Business Fail To Pay Properly

 

DIY store B&Q and the fast food chain Five Guys are among hundreds of UK businesses named by the government for paying staff below the minimum wage. More than 600 employers were ordered to pay affected workers the outstanding wages, with £4m returned to workers, according to the Department for Business and Trade. The firms have also been issued penalties worth £7m. The list of 658 businesses includes shops, restaurants, nurseries, social care providers and a handful of NHS trusts. The period of underpayments covered by the list varies depending on the employer, but overall spans from 2013 to 2025. Minimum wage is £12.71 for staff aged 21 and over. For 18 to 20 year olds the rate is £10.85, and for under 18s and apprentices it is £8. B&Q underpaid 4,530 workers a total of more than £456,000, according to the government. The list marks the first "naming round" since the Fair Work Agency was set up in April under the Employment Rights Act. As well as enforcing the minimum wage, the agency also will soon tackle practices of denying workers holiday and sick pay.

BBQ - What is the impact for the businesses for this?

Minimum Wage

Morrisons Fined for Dirty Bakery

 

A dirty Morrisons bakery has left the supermarket with a £750,000 bill to pay. The chain was fined £737,000 - cut from £1.1 million because of an early plea - and costs of £11,221.38, as well as a £2,000 victim surcharge. It came after a routine inspection at its Cwmbran branch in August 2024 by Torfaen council environmental health officers uncovered multiple violations. Among these were poor cleanliness, dirty equipment, inadequate staff supervision and food safety management failures. They found 51 flaws in the store's food safety management, which bosses had known about for more than a month. The bakery was shut immediately for deep cleaning. Judge Sophie Toms told Newport Magistrates' Court on Thursday the case was not about a few rogue employees but that there were serious and systemic failures. She said Morrisons had risked customers' health and safety and perhaps put lives at risk.

BBQ - Other than the fine what cost will Morrisons face?

Morrisons Dirty Bakery

Dyson Settle Employment Lawsuit

 

Electronics appliance maker Dyson has agreed to settle a lawsuit filed against it by 24 migrant workers, who alleged they were subjected to forced and abusive treatment in a Malaysian factory making the firm's parts. The workers, from Nepal and Bangladesh, sued the firm in 2022 and described being subject to what amounted to modern day slavery. Dyson has denied any liability. When the case was brought it said it had been previously unaware of the alleged abuses, and the Malaysia supplier should be held responsible instead. The case is significant for establishing the precedent that allegations against foreign companies supplying British manufacturers can be judged in an English court. The workers described being threatened and beaten, having their passports withheld, and being forced to work long hours in unsanitary conditions. According to their lawyers, from Leigh Day, they were denied toilet breaks and forced to work "upwards of 12 hours at a time without relieving themselves". Under the terms of the settlement the details of any compensation to the workers are not being disclosed. They both also said the settlement was not an admission of liability on Dyson's part. The company had earlier argued that the case should be heard in Malaysia, not Britain. But the Supreme Court agreed that the trial could take place in an English court, setting a precedent that British companies can be held to account in the UK for actions taken by suppliers in another country.

BBQ - Should the Malaysian supplier or Dyson be held accountable for breaking Employment Law?

Dyson

NI Tax Rises To Hit Prices

Cosmetics company Lush and car repair chain Kwik Fit are among firms which have warned they will raise prices due to an increase in employers' National Insurance (NI). Other firms have told the BBC they will reduce how much profit they make, freeze hiring or in some cases cut jobs to cover the higher costs. From Sunday, employers will have to pay NI at 15% on salaries above £5,000, instead of 13.8% on salaries above £9,100 currently. The Treasury said the billions raised will be spent on public services, including the NHS. Lush told the BBC that with 3,600 employees in the UK and Ireland, it would have to find an extra £2.7m per year. Kasey Swithenbank, Lush's retail head for the UK and Ireland, said: "We are going to be taking small incremental price changes. Kwik Fit, which employs about 5,000 people, estimates the NICs rises will cost it £5m. This will have a knock-on effect on prices, and recruitment, said Mark Slade, its managing director.  The rate that employers pay in contributions will rise from 13.8% to 15% on a worker's earnings above £175 per week. The government expects about 940,000 firms to pay more, 250,000 companies to pay less, and 820,000 to see no change.

BBQ - How would you deal with the NI increase if you ran your own business?

NI Increase

 

Lidl Raises Pay Ahead of Minimum Wage

 

Lidl's recent announcement of a pay raise for its UK staff, pre-empting the national minimum wage increase, signals a significant move in the retail sector. As reported by the BBC, this £39 million investment translates to a 4% to 10% pay rise for 26,000 employees, exceeding the upcoming minimum wage. This proactive approach likely stems from a need to attract and retain talent in a competitive market, boost morale and productivity, and enhance the company's reputation. While the move is positive, it also raises questions about the ability of smaller businesses to follow suit, the potential for wider wage inflation, and the long-term sustainability of such practices. Ultimately, Lidl's decision sets a new benchmark for employee compensation and highlights the increasing pressure on businesses to address the cost of living crisis and value their workforce.

BBQ - Discuss the potential benefits and drawbacks for Lidl of implementing this pay rise, considering factors such as employee motivation, recruitment, and profitability.

Lidl Minimum Wage

Workers Rights Change

The UK government is introducing a major overhaul of workers’ rights through the Employment Rights Bill, which includes several significant changes aimed at benefiting millions of workers. Key reforms include granting sick pay from the first day of illness and allowing unpaid parental leave from the start of employment, removing the previous two-year qualifying period for unfair dismissal protections, and introducing a nine-month probation period. Additionally, the bill proposes making flexible working requests a right from day one of employment. These changes are designed to provide greater job security and flexibility for workers, reflecting the evolving nature of the workforce and the increasing demand for work-life balance. While business groups have generally welcomed the reforms, there are concerns about the practical implementation, particularly for smaller firms that may face challenges in adapting to the new regulations. The government emphasizes that these changes aim to strike a balance between being pro-worker and pro-business, ensuring that the UK remains an attractive place to work and do business.

BBQ: How might the introduction of immediate sick pay and parental leave from day one of employment affect small businesses and their approach to employee management?

Workers Rights