Living Wages are Paid

Why tackle the issue of wages?

Business case and what can go wrong

Reputational damage

In July 2006, Sky News ran a story exposing under-payment of workers at a Kent strawberry farm supplying Marks & Spencer and Sainsbury’s.

The undercover investigation claimed that piece-rate workers from Poland, Latvia and other countries were not having their pay topped up if their picking rate left them below the minimum wage.

The farm said cheques for the amount owed had been sent to two people after they did not contact the harvest manager about their top-up pay. They stated that although they believed they had adequate procedures in place they would commission an independent audit of their employment procedures and payment practices. Statements from Sainsbury's and M&S said the stores were both taking the allegations seriously and they were awaiting the results of the audit.

Government pressure

In December 2006, The Financial Times reported that tougher measures have been introduced in the UK to deal with employers who pay workers less than the National Minimum Wage. Public funds to monitor companies and enforce the rules will increase by 50% to £9m while penalties will be increased for the worst offenders.

Brendan Barber, general secretary of the Trades Union Congress, said: "Raised penalties for persistent offenders, and criminal prosecutions in extreme cases, will send a powerful message that non-compliance will not be tolerated. Rogue companies who pay below the legal minimum both undercut decent employers and give poverty pay to their workforces."[1]

A Better Quality Workforce

Workers who cannot earn enough money are forced into a cycle of poverty. They may have to take on other jobs in the evening or at weekends. Tired and worried workers are less efficient and motivated and are often less able to meet quality standards. Reasonable compensation is likely to increase worker loyalty, worker retention and also be likely to attract the most skilled and productive workers.

[1] Tougher penalties for rogue employers, Financial Times, December 7 2006

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