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Employment rights avoidance devices
[ch 4: pages 104-105]Changes in the UK labour market have resulted in the spread of many exploitative arrangements, often used in combination, aimed at avoiding employment rights and obligations and tax and National Insurance liabilities. These devices evolve in response to changes to laws and enforcement practices. Examples include:
• requiring workers to work for cash;
• false self-employment (see page 38);
• topping up wages above the NMW using “profit related pay”;
• topping up wages above the NMW using tips collected via a Tronc system;
• requiring workers to pay for their own branded uniform and equipment out of their wages;
• abusive use of zero and short hours contracts;
• abuse of rules over payment for travel time, standby rules, security checks and staff briefings;
• requiring low-paid workers to contract through a personal service company; and
• abusive use of intermediary companies, such as payroll and umbrella companies.
Directors held personally liable for exploitative pay and conditions
In an important new ruling, the high court has held that individual directors who deliberately fail to pay the National Minimum Wage, holiday pay and overtime and who withhold payments from workers knowing that they have no right to do so can be held personally liable for inducing a breach of the employment contract by the company that employs the workers.
The case involved a group of Lithuanian workers who were forced to work catching chickens in exploitative conditions. They worked extremely long hours, for well below the National Minimum Wage. Pay was often withheld unlawfully and no attempt was made to pay them holiday pay or overtime. The high court ruled that the directors were personally liable for the wages and other payments owed to these workers by their employer.
Antuzis and others v DJ Houghton Catching Services Limited and others [2019] EWHC 843