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Home Grown Hotels fights back against minimum wage naming and shaming

31 December 2020 by
Home Grown Hotels fights back against minimum wage naming and shaming

Home Grown Hotels has pulled into question the language used by the National Minimum Wage Naming Scheme after being brandished as a "rogue employer" for underpaying employees alongside 138 other UK businesses.

Home Grown Hotels is among a number of hospitality operators and wider UK businesses to feature on a government list of companies who have underpaid some employees between 2016 and 2018. The 139-strong list, ranging from small businesses to large multinationals – including the likes of Tesco, Müller and Superdrug – failed to pay £6.7m to over 95,000 workers in total.

The Department for Business, Energy and Industrial Strategy (BEIS) included Home Grown Hotels on the list, stating the hotel group was fined due to the failure to pay £13,790.44 to 25 workers. This is the first time the list has been released since 2018, following "reforms to the process to ensure only the worst offenders are targeted".

Breaches to minimum wage payments often arise due to low-paid employees being forced to cover work costs, such as paying for uniform, training or parking fees. In the case of Home Grown Hotels, this included accommodation costs.

Despite putting its case across to the National Minimum Wage team, Home Grown Hotels claims it was ignored. The group is countering the claims, saying it is "unjust for them to be named for what they regard as inadvertent breaches of very complex regulations, particularly as they are named alongside employers who have deliberately flouted the rules and the distinction between the different types of breach is not obvious to the public".

Home Grown Hotels confirmed to The Caterer that its internal National Minimum Wage audit in 2016 highlighted a "technical breach on staff accommodation and uniform deposits".

"The discrepancy came as a result of the inconsistent hours worked, something that typifies the hospitality industry. This technical breach materialised because Home Grown Hotels was offering company subsidised housing (unavailable on the open market) to the group's lowest paid members of staff. The financial shortfall to staff was something HGH was already in the process of correcting when the audit took place."

The group said it has since put in place a "refreshed system" where proposed accommodation charges are now based on employees' salaries and fit with HMRC guidelines. Uniform deposits are now also spread over consecutive months so an employee's salary never falls below the national minimum wage. The hotel group was fined £6,000 by the government, which is has paid in full.

"HMRC guidelines relating to this element are complicated. The hospitality industry is not as straightforward as other businesses due to inconsistent hours worked from one month to the next.

"Over the period in question (2013 to 2016) Home Grown Hotels' payroll was approximately £20m. With such significant outgoings no company would deliberately seek to make savings of £4,000 per annum by underpaying staff."

The hotel group also hit out against what it calls defamatory and provocative language used by the National Minimum Wage on the list published on BEIS today and cited the high level of philanthropy undertaken by the business.

Pizza Hut UK was also fined by the government after failing to pay 10,980 workers a total of £845,936.41. The restaurant group said it was made aware of an error relating to a historic uniform policy.

A spokesperson for Pizza Hut Restaurants said: "We take our commitments as a responsible, award-winning employer extremely seriously, including paying our team members at or above national minimum wage. Several years ago, along with many other businesses in the sector, HMRC made us aware of an error relating to a historic uniform policy. In 2018 we completed a wage adjustment for current and former employees working closely with the HMRC to understand who was eligible.

"It is important to stress that there was never any intent to underpay our employees, we are advocates of the principles that underpin minimum wage and we are confident that the necessary processes have been fixed to ensure that this will not happen again."

Other hospitality businesses on the list include the Lowry hotel in Manchester, which failed to pay £63,431.51 to 99 workers, the Bridge Hotel & Spa in Harrogate, which failed to pay £11,947.23 to 26 employees, and Byron Burgers, which failed to pay £3,062.03 to 77 workers.

Byron Burgers' chief executive Simon Wilkinson commented: "We understand this was from a HMRC audit a couple of years ago and was regarding trial shifts, which were standard practice in the hospitality industry at the time. We can't comment further as Byron is under new ownership and has a new management team who weren't employed at the time this took place. We do know this could not happen today."

Businesses who featured on the list have since paid their employees arrears at the current minimum wage rates. They have also been forced to pay a fine to the government that could be up to 200% of arrears, capped at £10,000 per employee. The fines have not been published in the document released today.

The business minister, Paul Scully, said the list should serve as a "wake-up call" to employers. "Paying the minimum wage is not optional, it is the law. It is never acceptable for any employer to short-change their workers, but it is especially disappointing to see huge household names who absolutely should know better on this list," he said. "Make no mistake, those who fail to follow minimum wage rules will be caught out and made to pay up."

Photo: Shutterstock

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