BUT RECRUITMENT FIRM DUCKS QUESTIONS ABOUT WHETHER IT WAS A ONE-OFF 

* GRADUATE FOG EXCLUSIVE *

Reed has refused to confirm that it made a £2,500 payment to a former intern earlier this year, and has ignored questions about whether it was the unnamed ‘recruitment agency’ which secretly paid £167,000 to former workers (including interns), following an investigation by HM Revenue and Customs. Despite repeated phone calls and emails from Graduate Fog over more than a month, nobody from the firm has bothered to supply any kind of response.

Regular readers will remember that in June, HMRC announced a list of ‘wage arrears’ cases, where ‘underpaid workers’ (paid less than the minimum wage) received back-pay owed to them.

One line of the statement read: ‘A recruitment agency was ordered to pay over £167,000 to workers, including some it had classified as unpaid interns.’ But the identity of the agency has never been revealed.

Why do we suspect Reed? Because we can exclusively reveal that the agency has made at least one payment to a former intern — for £2,500, in February 2014 — which hasn’t been itemised in any other lists published by HMRC to date. Describing his 12-week, 9am to 5pm role there, the former intern has told us: “This was definitely not work shadowing” – but he was paid just £65 a week towards expenses.

The former intern also told us that, while at Reed, he looked at the company’s internal database and saw there were over 110 other interns listed on it. If that is accurate, it could explain why the recruitment agency’s back-pay bill (if it was Reed) was so large.

If even a fraction of that £167,000 payment was to former interns, it would make it by far the biggest ever intern back-pay pay-out in the world, ever.

In addition, we have read multiple accounts from former Reed interns, below stories we have run about the company’s use of unpaid workers, who are often given titles like “intern receptionist” and “intern executive assistant”. So we know Reed has been using unpaid interns on a large scale, for many years.

Speaking exclusively to Graduate Fog, graduate and former Reed intern James (not his real name) said he was paid around £65 per week during his 12-week job at one of the firm’s offices in South West England, but that he worked set hours and his role involved plenty of real work that was useful to the company. He told us:

“In the summer of 2011 I completed a 12-week unpaid internship at Reed. During this time, I was doing exactly the same work as the permanent consultants such as finding CVs, speaking to candidates, interviewing and registering candidates, processing security clearance and people’s right to work, making business development calls, going to client meetings etc. I was very much involved with all aspects of the recruitment process. This was definitely not work shadowing.

“I worked 9am to 5pm with an hour for lunch. If I missed an hour or anyone else left earlier I was asked to stay later to cover the phones. I was paid £65 a week for expenses, although this was not in relation to any specific costs. It was the same for all interns except those based in London who I think got a little more.”

James says that during his time there he handled hundreds of confidential documents, including candidates’ CVs, contact information and salary details pertaining to their current job and the roles they were placed in by Reed.

When James contacted HM Revenue and Customs — the department responsible for minimum wage claims — about the internship, he was initially told it was unlikely he would be entitled to any back pay as he had agreed to work unpaid at the time. (This concerns Graduate Fog as that is completely irrelevant in cases of non-payment of the minimum wage).

At several points, he thought his case had been shelved, but it rumbled on — and in February 2014 he received a phone call in which an HMRC staff member asked him some questions about his hours and holiday and whether or not he would be willing to pursue his case via a tribunal.

James answered the questions and said yes, he was prepared to take the case to court.

Ten minutes later, HMRC rang back and said Reed had agreed to pay him £2,500 (before tax and National Insurance). The money appeared in his account the next day.

Five months later, James has still not received any paperwork from HMRC or Reed.

Clearly this is all rather odd. But there is a bigger question here: Was this payment a one-off – or is the true scale of Reed’s full payment far larger, running into hundreds of thousands of pounds?

Despite their promises to be more transparent about cases like this, HMRC weren’t saying much. In June, when asked why the ‘recruitment agency’ hadn’t been identified, a Department for Business spokesperson told the BBC that the start of this case pre-dated the new enforcement regiment, meaning any resulting pay-out need not be made public.

So we asked them again, this time providing them with details of the intern’s £2,500 payout. As expected, HMRC said:

“We’re not confirming any of the details. What was in the HMRC press notice is all that’s being said publicly.”

But then something weird happened. In a string of confusing emails, the official appeared to accidentally confirm that Reed was the organisation that made the payment. We outlined the intern’s case that we knew about, mentioning Reed several times explicitly, by name. And this is what she said:

“HMRC issued a separate press notice to the BIS naming and shaming one, listing some of the national minimum wage violations they have investigated. The cases in the HMRC press notice, which includes the case you refer to –https://www.gov.uk/government/news/hmrc-secures-record-46m-minimum-wage-arrears-for-underpaid-workers – were investigated under the old naming and shaming rules and didn’t meet the criteria for being named. This still stands.”

