Department store group Debenhams is at the centre of a row about underpaying staff. Does it deserve the criticism?

No, Debenhams does not deserve to be a whipping boy for sharp practice

george macdonald

The trouble with naming and shaming is that it reduces complexity to stark black and white. There are no shades of grey.

Department store group Debenhams has been publicly pilloried by the Department for Business, Energy and Industrial Strategy (BEIS) in a league table of businesses that have underpaid staff the national minimum or national living wage.

The retailer topped the list of culprits, but its prominence is unfair and it has been ill-served by BEIS.

There is no excuse for failure to meet legal obligations over pay. However, Debenhams has been made a high-profile whipping boy for sleazy practices a million miles away from what it actually did.

Fact. Debs failed to pay £134,894.82 to 11,858 workers. That’s what made headlines.

The story behind the fact. There was a technical error in Debenhams’ payroll calculations, leading to an average underpayment of around £10 per affected person. It happened not last week or last month, but in 2015.

“It is those that are guilty of breaking the law in the full knowledge of what they are doing, rather than the ones that simply made a mistake, that should be most condemned”

Of course that’s wrong, and it’s certainly sloppy, but it was rectified without demur after being discovered in an HMRC audit.

But Debenhams was ‘the story’ from the BEIS list.

That conveniently ignores the fact that so many of the 360 offenders listed were small businesses whose names are unknown to anybody but their particular customers.

At some of those small companies – no doubt not all – the underpayment was the result not of oversight but of sharp practice. There were many instances of thousands of pounds being owed to a single employee or a small number of staff.

It is those that are guilty of breaking the law in the full knowledge of what they are doing, rather than the ones that simply made a mistake, that should be most condemned for their failure to meet pay obligations.

But a familiar name such as Debenhams, present throughout the country, makes a convenient whipping boy even though it is not representative of the shabby business behaviour that the naming and shaming is designed to crack down on.

It’s another example of how, more generally, retailers’ contribution to the UK’s economic prosperity, employment and vibrant town centres is so often overlooked in the corridors of power, where the industry often seems to have few friends.

George MacDonald is executive editor of Retail Week

Yes, Debenhams must do better as it tarnishes the industry’s name 

James Wilmore

James Wilmore

There’ll be a few red faces at Debenhams headquarters this morning.

Bosses at the department store giant will have known this was coming, but no business likes to be named and shamed so publicly.

Debenhams has reason to feel aggrieved for its name being the one that catches the headlines.

But though this was a technical error, it left nearly 12,000 workers out of pocket.

And though this was only a small amount, it is still worrying that a company of Debenhams’ size can make such a mistake.

You would have thought a retailer like Debenhams would have better checks and balances in place to stop this kind of thing happening.

At the very least, it will do nothing for staff morale.

Debenhams has been fined £63,000 for the mistake. For a company that made £106m in annual profits last year, it’s a drop in the Atlantic.

“The industry as a whole must do better in addressing its image in the corridors of power and to the wider public”

Nevertheless, it’s a few shop floor salaries.

Retail has been in the spotlight for some years now over staff treatment. The industry’s name has been dragged through the mud over questionable warehouse working practices and pay conditions.

In the wider scheme of things, my concern is that incidents like this do nothing to help dispel the perception that retail is a low-pay sector that fails to look after its workers.

After all, without the hard graft of shop floor staff, retail businesses would crumble.

So, yes, Debenhams may have been singled out for a slip. And there is no reason to believe it is not a responsible employer.

But the fact of the matter is, the industry as a whole must do better in addressing its image in the corridors of power and to the wider public.

It is no use relying on the fact that retail is the UK’s biggest private sector employer.

In this political climate, companies must prove they are acting responsibly by going the extra mile.

Incidents like this do nothing to help.

James Wilmore is news editor of Retail Week