Employers who persist in paying overseas workers cash-in-hand, at rates below the National Minimum Wage (NMW), may be able to profit in the short term, but as an Employment Tribunal (ET) ruling made plain, they are likely to reap a bitter financial and reputational harvest when the law catches up with them (Laranjinha and Another v Khan).
The case concerned two overseas nationals who each worked more than 70 hours a week as restaurant chefs. They were paid about £300 a week prior to their summary dismissal. Their employer, an individual who was described to them as their 'big boss', paid them in cash. They had no written employment contracts.
After they launched proceedings, the ET found that their account of their employer's multiple defaults was both truthful and accurate. The failure to pay them the NMW constituted a series of unauthorised deductions from their wages. They had never been given written particulars of their employment and had received nothing in respect of untaken holiday pay.
Their dismissal without notice amounted to a breach of contract and the employer, who played no active part in the proceedings, failed to comply with notices requiring him to produce records concerning payment of the NMW. One chef was awarded £15,486, and the other £32,469, in compensation.
Employers must comply with NMW legislation and should seek expert guidance if they are unclear on the rules. Additionally, employees are legally entitled to a section 1 statement of terms and conditions of employment. Avoid these pitfalls and get advice as soon as possible, what you spend now you can potentially save later.
Contact Emma-Louise Hewitt e.hewitt@sydneymitchell.co.uk on 08081668860 for advice.
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