“…which includes the case you refer to”? Did you click the link? Is there anything else in that page that she could mean, other than the line about the £167,000 pay-out by ‘A recruitment agency’? When we tried to clarify what she had meant, she clammed up. Hmm.

We went back to Reed. We’d already emailed them over a dozen times — through the central “Press.office@…” email address, and via the named addresses of several members of their publicity team — and heard nothing. For legal reasons, we like to do things in writing at Graduate Fog, but this was getting silly.

So we rang and went through to a chap called Ian who works at McCann, the PR and ad agency that represents Reed. We explained the situation, and he confirmed that the main “Press.office@…” email address we’d been messaging was the right one (so they’d just been ignoring us all this time?), and to send it again (!). This time, we said we would CC him in. So we did:

To: Reed Press Office; CC: Ian@McCann
From: Graduate Fog
Date: Tuesday 5 August, 11.55am
Subject: Reed intern payout

Hi Ian

Thanks for your time on the phone earlier this morning. I would be grateful if you could share this email with your colleagues in the Reed Press Office.

I have reason to think that Reed is the ‘recruitment agency’ mentioned in this 5 June press release from HM Revenue and Customs:
https://www.gov.uk/government/news/hmrc-secures-record-46m-minimum-wage-arrears-for-underpaid-workers

…although I note that Reed’s name does not appear in this supplementary list of 25 named employers, issued on 8 June:
https://www.gov.uk/government/news/government-names-employers-who-fail-to-pay-minimum-wage

I have spoken to a former Reed intern who received £2,500 from Reed earlier this year, for a 12-week expenses-only internship he completed in 2011. I am also aware that Reed has been employing expenses-only interns on a large scale for several years, a practice that was always highly questionable.

I have two questions:

1) Can Reed either confirm or deny that it is the unnamed ‘recruitment agency’ in HMRC’s 5 June press release, which paid £167,000 in wage arrears?
2) If you can confirm this, how much of the £167,000 payout was to former interns? How many individuals received payment, and what was the average amount?

Having already sent several emails to this address with no reply, I would appreciate a swift response. At the very least, could somebody please confirm that this email has been received?

With many thanks

Tanya de Grunwald
Founder, Graduate Fog

A day later, we’d had no response. So we emailed again:

To: Reed Press Office; Ian@McCann
From: Graduate Fog
Date: Wednesday, 6 August 2014, 11:38

Hi Ian
Can you just confirm that this email has been received – and when I might expect a response?
Thanks
Tanya

Then… result! A REPLY!!!

To: Graduate Fog
From: Ian@McCann
Date: Wednesday, 6 August 2014, 12:12

Hi Tanya,

Can confirm this email has been received. I’ll continue trying to get in touch with the right person at Reed today.

Can I ask when your deadline is?

Best wishes,

Ian

We replied:

To: Ian@McCann
From: Graduate Fog
Wednesday, 6 August 2014, 12:15

Thanks Ian.
I would appreciate a response by the end of the day.

Tanya

But the deadline passed, and we heard nothing. So we emailed again…

To: Ian@McCann
From: Graduate Fog
Date: Friday, 8 August 2014, 13:44

Any progress on this, Ian?
Tanya

And again…

To: Ian@McCann
From: Graduate Fog
Monday, 11 August 2014, 12:09

Hi Ian
Please could you send something today, even if it is just to say that Reed has no comment to make.
Thanks
Tanya

And again…

To: Ian@McCann
From: Graduate Fog
Friday, 15 August 2014, 15:33

Hi Ian
Any word from Reed yet?
I’d be grateful for an update.
Thanks,
Tanya

And we’ve still heard nothing. So, there you have it:

An intern receives a pay-out from a huge recruitment agency. An HMRC staff member kind-of / perhaps / accidentally reveals that the payment was possibly / probably only a small fraction of a much larger pay-out to many (hundreds of?) other former employees, but won’t tell us any more than that because their priority is to protect the firm’s identity (rather than reveal the truth). And a huge, global PR agency advises a huge, global recruitment agency to stonewall a handful of entirely reasonable questions from a graduate careers website which is trying to get to the bottom of what happened.

If there’s one thing Graduate Fog hates, it’s when big companies dismiss our questions about interns. We find it disrespectful that two huge companies (McCann and Reed) seem to think so little of the UK’s young workers that they don’t even feel they need to bother to reply to our questions, which we think our readers deserve answers to. And of course, their silence leaves one big, unanswered question hanging in the air:

If it wasn’t Reed that made this massive pay-out, why not just deny it?