Pension Contributions Missing for Morton’s Rolls Employees

Taxpayer money will be utilized to address the deficit in the pension scheme linked to Morton’s Rolls Ltd., a bakery company that declared bankruptcy in 2023.

Former staff members of Morton’s, known for its popular morning rolls in western Scotland, have raised concerns about their employer’s failure to contribute to the pension scheme as the company moves towards liquidation. This comes despite pension deductions being made from their salaries. Reports have shown discrepancies in pension payments that span up to a year.

A spokesperson from the UK Insolvency Service informed BBC Scotland News that national insurance funds would cover the missing contributions.

Nancy Dunachie, aged 65, whose late husband worked at Morton’s, expressed her frustration to BBC Scotland: “He often referred to them as a ‘shower of thugs’.”

As Nancy sifts through letters from her husband’s pension provider, the repetitive headings—“Payments under Pension Plans”—detail issues between 2020 and 2023. One letter from Standard Life indicates that her husband, William Dunachie, should have received payment, but no recent payments were acknowledged.

She illustrates her point by showing a paystub from that same period, which clearly shows deductions made for his pension. “He kept receiving letters stating his pension wasn’t being paid, but money was taken from his paycheck. It’s puzzling; he asked others at work about it too,” she shared. “So, where is that money going?”

William Dunachie, who passed away from a heart attack last October while waiting for redundancy payments, had worked at Morton’s for over three decades. Nancy pointed out checks totaling more than £13,000 related to his redundancy, but they remain inaccessible as they’re under her husband’s name. The pension deductions from Morton’s continue to weigh heavily on her mind.

The BBC reached out to former employees of Morton’s, who voiced similar concerns regarding overdue pension payments. They claimed that deductions were being made from their pay, yet the pension contributions were not forwarded to Standard Life. Alan Love, another former employee who worked at Morton’s for 32 years, shared a payment statement indicating several gaps in pension contributions.

“You tell me where my pension payments went, because it’s deducted from my wages weekly,” he said. “I had no issues at first until things started going wrong, and suddenly, I find myself with an incomplete plan.” He had approached the Pensions Regulator concerning these issues prior to the bankruptcy, emphasizing, “It’s about getting these payments back. If the company goes under, I will make a comeback on this.”

According to reports, the Drumchapel-based bakery, well-known for its crispy morning rolls, faced financial challenges leading to 230 employees being made redundant before officially going bankrupt. A month later, approximately 110 workers were rehired as a new company, Phoenix Bolt Limited, took over its assets, including some who were previously in leadership positions at Morton’s.

A two-year legal battle followed, with a group of 98 employees claiming payments from the UK government’s Redundancy Service since the company was in liquidation. Normally, workers might secure severance pay, but the government contended that the employees weren’t entitled, as their jobs were considered safe with the new ownership.

Recently, an employment tribunal ruled in favor of the workers, declaring they were entitled to payment since the company was already in liquidation when the transfer happened. The Redundancy Service will now issue these payments from the National Insurance Fund.

Paul Kissen from Thompsons Solicitors, who represents the claimants, anticipates that his clients could collectively receive around £500,000 in severance pay. He acknowledged that the government’s arguments held some merit, yet the lengthy wait for resolution has been unsatisfactory. “There should be a way to expedite the process, as there are so many people involved,” he remarked.

A spokesperson from Standard Life explained that there’s a designated process for dealing with delinquent pension contributions, triggered by litigation related to Morton’s bankruptcy. Employers are supposed to pay outstanding contributions by a specific date, which initiates a contribution monitoring procedure by pension providers. If any payments remain overdue, the Pensions Regulator is notified, allowing for enforcement actions against the employer.

In 2023, administrators were assigned to manage Morton’s Rolls, and they confirmed they’re applying to the Redundancy Service to settle unpaid pension contributions from the previous year, enabling employees to recover any contributions deducted from their pay yet not deposited in their pensions.

An Insolvency Service spokesperson stated they have chosen not to appeal the tribunal’s decision and confirmed that pension payments to the affected workers are currently in process.