Kenny targets 'unacceptable' directors with MoU
IRELAND - Paul Kenny, the Pensions Ombudsman has signed a Memorandum of Understanding with the Office of the Director of Corporate Enforcement (ODCE) to allow him to pass on details of "unacceptable behaviour by company directors" - a move bringing closer cooperation against rogue employers.
The memorandum will allow for the formal transfer of information between the offices of Kenny and Paul Appleby, the director of corporate enforcement, and follows similar agreements with the Pensions Board, the financial regulator and financial services ombudsman and the UK pensions ombudsman. (See earlier IPE article: Pensions ombudsman to highlight possible tax offences)
Kenny explained that in his investigations "I can become aware of activities or actions by companies or company directors which I believe should be brought to the attention of the ODCE".
He warned this is particularly the case with smaller companies in the construction industry where Kenny has been forced to initiate a number of civil and criminal legal actions over actions relating to the mandatory Construction Workers Pension Scheme (CWPS).
"Sometimes company directors believe, or are advised, that they can evade my investigation by closing down their company, possibly continuing on the business under a new company name. As I have demonstrated clearly in the past, such tactics will not curtail my investigation," warned Kenny.
He added the new memorandum now formalises communications between Kenny and Appleby so that "the unacceptable behaviour of such directors will be brought to the attention of the ODCE".
This focus on pursuing directors of failed companies personally was highlighted by the successful prosecution last month of Patrick Deering, a director of the now liquidated Owjen Electrical Services.
Initial complaints had been made against the firm over allegations pension contributions had been deducted but not remitted to a scheme. But while the company had been liquidated Kenny decided to prosecute Deering personally over the failure to produce documentation relating to the two complaints.
Following the successful court case Kenny warned: "He will still have to produce the documentation and he was fined €2,000 with €1,400 costs. If necessary I will go to the circuit court for an order requiring him to produce the documentation."
However, the Ombudsman pointed out the important issue is that the prosecution underlines the fact that even if a company is liquidated "directors cannot walk away from their responsibilities".
Kenny added: "I will take all legal steps open to me to obtain the documentation I require. Furthermore, in cases involving company liquidations where it is clear to me that the directors must have been fully aware of what was happening, I will issue a final determination on a complaint which will provide for redress and make directors personally liable."
Meanwhile, the Ombudsman confirmed a separate case requiring Des Murphy, a director of Recruit & Construct, to produce payslips relating to complaints of non-remittance of pension contributions was struck out of court. This followed Murphy's decision to produce the documentation ahead of the court case and an agreement to pay the Ombudsman's legal costs.
However, this is a death-in-service benefit case where the alleged non-remittance of contributions meant the expected lump sum could not be paid when a worker died because it was in arrears. In such situations, Kenny warned, the Ombudsman takes complaints very seriously.
This is especially the case where a firm found guilty of the complaints could be liable for a minimum standard mortality benefit of €63,500, and €3,150 for each dependent child, plus whatever contributions were missing. "So a payout of around €80,000 is not impossible," said Kenny.
He added: "In the circumstances I was happy to allow the case to be struck-out. However the nature of this case, involving as it does a death-in-service benefit, means that I will pursue my investigation vigorously."
If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email email@example.com