A hotel group controlled by the multi-billionaire tax exile Sir James Ratcliffe has been fined by the government along with 138 other “rogue employers” who failed to pay their staff the national minimum wage.
Ratcliffe, who has an estimated £12bn fortune, owns 55% of Home Grown Hotels, a boutique group he co-founded with Robin Hutson, a hotelier who built and sold the Hotel du Vin chain and is a former chairman of the members’ club Soho House.
Their business was included in a list of national minimum wage offenders published by the Department for Business, Energy and Industrial Strategy (BEIS) on Thursday, as the department reintroduced a policy of “naming and shaming” companies that had paid staff illegally low wages.
Also cited in BEIS’s first list for two years was the UK’s largest private sector employer Tesco – an announcement that coincided with its former chief executive Dave Lewis being knighted in the New Year’s honours list – and the restaurant chain Pizza Hut.
The business minister, Paul Scully, said: “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.”
The latest roll call of offenders – which showed that the 139 named companies failed to pay a total of £6.7m to more than 95,000 workers – covers investigations between September 2016 and July 2018, a period when minimum wage compliance was prominent news following an undercover Guardian investigation that exposed how workers at Sports Direct were being paid below the legal minimum.
Ratcliffe made his fortune in the petrochemicals industry by founding Ineos and has become a well-known, if sometimes controversial, figure in the business world.
He first came to public attention after threatening to close his Grangemouth petrochemicals factory in 2013 and prompting a dramatic climbdown by the Unite trade union – but has since made headlines by quitting Britain for tax-free Monaco, becoming a prominent Brexit supporter and taking over cycling’s Team Sky and rebranding it to Team Ineos.
BEIS stated that Ratcliffe’s Home Grown Hotels had failed to pay £13,790 to 25 workers, which the company said related to “inadvertent breaches of very complex regulations” following “deductions made for staff accommodation and uniform deposits”.
A spokeswoman for the company said that the company had reimbursed staff, had been fined £6,000 by HMRC and that Ratcliffe “has no involvement in the day-to-day running of the company”.
She added: “[Co-founder] Robin Hutson was entirely satisfied with the swift approach taken by the company’s accounts and HR teams and sympathetic about how such a mistake could have arisen with the ever-changing hours worked by employees within the hospitality sector. 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.”
A spokeswoman for Tesco, which BEIS said had underpaid 78,199 workers a total of £5.1m, said: “Back in 2017 we identified a technical issue that meant some colleagues’ pay inadvertently fell below the national minimum wage. We are very sorry this happened and proactively reported the issue to HMRC at the time. All our colleagues were reimbursed in full and we immediately changed our policies to prevent this happening again. In most cases the reimbursement was £10 or less. Once we uncovered this mistake, we took a proactive, transparent and cooperative approach with HMRC.”
A spokeswoman for Pizza Hut, which underpaid 10,980 workers £846,000, also said the breach was unintentional and that staff had been reimbursed.
Tesco and Pizza Hut both refused to reveal how much they had been fined.
Jeni Morris, head of the national minimum wage team at accountants EY, added: “In my experience, most employers do not deliberately flout the NMW rules, but are inadvertently caught out by a number of technicalities in the complex legislation.”