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Lloydspharmacy 'named and shamed' in government minimum wage probe

Lloydspharmacy failed to pay 7,916 workers a total of nearly £1m in wages between 2013 and 2018, according to government records released today.

The Department for Business and Trade (DBT) has today (June 21) “named and shamed” Lloydspharmacy as the second worst offender in a list of 202 UK businesses exposed for “failing to pay” staff the national minimum wage.

Over the course of five years, the multiple failed to pay several thousands of its workers on the minimum wage a total of more than £900,000, it revealed.

Read more: Lloydspharmacy parent company lets go of its 32 Masta travel clinics

Between May 2013 and April 2018, the multiple accumulated £903,307 in arrears, owed to 7,916 workers at an average of £114.11 per worker, it said.

AAH Limited, the multiple’s parent company, was also named as the 11th worst offender on the list, owing over £42,000 to 201 workers at an average of £210.74 per worker, according to the government’s records.


"Unintentional underpayments"


A spokesperson for Lloydspharmacy told C+D that the "unintentional underpayments relate to an investigation by HMRC that was concluded in 2019, when [the multiple] was part of McKesson UK", adding that it was "brought about by HMRC’s rules around company uniforms”.

“As soon as Lloydspharmacy was made aware of it, we acted quickly to notify the affected colleagues and re-imburse them. We also updated our uniform policy to ensure it did not recur,” they said.

Read more: Everything you need to know about the 2023 PDA-Lloydspharmacy pay deal

“Lloydspharmacy can confirm all our employees are paid above the national minimum wage and would like to take this opportunity to reassure them of our commitment to fair and equitable pay,” the spokesperson added.

They confirmed that the entry for AAH Ltd also relates to colleagues who were part of the Lloydspharmacy team at the time the investigation was completed, stressing that it does not relate to AAH Pharmaceuticals. 


“Financial penalties”


The list of 202 businesses that failed to properly pay their minimum wage workers was drawn up from investigations conducted between 2017 and 2019, according to the DBT.

It said that the businesses have all since paid workers what they were owed and have paid “financial penalties”, adding that “robust enforcement action will be taken against employers who do not pay their staff correctly”.

Read more: DH discussions with Lloydspharmacy on Sainsbury's closure impact ongoing

Workers were denied their due wage by pay deductions, incorrect pay for the time spent working or by receiving the incorrect apprenticeship rate, it said.

It stressed that while “not all minimum wage underpayments are intentional, there is no excuse for underpaying workers”, adding that they are a “clear breach of national minimum wage law” that applies in all parts of the UK.


“Clear message”


Bryan Sanderson, chair of the low pay commission, said that naming minimum wage offenders was “a useful tool” for raising awareness and protecting minimum wage workers.

“Where employers break the law, they not only do a disservice to their staff but also undermine fair competition between businesses,” he added.

Read more: 'Around a hundred’ ex-Lloydspharmacy Sainsbury’s staff in redundancy dispute

Kevin Hollinrake, minister for enterprise, markets and small business said that the government was “sending a clear message” to businesses that “ignore” labour law.

“Paying the legal minimum wage is non-negotiable and all businesses, whatever their size, should know better than to short-change hard-working staff,” he said.

“Pay your staff properly or you’ll face the consequences,” he added.

Read more: Mapped: Areas hardest hit by supermarket pharmacy closures

Two other dispensing chemists were also named in the list of 202 offending businesses.

Tanna Pharmacy in Harrow failed to pay £1,815.53 to one worker between January 2017 and September 2018 and Dudley Taylor Pharmacies Limited in Warwick failed to pay £1,276.45 to 174 workers between November 2015 and June 2018, according to the government’s records. Both companies appear to have changed ownership since the government's investigations.

Read more: Well Pharmacy reveals it has taken on ‘a number of’ ex-Lloydspharmacy staff

Tanna Pharmacy now trades as Akasi Pharmacy. Companies House records for Akasi Pharmacy’s holding company, Aksam Limited, show that the previous owners resigned as directors in late 2019.

And in March 2021, C+D reported that Avicenna had bought 57 Dudley Taylor Pharmacy branches for an undisclosed sum.

Director of the union the Pharmacists’ Defence Association (PDA) Paul Day told C+D that if the pharmacy sector "gets a reputation for not meeting legal minimums, it potentially makes it even harder for all organisations in that sector to recruit and retain staff”.


Lloydspharmacy latest


It comes as C+D yesterday reported that Lloydspharmacy parent company, Hallo Healthcare, had sold its 32-strong travel clinic business Masta to Nomad Travel for an undisclosed amount.

Lloydspharmacy sold 30 of its Scottish pharmacies to rival chain Rowlands in May.

And last week, C+D broke the news that all 237 Lloydspharmacy branches in Sainsbury’s stores would be closed on or by June 13. This came after months of speculation, following the multiple’s January announcement that it would be seeking to close all branches in Sainsbury’s in the course of 2023.

Read more: All Sainsbury’s Lloydspharmacy branches to close by tomorrow, chain confirms

The DH told C+D that the government and NHS England were continuing to work with Lloydspharmacy on the impact of the multiple’s branch closures in Sainsbury’s supermarkets.

Meanwhile, C+D reported last week that a redundancy dispute between “around 100” ex-Sainsbury’s Lloyds employees rages on, with the Pharmacists’ Defence Association (PDA) telling C+D that it is awaiting the outcome of its internal appeal, after a grievance was rejected by Lloydspharmacy in May.

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