it and avoid receiving statutory notices.

The Regulator can communicate with employers by email but only if it holds an up-do-date email address and in this case it does not. In any event, section 304 Pensions Act 2004 requires specific consent from the intended recipient to receive communications by email and in this case there is none.

No evidence has been provided to support the Employer's assertion that the CN did not reach his hands while the FPN, sent to same address, clearly did come to his attention.

In respect of auto-enrolment duties, a responsible employer must not only comply with its obligations promptly but must also ensure that its registered office is an 'appropriate address' in accordance with section 86 of the Companies Act 2006. This section provides that the registered office address must be one where "a document addressed to the company and delivered there by hand or by post would be expected to come to the attention of a person acting on behalf of the company". Failing to comply with this requirement without reasonable excuse is a criminal offence.

Late compliance with auto-enrolment duties is not a good reason to revoke the FPN nor a reasonable excuse for failing to comply with the CN.

The Employer, by its own account, had been aware for some time of issues with post to its registered office so must accept responsibility for the misplacement or loss of post. While the Employer says some steps were taken to address these issues, the Regulator says they were not enough to overcome the known problems and therefore do not provide a good reason to revoke the FPN.

The Regulator not only sent legal reminders, and telephoned, which it was not legally obliged to do, but also extended the Employer's deadline for compliance twice, thereby giving the Employer ample time to comply.

While employers are entitled to engage third party professionals to assist them with their auto-enrolment duties, the employer retains full responsibility for compliance.

The appeal should be dismissed as the Employer has provided no evidence to rebut the presumptions of service and has no reasonable excuse for its non-compliance which led to issue of the FPN.

Based on the evidence provided, the Tribunal finds the following facts proved on the balance of probabilities:

The Employer does not challenge that the CN was issued and sent by the Regulator to its registered office address: it simply denies that the CN was received.

No explanation has been given for non-delivery and/or non-receipt of the three reminder letters and then CN yet receipt of the FPN sent to the same address.

While Mr Hussain gave details of the steps he had taken to sort out problems with receiving post at the registered office, there is no evidence that these steps were effective nor that he informed the Regulator of a history of misdelivered post prior to his request for a review of the FPN.

There is also no evidence of any actions by the Employer resulting in reliable receipt of post. Such steps might include arranging re-direction by the Post Office to a more suitable address; changing the registered office address; or using a registered office service to receive time-sensitive and important post such as that sent by the Regulator.

All company directors should understand the purpose of a registered office address, the details of which are publicly available via the Companies House website: it is to enable anybody, whether a public body or other body needing to contact the company with important information, to have a reliable means of doing so.

If Mr Hussain is correct that there have been long-standing issues with post sent to the Employer's registered office, then it may be in breach of section 86 Companies Act 2006 which requires a registered office address to be "appropriate".

In any event, it is the responsibility of the Employer to ensure that post sent to its registered office can be properly delivered. Far from this, Mr Hussain's evidence suggests that post has not only been misdelivered or lost on one occasion but that this is a frequent occurrence: he suggests that none of the three reminder letters as well as the CN came to his attention.

The Tribunal considers that the Employer's explanations do not amount to sufficient evidence of non-receipt to overturn the statutory presumptions that a notice correctly addressed to a company's registered office is both delivered and received at that address in the ordinary course of post.

The Regulator is not required to use recorded or other tracked delivery methods to issue Notices because intended recipients could too easily refuse delivery.

Nor does Regulator have to provide evidence of delivery: it is entitled to rely on the statutory presumptions, the burden of rebutting which falls on the employer.

It is also important to note that the Pensions Act 2004 gives the Regulator the choice to serve Notices by post (rather than via email, which requires its express agreement). Given that using postal service triggers the statutory presumptions of issue, delivery and receipt, use of post is understandably the Regulator's preferred option.

In this case, the Employer had not only ample advance warning of the deadline for the re-declaration of compliance - which occurs every three years - but also two extensions totalling more than two months.

The Regulator was entitled to issue the FPN and did so, two weeks after expiry of the twice-extended deadline for compliance.

The declaration of compliance is not a mere administrative detail but a vital source of information and a central part of the Regulator's compliance and enforcement approach.

Even if an employer engages third party professionals to assist with auto-enrolment, it remains the employer's obligation to comply on time and in full with its duties. On the other hand, if the professionals fail to advise or act competently and promptly, the employer may have a cause of action against them.

Late compliance does not excuse earlier non-compliance: the deterrent effect of penalty notices would be greatly diminished if notices were revoked once compliance was eventually achieved. In this case, the Employer had been non-compliant for over three months by the time the re-declaration was submitted.

In all the circumstances, the Tribunal concludes that it was reasonable, fair and proportionate for the Regulator to serve the FPN.

In the Tribunal's judgment, the Employer has given no reasonable excuse for failing to complete a declaration of compliance on time.

The amount of the penalty is fixed by law so the Tribunal cannot reduce it below £400. If paying the penalty would cause hardship, the Employer can approach the Regulator to discuss possible payment terms.

The Tribunal accordingly concludes that there is no basis on which to revoke the FPN: it confirms the FPN and remits the matter to the Regulator. No directions are needed.