Liberal Democrat Business Minister Jo Swinson MP identified Glasgow pub chain G1 as the worst of 48 offenders who have been outed by Department for Business, Innovation & Skills (BIS) for failing to pay their employees in line with the national minimum wage.
The announcement was part of a high profile naming-and-shaming of habitual transgressors. The amounts in question ranged from £130.28 underpaid by a Chesterfield electrical retail firm to G1’s staggering £45,124.00 underpaid to 2,895 workers.
The scale of the abuse was unearthed by the HMRC during an investigation, although details of the tactics used by the employers to avoid paying the NMW were not disclosed.
What the publication does is highlight the kinds of workers most likely to be taken advantage of by their boss when it comes to being paid the NMW: unsurprisingly, employers with female-dominated workforces such as hair and beauty salons, and nurseries are reoccurring features on the list; industries such as the hospitality trade with little or no Trade Union saturation also dominate the list.
The effect of the public shaming on the individual companies, and in particular G1, will most likely be limited however: compliance with statutory employment law obligations probably doesn’t rank particularly high up the list of factors Glasgow nightclub goers will factor into deciding their weekend’s entertainment plans and the industry is no stranger to adverse publicity and controversy.
On a cynical level, the move probably has more to do with next month’s General Election: recent polling shows Swinson is likely to lose her Dunbartonshire East seat to the Scottish National Party; today’s announcement may be an attempt by Swinson to distinguish herself from the ultra-probusiness attitude of the coalition government that Scottish voters seem likely to declare themselves deeply suspicious of.
Indeed, the overall value of the underpayments on the list comes to £162,000; a fraction of the £533m a 2013 study for Newham Council estimated is underpaid to workers every year.
What is needed more than a name-and-shame campaign is more aggressive enforcement of NMW breaches, stricter penalties for transgressors and the extension of criminal liability for breaches beyond the company to individual directors.
The introduction of tribunal fees by the coalition in 2013 priced many low paid workers out of their right to seek a judicial remedy for breaches of their employment rights and by definition, these are the workers most likely to suffer abuses of the NMW regulations. The government should urgently consider the issue of exempting NMW claims from tribunal fees in order to combat what is becoming an increasing social problem.
The nature of the industries represented on the list should also provide an incentive for workers in those industries to begin thinking collectively; strength can be found in numbers and the absence of any trade or industry with high levels of Trade Union saturation on the list clearly demonstrate the benefits of finding strength in numbers.
