The Midcounties Co-operative is examining whether 200 workers have been paid below minimum wage. The co-op is asking former employees – who delivered papers and magazines – to come forward because they may have been underpaid.
The society recently made a £14,000 payment to a delivery man after an internal review overseen by an HMRC Treasury low-pay inspector. The HMRC pursued two complaints made by newspaper delivery men, Rodney Sharpe (64) and Roger Lilley (66), who said they had been underpaid.
Mr Sharpe, who suffers from diabetes and uses a walking stick, told the Guardian newspaper he ended up earning £3.15 an hour. The Midcounties Co-operative has paid Mr Sharpe £14,000 for four years of underpayment.
Another delivery man, Roger Lilley, estimated he had received 69p an hour on some days for delivering papers, due to the fact that the co-op was not taking into account the waiting time and car expenses involved. The Midcounties Co-operative has agreed to pay Mr Lilley £4,000 for missing wages and expenses.
The minimum wage is calculated at an hourly rate but it applies to all eligible workers, even if they are not paid by the hour. Working time includes time spent at work, waiting to collect goods and travelling in connection with work.
Ben Reid, chief executive of Midcounties, confirmed that current delivery employees are being paid hourly.
He said in a statement: “We are grateful to Mr Sharpe and Mr Lilley for bringing this matter to our attention. 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. We are calculating back pay that current colleagues may be entitled to and have placed notices in all of our stores asking for people employed at any time over the last four years to come forward so we can assess any historical payments that they may be due for their deliveries.
“HMRC has agreed a new methodology for calculating the time involved in completing delivery rounds and this now forms the basis of the hourly payment received by our colleagues.
“Our colleagues are also asked to confirm if they have any health issues that we may need to take into account to enable us to make reasonable adjustments to their rounds and the times involved.
“The issue that Mr Sharpe and Mr Lilley raised with us was as 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. We would like to apologise to any past or present colleagues affected.”