Recruiters face paying more for immigrant and lower-paid workers after a ruling that stops firms taking utility bills out of staff wages to leave workers earning less than the minimum wage.

The Employment Appeals Tribunal ruling on behalf of seven Butlins workers made it illegal for the owner company Leisure Employment Services, to take a weekly £3 charge on electricity bills.
Although the firm will appeal, the ruling is now law. Kevin Barrow, head of the recruitment and resourcing group at Tarlo Lyons, believes the judgment could affect recruiters who routinely house and integrate their staff into the UK.

“It will affect some gangmaster recruiters,” he said. “Recruiters could also face civil and criminal damages. It can be deemed a criminal offence if the recruiter was wilfully found to have neglected this ruling.”
Barrow believes the majority of lower-paid workers would not want this ruling. “Workers will have a lot of hassle. They’ll have to pay for their utility bills out of their taxed income,” he said.

The minimum wage rate for workers aged 22 and over is currently set at £5.05 an hour. On 1 October 2006, this will increase to £5.35.
Leisure Employment Services’ appeal of the ruling is set to be heard in the autumn.