Nine North East firms are among a long list of companies which have been ‘named and shamed’ for failing to pay their staff the National Minimum and Living Wage.
The businesses are on the latest list published by the Department for Business, Energy and Industrial Strategy, highlighting 260 UK businesses who have been ordered to hand over £1.7m in back pay to staff members – on top of fines totalling £1.9m.
Retail, hairdressing and hospitality businesses were among the most prolific offenders with common reasons for errors made include failing to pay workers travelling between jobs, deducting money from pay for uniforms and not paying for overtime.
The list, which is published twice a year, includes retail giants Primark and Newcastle United owner Mike Ashley’s business Sports Direct.
Primark Stores Limited, headquartered in Reading failed to pay 9,735 of its workers £231,973.12, while Sports Direct is named and shamed for not paying 383 workers a collective £167,036.24.
Business Minister Margot James said: “There is no excuse for not paying staff the wages they’re entitled to and the government will come down hard on businesses that break the rules.”
The North East businesses listed are:
+ Ramside Estates Limited, County Durham DH1, failed to pay £17,536.59 to 8 workers.
+ Headlam Leisure Limited trading as Headlam Hall Hotel, County Durham DL2, failed to pay £9,157.42 to 8 workers.
+ Sabai Hairdressing Ltd., Newcastle upon Tyne NE1, failed to pay £8,144.38 to 6 workers.
+ Cuba Lily (North East) Limited, County Durham DH1, failed to pay £7,917.09 to 26 workers.
+ Cornhill Carriage Company, Northumberland TD12, failed to pay £4,974.26 to 1 worker.
+ Hughes & Daughters Care Ltd trading as Blue Ribbon Community Care Tyne and Wear, Sunderland SR2, failed to pay £2,789.06 to 22 workers.
+ Mrs Andrea McKie trading as Angels Assisted Living Services, Northumberland NE42, failed to pay £772.45 to 1 worker.
+ Inspired Care Limited, Newcastle upon Tyne NE15, failed to pay £220.00 to 1 worker.
+ TAAE Management Ltd trading as Bluebird Care Sunderland, Sunderland SR1, failed to pay £131.42 to 1 worker.
All the North East firms listed were contacted for comment.
Ramside Estates and Headlam Leisure Limited both said they felt their sector is being particularly targeted.
A spokesman for Ramside Estates said: “Ramside Estates has been in business for 54 years and is one of the longest standing hospitality businesses in the North East.
“We have always paid our staff the minimum wage and above and unfortunately this particular situation arose because of an issue with the clocking in machine, where chefs who were on split shifts – with a four hour break in the middle of the day – appeared as if they were working through for 12 hours.
“Because of that it seemed as if their hourly rate was below the minimum wage, which in reality was not the case. We pointed this out to the inspectors but they did not accept our explanation.
“To ensure this situation does not arise again, our contracts of employment now allow people who work more than a 48 hour week to be reimbursed, although this is challenging for the hospitality industry where long hours have always been the norm.
“It does seem that the hospitality industry is being particularly targeted and that we are being made a scapegoat in this instance.”
David Jackson, operations director at Headlam Hall, said: “In response to the recent fine imposed on Headlam Hall by HMRC’s Inspector for a limited “breach” of EU minimum wage regulations in the case of a number of French students, we are, of course, sorry to have broken the letter of the law. However, we feel very aggrieved, and are very disappointed with HMRC about this ruling and the fine imposed, given that this so-called breach only related to a group of French hospitality students who were on placement at Headlam Hall for three months at a time to improve their skills and language, and explicitly did not expect to be paid other than “board and lodging”.
“Our arrangement with the College in Limoges was based on the director saying that the students were not to be paid, and did not expect to be paid, for this placement work, other than our provision of “board and lodging” for them.
“A further irony is that it seems that if they had been British students from a British college, this would not have been a breach of the law in any way! It is clear on the HMRC website that “a student doing work experience as part of a higher or further education course” will not receive the National Minimum Wage”.
“We have a policy of paying all our employees here at Headlam above the minimum wage. We also have a strong history of UK and overseas students learning and honing their professional hospitality skills here. As one of the area’s main employers for over 30 years, it is a shame that over £15,000 (the level of the fine) which could have been spent on re-investment at the hotel or job creation for local residents, has disappeared on a legal nicety to do with European workers”.
“We fully understand our obligations to our staff and the wider community, and, as a good employer, continue to comply fully with legislation in areas of food hygiene, health and safety, and other major areas of hotel operations. With the hotel having been awarded four stars from the AA and a TripAdvisor Certificate of Excellence, and also being rated Taste Durham Highest Quality Assured and Local Champion by our regional tourist board, Visit County Durham, we are pleased to continue to contribute positively to the local community and the wider north east economy”.
Cuba Lily (North East) Ltd:
Michael Lewis, managing director of jewellery business Cuba Lily (North East) Ltd, said: “We have been caught out with a technicality of how staff purchases have been processed. I feel strongly aggrieved by HMRC who conveniently received a hefty fine from my company. Cuba Lily should not be registered on this list of companies.”
Tracy Notley, director at Inspired Care, said: “This was a one-off administrative error. We pay above the minimum wage across the company.”
Thomas Chacko, owner of Bluebird Care, said that he disagreed with HMRC’s decision and that the dispute related to money he had deducted from a former member of staff’s pay for training received at the company.
Mr Chacko said: “The reason why was that staff member received all of their development and training and investment, and then deceided to leave the business without notice and without returning company property. Leaving us in the lurch. I said I was allowed to deduct a small amount of money because of that.”
“We continue to support our customers and staff and we continue to invest in them.”
Blue Ribbon Community Care:
A spokesman for Blue Ribbon Community Care said: “Our rate of pay has always been in excess of national minimum wage.
“This issue with HMRC arose due to deductions for training costs from those with whom we parted company within 12 months of their employment.
“Deductions were therefore made from leavers for the cost of some of the training they had received.
“The third party payroll provider had advised that this was both legal and appropriate. All new staff were made aware of and agreed to these deductions. However, HMRC ruled that these charges were not allowed. As soon as they advised us of this, the required reimbursements were made to those affected.
Newcastle hair salon Sabai Hairdressing declined to comment, as did Cornhill Carriage Company and Angels Assisted Living Services did not return our calls.