Director disqualified for repeatedly failing to pay minimum wage

A director has been banned for seven years after repeatedly failing to pay his workers the minimum wage.

Shakil Ahmed was a director at Euro Contracts Services Limited (ECS), which supplied labourers to farms.

The farms paid a fee to ECS, which was then responsible for paying the labourers.

An investigation by HMRC in 2009 found that ECS paid the correct remuneration to the labourers but then deducted the costs of transporting them to the farm. This meant their pay packets were below the national minimum wage. In total, they lost nearly £69,000 between them.

Mr Ahmed corrected the payment, but two years later HMRC conducted another investigation and found that ECS had underpaid 246 employees more than £110,000 between August 2010 and January 2011.

This time ECS didn’t correct the payment and entered Creditors Voluntary Liquidation, leaving the workers out of pocket.

Mr Ahmed admitted that he had failed to ensure that ECS complied with its obligations to its employees and was disqualified for seven years.

It means that without specific permission of a court, he cannot act as a director of a company, take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership or be a receiver of a company’s property.

Please contact Sorcha Monaghan for more information about the issues raised in this article or any aspect of employment and company law.