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Employment Agency Director prosecuted for non payment of wages

06 March 2015

In a rare case of this sort, the Employment Agency Standards (EAS) inspectorate has prosecuted a Director of an Employment Business recruitment firm for non payment of wages.

Mr Hayter was the director of WHG Offshore Limited (WHG), an Employment Business regulated by the Conduct of Employment Agencies and Employment Businesses Regulations 2003 (2003 Conduct Regulations). An Employment Business employs and pays workers (Work Seekers) and hires them out to work for a third party, end user hirer (the Hirer), who pays the Employment Business for the service.

The Work Seeker in this case, Mr Apiafi, was a hydrographic surveyor who began to work through WHG in 2011. He experienced pay problems at the end of 2012 when WHG went into administration in circumstances in which the Hirer had gone into liquidation and not paid WHG. Mr Apiafi was owed £15,000 in unpaid wages.

Under the 2003 Conduct Regulations it is an offence for an Employment Business to withhold wages for work that has in fact been undertaken. It is also an offence to:

  • Fail to inform Work Seekers in the written terms of employment that the employer is an Employment Business;
  • Fail to include in the terms an undertaking to pay Work Seekers for hours worked whether or not the Employment Business is paid; and
  • Fail to include in the terms the minimum rate of remuneration that was expected to be achieved.

As a director of WHG, Mr Hayter was ordered to pay fines and compensation amounting to £7115 and legal costs of £5,000.

David Ludlow
Partner - Employment