Midcounties Co-op

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...delivering the national minimum wage

Midcounties Co-op, the UK’s biggest independent co-op, has reportedly paid an employee an astonishing £14,000 after breaching low pay laws and underpaying them for a staggering 4 years.

With an estimated turnover of £1.5billion in 2015, Midcounties Co-op has revealed that 200 others might also be in line to be compensated, as part of their investigations into minimum wage breaches.

Our Deana Bates, solicitor in Employment Law, digs deeper into in the case.  

The employee in question – a newspaper delivery man – wasn’t the only member of staff who was remunerated by the Co-op. Another delivery worker, Roger Lilley – aged 66 – has also been paid more than £4,000 in missing wages, after claiming that he earned a pittance of 69p an hour on some of the days he worked.

He was also working for 7 days a week, which the Co-op openly accepted was a breach or working time regulations.

Settling old debts

The payouts were made after 2 deliverymen complained to the HMRC about their rates of pay. After the allegations were proven true, Midcounties Co-op is now considering whether further payments need to be made to up to 200 other newspaper delivery workers who might have also missed out on their legal entitlement.

Workers who used to deliver newspapers and magazines from the company’s 234 stores who are also believed to have been underpaid have been asked to come forward too. Ben Reid, chief executive of Midcounties Co-op has commented that the company is “calculating back pay that current colleagues may be entitled to and have placed notices in all of our stores asking for people employed at any time over the last four years to come forward so we can assess any historical payments that may be due.”

Surviving on 69p

Aged 64 and suffering from diabetes, Rodney Sharpe – one of the Co-op’s deliverymen – used to deliver newspapers in Maidenhead, Berkshire, with the help of his walking stick. Instead of being paid the national minimum wage for his duties – which currently stands at £7.20 – Rodney, who was known as a reliable worker, was earning as little as £3.15 an hour and continued being underpaid for 4 years.

“I never made a fuss because I was worried that they might say: ‘If you don’t like it, leave'”, says Rodney. “I think a lot of people are reluctant to battle because employers will say that. I needed the job to pay my bills.”

When discussing his 69p wage in a letter seen by the Guardian, Roger Lilley commented “I have not been treated reasonably or fairly. I accept that no one from management would knowingly try to employ an adult on 69p an hour and that this is a legacy issue related to pay and conditions more appropriate for schoolchildren doing short local paper rounds before school.”

Rather than admitting to their error, the Co-op initially rejected claims that they failed to pay at least the minimum wage and that Roger’s round should have taken him around 90 minutes. They also suggested that Roger should do part of his rounds on foot. Describing these claims as “laughable”, Roger revealed that the co-cop was ignoring his petrol expenses – costing him £57 a week on average – as well as the hefty 68kg stack of papers that he’d have to try and carry along.

The chief executive of Midcounties Co-op, Ben Reid, has offered an apology to past or present workers affected. Around 9,000 people are employed by the Co-op, which runs food stored, pharmacies, funeral parlours, and travel agents across the UK.

Fighting for working rights

This is, of course, the latest in a series of employment-related scandals involving the likes of Sports Direct failing to pay workers at least the national minimum wage.

Commenting on the sad state of affairs, the Department for Business, Energy and Industrial Strategy said: “We are clear that when employers do not comply with the law, they will be found out and punished, and we would encourage any worker who’s concerned to contact Acas. Every complaint received is fully investigated by the HMRC.”

Midcounties Co-op isn’t the only employer currently on the HMRC’s radar – self-employed couriers for the delivery company Hermes and taxi drivers for Uber are locked in legal battles with their employers over working rights and pay.

Deana comments:

“There’s been a number of cases in the news over the past few months involving employers failing to pay their staff the national minimum wage, which is deeply unsettling!”

“Employers need to make sure that they have rigorous and frequent checks on their staff’s salaries to prevent them from being underpaid. The fact that one of the Co-op’s employees was earning 69p an hour on some days is disgraceful and it’s even worse that this has gone unnoticed for so long.”

We work with a lot of employers – of all sizes – and regularly advise them on issues relating to pay. If you’re concerned that your organisation might not be following the right pay review procedures or you just need some help when reviewing your business’ pay practices, in order to calculate whether you are meeting the national minimum wage requirements, we can give you the guidance that you need. Ignorance on the issue of the national minimum wage and your employees’ rights could prove costly.”

“Employees who are concerned about their rates of pay should also consider getting legal advice too. It’s understandable that Rodney was scared about coming forward and losing his job, but the law is there to protect employees’ rights. If your employer is in the wrong, then you shouldn’t have to pay the price for their mistakes.”

Written by Deana Bates.

For more information on employment law and the services offered by Simpson Millar, please call:

0808 129 3304

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