The Secretary of State has accepted a disqualification undertaking from the director of manual labour supply service Euro Contracts Services, for failing to ensure that the organisation paid farm workers the national minimum wage.
The disqualification undertaking was accepted by the Secretary of State on 1 May 2018, and became effective from 22 May 2018 for a seven-year period. During this period, Shakil Ahmed, previously director at Euro Contracts Services, cannot act as a director of an organisation, be a receiver of an organisation’s property, or directly or indirectly take part in the promotion, formation or management of an organisation or limited liability partnership.
The disqualification undertaking occurred as a result of HM Revenue and Customs (HMRC) investigations into Euro Contracts Services failing to pay employees the national minimum wage.
The organisation acts as a recruitment service and provides manual labourers to a farm in Hertfordshire. Euro Contracts Services received a fee from the farm, which was used to pay the labourers and cover the organisation’s administrative costs.
HMRC initially investigated the organisation in 2009 and found that farm workers had been underpaid by a total of £69,000. Euro Contracts Services rectified this, but then deducted the costs of transporting labourers to the farm. This once again placed labourers’ pay below the national minimum wage.
This underpayment was again corrected, but a further HMRC investigation found that, between August 2010 and January 2011, Euro Contract Services paid 246 employees below the national minimum wage, equating to more than £110,000.
Ahmed appealed against HMRC’s findings, but the claim was dismissed in court. HMRC then lodged a claim against the organisation in December 2015 after the most recent underpayment was not rectified. In August 2016, Euro Contracts Services entered Creditors Voluntary Liquidation, meaning that the money owed to the employees was not paid. The disqualification undertaking followed.
Dave Elliott, head of insolvent investigations, Midlands and West, at the Insolvency Service, said: “The fact that Shakil Ahmed was investigated on two separate occasions, shows that this was not the case of administrative error but a wilful act on his behalf.
“Shakil Ahmed fully deserves his ban after cheating his workers out of what was rightfully theirs and this should serve as a warning to other directors that they have a duty to comply with regulations or else be banned from running [organisations] for a long time.”