The Pensions Authority is investigating whether the owner of one of the UK’s oldest social enterprises fraudulently failed to pay pension contributions to disabled workers.
The 168-year-old soap maker Clarity was bought by the administration in 2020.
Workers say they’ve lost their jobs and still owe severance pay, holiday pay and wages.
The owner, Nicholas Marks, said he looks forward to “clarifying the position” with the regulator.
Olgun “Ozzie” Ibrahim caught Covid a week before Christmas 2020. When he recovered he was told not to come back to work. He was put on furlough in January and received two months’ holiday pay, but no more – no pension payments and no notice or dismissal when he finally lost his job in July.
Registered blind, he had worked for 29 years at Clarity & Co, a social enterprise that had provided employment for blind and disabled people since 1854 and manufactured toiletries under the Clarity, Soap Co. and Beco brands.
The company, whose patrons ranged from Queen Victoria to Joanna Lumley, lost money and went into administration in January 2020.
On the same day, the company and its assets were bought by a businessman, Nicholas Marks, who is now accused of failing to pay workers’ wages and pensions.
Clarity employed about 80 people at the time of the sale, 65 of whom were blind, disabled or had medical conditions.
It was more than a job, says Mr. Ibrahim, it was also like a family.
Since he left, he and his colleagues have struggled to find work. “No one wants to employ disabled, blind people,” he says. “Even though we can get the job done, nobody wants to take the risk.”
The BBC has also spoken to a number of former Clarity employees who say pension contributions have been deducted from their pay packages but never paid to pension provider Scottish Widows.
Among them is former team leader Allan Brooks, who worked at the company for 17 years. Registered blindly, he says he also received no vacation pay or layoff.
When he heard he was going to lose his job, “it was a huge shock,” he says. “I expected to spend my working days in the company.”
He is now on medication for depression and has not worked since leaving. Some of his former colleagues also suffer from mental health problems, says Mr. Ibrahim.
The BBC has learned that The Pensions Regulator has launched an investigation into Nicholas Marks for alleged fraudulent circumvention of the obligation to pass pension contributions to an occupational pension scheme under the Pensions Act 1995. The pension supervisory authority would neither confirm nor deny the investigation.
The UK Labor Court’s website also lists judgments in favor of over 40 people who won lawsuits alleging unauthorized deductions of wages and other monies owed to workers by Clarity Products (the new name of the company owned by Mr Marks).
The BBC spoke to seven of them, who say they have not been paid the money awarded by the court.
Clarity Products – renamed Jublee Number 7 Ltd – is now going into liquidation. Documents from insolvency practitioner Quantuma, seen by the BBC, show the company owed more than £435,626 to 84 employees including Mr Ibrahim and Mr Brooks.
Scottish Widows are owed £37,068 and NEST Pensions £15,494. The company’s total debt was in excess of £1.3m.
Local MP Sir Iain Duncan Smith wrote to Minister Jesse Norman in November 2020 to highlight the case, but HMRC is unable to confirm or deny whether it has opened an inquiry. Jublee Number 7 owes £231,839 to HMRC, bankruptcy documents show.
In a statement, Mr Marks told the BBC: “I understand that the regulator has asked some technical questions about the provision of certain documents. Although I was not involved in the details, much if not all of this has been affected by the pandemic which has resulted in our offices being unmanned, correspondence being lost and the staff responsible for providing this information left.”
He also said he has personally lost around £500,000 and therefore “any suggestion that I have withdrawn money is both absurd and patently wrong”.
He said: “During this chaotic time [following the sale, and during the pandemic] Some people didn’t get paid. I’m sorry this happened, but some workers have been TUPE’d [transferred] from offices that no longer existed and no longer played a role. It’s not an apology, but I’m trying to explain how we inherited a complete mess.”
“For me, my biggest regret is that I was unable to save the business and jobs, but unforeseen events conspired to make it an impossible task,” the statement continued.
Mr Marks did not comment on whether he would repay any of the workers who are still owed money.
Little is known about Nicholas Marks. Born in 1967, he describes himself in Companies House as British, although he also has ties to South Africa.
In 2019 he bought out of administration a company in Lancashire called Lunar Caravans. Workers there have also complained about unpaid vacation pay.
Nicholas Marks has been banned from serving as a company director for one year from 3 August 2020 for breaches at another company, Stafferton Waste, which has since been wound up.
According to official notices published in the London Gazette, he was the subject of bankruptcy orders in 2007 and 2017.
Following reports in BBC News and elsewhere about the plight of former Clarity employees, Nicholas Marks has sued two people for allegedly spreading false information about the company.
They were Camilla Marcus-Dew, Clarity’s former head of commerce, and Cemal Ezel, a social entrepreneur who unsuccessfully offered to buy Clarity out of administration in 2020.
The couple – who deny Mr Marks’ allegations – were initially forced to represent themselves without legal counsel. They are now represented on a voluntary basis by two law firms, Quinn Emanuel for Ms. Marcus-Dew and Hausfeld for Mr. Ezel.
Separately, on January 27, Ms Marcus-Dew was awarded £38,491 by an employment tribunal for effectively dismissing Clarity, in addition to £11,000 previously awarded for unpaid wages (she has received nothing, she says).
Mr Ezel said the ongoing legal battle has forced him to scale back plans to expand his social enterprise Change Please, a coffee company that provides opportunities and training for the homeless.
Social Enterprise UK has launched a crowdfunding campaign to support ex-workers and advocate for policy changes to prevent similar situations from happening in the future.
Nest Pensions, Scottish Widows and Quantuma all declined to comment.
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