female baker
21st February 2017

Bakers Forced To Cough Up The Dough

Following on from our article regarding the government’s naming and shaming of companies failing to pay the National Minimum or Living Wage, as we said some of the discrepancies may well be administrative errors.

That has been highlighted by a new report regarding bakers who have very innocent and plausible explanations for having fallen below the NWM.  Brian O’Loughlin, managing director at Thomas’ Bakery in Dalton-on Furness said that his business was accused of underpaying £779.75 to nine workers because employees put £1 in for tea, coffee and biscuits each week. Meanwhile Tony Bain, general manager at Glover’s Bakery in Preston said the £11,320.33 which they were listed as having underpaid to two workers was as a result of the employees living in a subsidised flat above the bakery and had been deducted at the employees’ request.

Emma O’Leary is an employment law consultant for the ELAS Group. She says: “The purpose of the name and shame list is to expose those companies which are deliberately failing to pay the requisite hourly rate and are consciously trying to get away with paying less. However it seems the blanket approach which has been taken by HMRC is seriously damaging some small businesses who believe they are paying the correct wages but, due to various circumstances, on paper are found to be being less.  Of course when you read the plight of the baker who takes a weekly pound from employees for tea and coffee WITH their agreement, it seems absurd that common sense has not prevailed and this unfortunate baker has fallen foul of significant fines and been shamed as a so-called perpetrator of low wages.

“With that being said, the law is very black and white in this area which means that any deductions from employees wages, be it for rent or confectionery, must be taken in to account when calculating the national minimum or living wage.  Having robust safeguards and a vigilant payroll system should avoid this. Employers can appeal to HMRC within 28 days of receiving a penalty notice.  If there is no appeal or one is not successful, HMRC will consider the company for naming – unless the employer claims an exceptional criteria, such as a risk to national security.

“If, as in the case of Glover’s Bakery, an employer offers an employee subsidised housing as part of the job then they should check the accommodation offset rates set the Government, which would then avoid a finding that they have paid less than the national minimum or living wage.”


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