co-op

Midcounties Co-operative has paid compensation to two of its newspaper delivery staff after an HMRC inquiry found it had underpaid them for years.

It has now posted a notice to all its newspaper delivery staff asking them to come forward so that pay rates for the past four years can be checked.

The two cases it has acknowledged happened before Midcounties’ newspaper delivery staff were put on the payroll and paid by the hour. As a result, rates varied depending on how long different rounds took.

According to a report in The Guardian, Midcounties paid Rodney Sharpe, 64, less than the minimum wage for at least four years. Sharpe had diabetes and delivered newspapers in Maidenhead, Berkshire, with the help of a walking stick. He estimated he earned as little as £3.15 an hour because of the length of time his round took him, meaning an underpayment of £14,000 over four years.

HMRC also looked into the case of Roger Lilley, 66, after he is reported to have complained he was earning as little as 69p an hour on occasions due to expenses he incurred. The Guardian said Midcounties had now paid him more than £4,000 in missing wages and expenses.

“We are grateful to Mr Sharpe and Mr Lilley for bringing this matter to our attention,” Midcounties chief executive Ben Reid said in a statement.

“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.”

Midcounties has 225 food stores in 12 counties and is the biggest independent co-op in the country, with 9,000 colleagues.

It refused to confirm the individual amounts it paid in compensation to Sharpe and Lilley after the HMRC inquiry.

However, Reid said the co-op was now undertaking an exercise to calculate back pay that other colleagues might be entitled to.

In order to do that it has placed notices in all of its stores asking for people employed at any time over the past four years to come forward so it could assess any historical payments that they might 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,” Reid said.

“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.”

Midcounties had gross sales of £1.21bn in 2014/15 and operating profits of £20.7m.

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