A Welsh company named and shamed last week for breaching minimum wage rules was the biggest donor to Vaughan Gething’s Labour leadership campaign and its owner is CEO of another firm which employs Conservative MP Alun Cairns, Nation.Cymru can reveal.
Smart Solutions was among five businesses in Wales and almost 140 across the UK, to have been ‘named and shamed’ by the Department for Business, Energy and Industrial Strategy, for failing to pay the minimum wage.
The Newport-based company was found to have failed to pay £1,152.09 to 90 workers after an investigation by HMRC which took place between 2016 and 2018.
The company’s accounts reveal its sole director, Nathan Bowles, was paid £204,833 in 2018 and, as owner of ‘75% or more’ of company shares, he also benefited from a £1 million dividend payment.
In the same year, Smart Solutions supported Vaughan Gething’s bid to become Welsh Labour leader – and therefore First Minister – which included a pledge to “deliver a real living wage for Wales”.
Gething recorded the company as a donor to his leadership campaign on the Senedd’s register of interests and Electoral Commission records show Smart Solutions contributed “staff costs” worth £20,000.
That was the single highest value donation recorded by the Health Minister, who received £91,200 in total.
Bowles is also the co-founder and chief executive of Veezu, which has bought private hire taxi companies across the UK including Cardiff’s Dragon Taxis.
Nation.Cymru revealed last September that Vale of Glamorgan MP Alun Cairns is being paid £15,000-a-year to provide “strategic advice” to Veezu, who have been criticised in the UK Parliament for its treatment of drivers and their trade unions.
The UK Government said that while not all non-payment of wages is deliberate, “it is never acceptable for any employer to short-change their workers.”
Deductions from wages for uniform, training or parking was cited as one of the main reasons for non-payment of the minimum wage, along with failure to take into account changes of age which qualify workers for a higher rate.
Bryan Sanderson, chair of the Low Pay Commission, said: “Those affected are among the most needy and vulnerable in our country – the companies concerned should be deeply ashamed of their performance.”
The firms named and shamed for non-payment face fines of up to £10,000 per underpaid worker as well as having to pay the outstanding wages.
Len McCluskey, general secretary of the Unite trade union which supported Mark Drakeford in the Welsh Labour leadership contest, said “it’s good to see that robbing employers are being shamed, deservedly” but warned that “too many bad bosses get away with it” because of lack of enforcement.
A spokesman from Smart Solutions reacted to the statement by Department for Business, Energy and Industrial Strategy: “As a responsible employer, Smart Solutions works hard to ensure that all workers at every site we manage are paid promptly and in adherence with National Minimum Wage (NMW) regulations.
“Our listing on the Under-Payment Register after the UK Government’s latest ‘naming round’ refers to a historical, isolated incident at a single client facility from 2016, where clocking-in equipment was incorrectly repositioned. This meant that, for a period, workers were not paid for the time taken to change in and out of their hygiene wear, which technically counts as ‘working time’ for NMW purposes.
“As soon as the error was identified, Smart Solutions investigated the situation with the client’s cooperation. Workers whose pay fell below the NMW were identified and paid within one calendar month of agreement with HMRC as to the value of each individual’s shortfall. This equated to an average payment of £12.94 being made by Smart Solutions to each worker affected.
“Smart Solutions has since delivered additional training to its staff, particularly highlighting the importance of assessing what counts as ‘working time’, alongside other employment and health and safety regulations, to ensure that similar situations cannot happen in the future.”