Costa Coffee Franchisee’s Training Cost Deductions ‘Unfair’

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As business owners, we need to be very careful about the way in which we treat our staff.

It is so important to make sure our employees are looked after and taken care of in the right ways. After all, this is one of the most important parts of owning and running a business.

That’s why it is essential to learn from what other companies have done and to make sure you take other examples as cautionary tales.

A good example that comes to mind is the recent outcry that has been caused by Costa Coffee. 

Costa Coffee Franchisee’s Training Cost Deductions ‘Unfair’

A recent story broke of how the coffee chain giant has implemented practices that have ruffled some feathers among its staff. We will look into this in more detail below, but it is important to use these kinds of incidents as an example of what to avoid when running your own business. 

Costa Coffee has made the news recently for all the wrong reasons. Sure, this is one of the most successful British coffee chains, and we’ve most likely all been there for our early morning Americano at least once. However, it seems that the company is in hot water (or should that be ‘hot coffee?’) over the treatment of its employees that’s been branded as ‘unfair.’

Indeed, the dispute has seemingly arisen over the fact that a Costa franchise in Essex was on the receiving end of complaints from staff who claimed they had experienced wage deductions for training.

Many of the employees from the branch detailed that they had up to £200 deducted from their payslips to cover training costs.

If this is true, then Costa could find itself in big trouble with potential Employment Tribunal claims because the general rule is that "on-the-job" training cannot be charged to the employee. Any agreement to repay training costs (e.g. for a first aid course provided by a third party) should always be signed by the employee before they undertake the course for it to be enforceable.

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Some employees claimed to have suffered deductions as a result of running costs, and till discrepancies.

It is not just the Essex branch that has seen this kind of practice occur. Indeed, a staff member from an Upminster branch of the coffee chain revealed that they had been ordered to pay back £280 that had been stolen from the till earlier in the month. This appears to be illegal because for workers in retail employment, the law only allows deductions relating to a cash error or stock deficiency and only if the deduction is no more than one-tenth of the worker's gross pay for that pay day.

If the employer gets this wrong, the employee can bring an Employment Tribunal claim for an unlawful deduction of wages

There have also been rumblings of staff being underpaid, as well as not being given proper employment contracts, and having money deducted for being late. These are not generally considered to be good practices, especially from a franchise business. A spokesperson for Costa claimed that the deductions were simply ‘circumstantial,’ and review on a case by case basis. 

Staff claiming to have been underpaid or not received contracts were advised to get in touch with the franchise. Whether or not this is an oversight by Costa or a deliberate business practice remains to be seen, but this is surely something that is going to be investigated further. Costa has said it is getting to work on an internal investigation over many of the claims, but we could yet see a Watchdog-style probe into the franchise’s business practices.

As modern business owners, it is essential to look to this story as a caution for how not to treat your employees. As well as the importance of making sure that all aspects of your business are being run properly, with no oversights.

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About the author

James Rowland

Account Services


James is on the Business Development & Account Management team at Neathouse Partners and regularly posts articles surrounding issues in HR & Employment Law, including case law & legislation updates. If you have a particular issue you would like addressed, feel free to drop James an email, and he will be happy to offer his assistance.

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