Midcounties Co-op has paid £14,000 ($18,162) to Rodney Sharpe, one of its employees, over breaching the minimum wage laws. This is said to be the highest single payout made by any UK company till date in this regard.
Sharpe, a 64-year old newspaper delivery staff was underpaid for four years. He is said to have been paid £3.15 an hour, which is almost half of the £7.20 mandatory national living wage.
Apart from Sharpe, the UK's biggest independent co-op has also issued a payout of more than £4,000 to Roger Lilley, another delivery worker over missing wages and expenses. This worker, aged 66 had claimed to have earned as low as £0.69 per hour on few days.
These two newspaper deliverymen had complained separately about the low pay to the HM Revenue and Customs (HMRC), a non-ministerial UK government department responsible for the administration of the national minimum wage. The payouts by the co-op come after the HMRC decided to pursue these complaints.
A spokesperson for the UK government's Department for Business, Energy and Industrial Strategy, which oversees the minimum wage, said: "We are clear that when employers do not comply with the law, they will be found out and punished, and we would encourage any worker who's concerned to contact Acas. Every complaint received is fully investigated by HMRC."
The co-op went is now looking at 200 other possible cases of illegal low wages. All of them are workers that used to deliver papers and magazines from its stores. These people have been asked by the co-op to come forward as they may have also been paid below the minimum national wage.
Midcounties Co-op admitted to its mistake. Ben Reid, the chief executive at the co-op was quoted by the Guardian as, "We would like to apologise to any past or present colleagues affected."
Reid explained that the mishap was "a result of the way we previously structured this function of our retail operation and pre-dates our move to central payroll and hourly rates for delivery colleagues." He added that co-op had made a few changes after these complaints. "After their case was escalated to our senior management team we thoroughly reviewed the employment and remuneration structure for newspaper delivery. All of our delivery colleagues were registered on our central payroll in 2015 and have been receiving hourly pay since January this year," he said.