Just as SA is introducing a National Minimum Wage, this story from the UK shows some of the weirdness we can expect, and how public funds will inevitably be squandered.
From Accountancy Daily: Middlesbrough football club has been cleared of failing to pay staff the national minimum wage (NMW), after winning its case against HMRC at an employment tribunal, which found that the deductions made at the request of the employees to spread the payments for season cards were permitted under the legislation.
Chairman Steve Gibson said the club had maintained for two years that the position that HMRC had adopted was unreasonable and that it was not in the public interest to pursue this matter.
However, HMRC issued the club with a notice of underpayment in respect of the season cards, and the matter went to a tribunal.
Gibson said: ‘In my eyes this is a huge waste of public money. Not only is it the time and effort HMRC have spent on the investigation but also their legal costs and the court time which have been incurred.
‘I understand that in addition to one witness HMRC had a barrister, lawyer and three other observers at court. This demonstrates the waste and inefficiency within the civil service. All of which we as tax payers are funding.
‘In the addition there has been considerable expense incurred by the Club in challenging the HMRC’s claims.
‘I believe this is symptomatic of a bureaucratic civil service who are out of touch with the real world. Ultimately it is the tax payers who are paying for this shambles and our politicians need to take notice and demand a more professional approach in the future. I am delighted that the tribunal vindicated our decision to fight this case.’
An HMRC spokesperson said: ‘HMRC is unapologetic in its enforcement of national minimum wage for workers, and will ensure that we do everything we can to get people the money that they are legally due. NMW legislation is protective legislation – no worker can agree to receive less than the relevant NMW rate.
‘The legislation does not draw a distinction between breaches arising from uncertainty or mistake and deliberate underpayment which means HMRC has no discretion to make these distinctions either. Employers are either compliant and pay their workers correctly, or they do not.’
Clare Parkinson, pay and reward manager at Croner, said: ‘This ruling is certainly a blot on the copybook of the HMRC and highlights how even they can misunderstand the complicated rules around national minimum wage (NMW). This is especially poignant given that in recent times they have made such a concerted effort to publicly name and shame employers who were adjudged to have broken NMW law.
‘As part of these efforts it had been suggested that deducting staff salaries in this way would be considered unlawful, however the ruling in the Middlesbrough FC case casts doubt on this assumption and suggests that it may be acceptable under certain circumstances.’