Paying a fair wage

Fail to pay properly? It's you who will pay the price.

Recently, the former director of an employment agency was forced to pay a large fine and was banned from being a director for 5 years. The reason? He withheld wages owed to two workers – and failed to give them sufficient information.

Have you ever considered holding back the wages of an employee? Maybe you’ve been unhappy with the standard of their work? Perhaps you’ve felt their behaviour in the workplace has been disruptive? For whatever reason, you might have felt justified in not paying them their full wage. If this has ever happened to you, be very careful. You will almost certainly be breaking the law, as Nicholas Brown recently discovered … to his cost.

The prosecution arose following a worker complaint which was referred to the Employment Agency Standards Inspectorate, a government body that enforces rights on behalf of agency workers. The Inspectorate launched an investigation.

Mr. Brown had been the director of a Bristol employment agency, national Recruitment Ltd, trading as Cotterrell and Gifford. He had failed to pay two of the company’s workers for work they had carried out in December 2015 and February 2016. The sums owed were £2,300 to Peter Stevenson and £2,200 to Rabindra Rana. Just a few weeks ago, a Bristol court found that Mr. Brown must pay compensation to the two workers. On top of this, the court fined him a total of £5,154 in expenses. The court banned him from holding a directorship for five years.

In all, there were four charges laid against Mr. Brown and he pleaded guilty to all four, which included withholding wages and failing to give information to workers when they started their employment.

Kelly Tolhurst, the government’s Small Business Minister, commented,
“Workers deserve to be paid for the work they do. We take complaints from workers seriously and will take action against employers that wilfully ignores the law and exploits workers.

We’re going further to enhance and protect the rights of all workers. In our Good Work plan we have set out new plans to make agency workers more aware of their rights and give them the right to request a more predictable contract.”

The Good Work plan has provided the platform on which the government intends to deliver its commitment to:

– provide every one of the UK’s 1.2 million agency workers with a precise breakdown of who should pay them and of all charges or costs deducted from their wages

– consider repealing laws permitting agencies to employ staff on cheap rates

– enforce vulnerable workers’ sick pay and holiday pay

– provide workers with a list of their rights, including sick and holiday pay

– introduce a right for all workers to ask for a stable contract, providing improved financial security for those on flexible contracts

– bring in a new naming scheme for employers who fail to pay employment tribunal awards

– quadruple employment tribunal fines for employers showing spite, malice, or gross oversight – leading to fines of around £20,000.

– consider increasing penalties for employers who have previously lost similar cases

So, the lesson is clear. Pay your workers fairly and, at the start of their employment, make sure you give them all the information they need.

If in any doubt, do get in touch.

When in any doubt about how much to pay your workers, speak to our financial experts here at Most Money.

What if consultation doesn’t work?

Of course, the preferable route the desired outcome is through consultation, followed by agreement. You would hold consultation talks with the employee, in which you’d explain the proposed change, following which they would agree to the new terms. But of course, things don’t always go that smoothly. What if the employee still refuses to consent to the proposed changes? What avenues are left to you to explore?

One option is to proceed with dismissal on notice, before re-engaging the employee on the new terms. But take care. Although this route may be successful, it’s fraught with potential pitfalls. Fail to follow the correct procedure and a future tribunal will not kindly upon your case. These are the steps to take –

We’re here to help.


This legal information is not the same as legal advice and you may not rely on our post as a recommendation of any particular legal understanding. Please, consult an attorney if you’d like to get advice on your interpretation of this article.

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