Euro Garages, also known as EG Group, has come under scrutiny after being penalized for underpaying 3,317 workers by over £824,000 between 2018 and 2023. The company was co-founded by billionaire British brothers Mohsin and Zuber Issa. Brought to its knees by the pandemic, it has since retreated from the UK with a dramatic restructuring and sold its expanded petrol forecourt network and Cooplands bakeries. Even with these obstacles, Euro Garages still runs around 150 Starbucks franchise shops throughout the UK.
For Euro Garages, these problems with payroll practices are not recent revelations. The company paid out millions in damages during that period alone for committing the same minimum wage payment violations. To their credit in 2022, Euro Garages did make good on these historical failures and back pay around 42,000 workers over £6 million. The company agreed that its past payroll problems led to the underpayments. In response to that, they’re now implementing new, better systems to prevent violations of UK labor laws.
While the company continues to work through these challenges, it argues that it has always been and will continue to be committed to fairness for its workers. A spokesperson for EG Group stated, “These historic payroll issues that took place between 2015 and 2019 have been fully rectified. All affected employees were subsequently reimbursed in full in agreement with HMRC.”
In a sign of how much the tide has turned, UK shadow education secretary Peter Kyle weighed in on the developments. He noted, “I know that no employer wants to end up on one of these lists. Our Plan to Make Work Pay cracks down on those not playing by the rules.” This is a sign of positive enforcement actions by the federal government to hold companies accountable for violations of labor laws and mistreatment of employees.
Euro Garages is facing penalties for its inability to comply with minimum wage requirements. This problem partly results from an earlier run of payroll errors from that window. A spokesperson for Centrica, which has been associated with Euro Garages, clarified the nature of the underpayments, stating, “The total underpayment related primarily to salary sacrifice arrangements and training bonds, rather than take-home pay, and was around £160,000 – our UK annual wage bill is currently around £1.2 billion.”
Even with the DOL’s penalties and history of payroll violations, Euro Garages has been moving in the right direction to prevent these practices. As part of the settlement, the firm adopted new practices and procedures designed to avoid future violations of applicable labor laws. They are working diligently to ensure compliance and maintain their commitment to employee welfare.