Costa Coffee accused of deducting money from staff for training
As allegations emerge that Costa Coffee employees have had pay deducted for training and till discrepancies, experts warn that such practices could damage company reputation
Costa Coffee employees have had up to £200 deducted from their wages for training, they have told the BBC.
The BBC spoke to 13 current and former Costa Coffee employees at stores in Essex, who said they have also been subjected to other deductions for till discrepancies and running costs.
Other complaints about the franchise stores, run by Goldex Investments Group, include allegations over contracts.
Six people claim they were never given written contracts despite asking for them, while a further two said they were given 'promotions' without contracts, and report carrying out managerial roles while being underpaid for the work they were doing. One person who was promoted to a managerial role said she was not paid properly for that role for six months.
It is only legal to make deductions from an employee's pay packet for training if it is specifically stated in that person’s contract that the employer has permission to do so.
Employees must also be given a written copy of terms so that they know their liability in the event of till shortages, and for retail workers, the deductions must not exceed 10% of an employee's gross pay packet unless it is their final pay packet.
Costa Coffee said in a statement: "We take complaints such as these very seriously and have shared those we've been made aware of with our partner who operates the franchise business to investigate as a matter of urgency."
Goldex Investments Group also said it took all the allegations "extremely seriously" and urged employees to raise the issues with their line managers.
Jon Cruddas, Labour MP for Dagenham and Rainham, said he is writing to the managing director of Costa Coffee UK and Ireland to ensure complaints of "poor treatment of staff – particularly young workers" are dealt with adequately.
He added: "A company that employs thousands of workers across the UK and the branch needs to be held to account."
Costa Coffee said contracts for franchise stores are managed by partners and added that some staff contracts do have "clauses relating to deductions".
"Deductions are circumstantial and reviewed on a case-by-case basis by the partner," a Costa Coffee spokeswoman said.
Gethin Nadin, director of employee wellbeing at Benefex and author of A World of Good, told HR magazine that employers that implement similar policies should be aware of both the impact on their workers and on the organisation's reputation.
"Costa says it makes these kinds of deductions clear on employee contracts. But the story has been widely shared on social media and some of the UK's largest news outlets, with the practice being declared 'unfair' by many. It's yet more evidence that when employees don't feel like they are having a good experience at work they are happy to tell the world, and the media is poised to pick these stories up,” he said.
“In this day and age employers now need to consider not only the impact their policies will have on the lives of their employees, but also the impact they may have on their employer and consumer brands. Over the past few years we've seen big high-street brands suffer revenue losses as consumers shy away from those they believe have unfair practices."
Lucy Gordon, senior employment solicitor at ESP Law, said that the incident is an opportunity for organisations to review their policies around deductions: “The recent experience of workers at a Costa Coffee franchise offers employers an opportunity to ensure that their processes for making deductions from workers to cover training costs and cash shortages are within the law. Employers are permitted to make deductions from workers’ wages if there is a contractual right to make the deduction, or otherwise if the employee has consented in writing."
Employers should be as clear as possible when stating deductions, she added: "Many employers will have a standard clause in contracts permitting deductions to be made, but prudent businesses will also have a separate written agreement or form covering consent from the worker for specific deductions – such as for training costs or the recovery of enhanced maternity pay when an employee chooses not to return to work after leave. These separate agreements should make clear the amount that would be deducted, and over what period, so that there are no nasty surprises for the worker."
It is ultimately up to employers to decide on a 'fair amount', she said: “The question arises, in the case of recovering training costs, as to what is a fair amount to deduct. If the deduction bears no resemblance to the loss suffered by the employer, as a result of the worker not completing the course or leaving the business shortly thereafter, the clause permitting the deduction could be regarded as a ‘penalty clause’ designed to punish the worker, and therefore be held to be unenforceable.
"Particular difficulties arise in the context of valuing ‘on-the-job’ training or that offered during a probationary period. With no clear amount attributable to such training it is for the employer to demonstrate that the desired deduction is a fair value," she added.