Harrods warehouse staff have been underpaid thousands of pounds due to a payroll error by the temporary recruitment agency responsible for employing them.
The mistake, involving incorrect holiday pay calculations, is believed to have resulted in a significant shortfall for hundreds of lower-paid workers and could amount to a six-figure sum.
The issue marks the latest reputational setback for the luxury Knightsbridge retailer, owned by Qatar’s sovereign wealth fund, which has spent the past year dealing with a series of crises. Recent challenges include Harrods launching a compensation scheme for survivors of alleged sexual abuse linked to former owner Mohamed Al Fayed, and a major data breach that exposed customers’ personal information in May.
The underpayments affected warehouse staff supplied to Harrods by The Best Connection, a temporary staffing agency that employs workers and places them on assignment. Concerns reportedly surfaced after two years of warnings to Harrods about unusually low pricing in The Best Connection’s tender offers, raising questions over whether the agency was recouping its margins from lower-paid employees.
UK law entitles workers to 5.6 weeks of annual leave—equivalent to an additional 12.07% of their yearly pay. Records seen by the Guardian indicate The Best Connection may have added holiday pay at a rate closer to 10.7%, potentially short-changing workers each pay period. The agency insisted that its calculations were correct and said any variation was “unconnected” to the underpayment, which it attributed to “human error”.
The company rejected any implication that the discrepancies were “a systemic approach that TBC or its clients take to managing costs or quoting low prices to its customers”.
It added: “As soon as we identified this issue, we identified the employees that were impacted and reached out to them proactively to rectify the matter. A large portion of those contacted have already received payments and we are thankful for their understanding in this matter. We continue to be in contact with the remaining individuals.”
The Best Connection did not confirm how many workers had been affected or the total owed. One source familiar with the contract suggested up to 1,000 Harrods workers could be involved, with unpaid sums reaching “hundreds of thousands of pounds”—an estimate the agency dismissed as “not accurate”. It said the average underpayment involved “between 0.5–3 days” of holiday.
The length of time taken to resolve the issue—during which the agency continued to insist its calculations were correct—has raised concerns that further errors may exist across its wider workforce. The Best Connection states it has “access to over 300,000 temporary workers” across the UK and lists major clients including DHL, Waitrose, Next, B&Q, Mitie and the NHS.
Waitrose, Next and DHL confirmed that workers supplied by the agency had been paid correctly. B&Q said it does not use the agency, while the NHS reported no known issues. Mitie did not comment on whether its workers had been affected.
Joanne Young, chief executive of the Association of Labour Providers, stressed that all workers must receive the holiday pay they are legally entitled to. She said: “Workers must be paid all the holiday pay they are legally entitled to. While the calculations can be complex, underpayment, whether accidental or deliberate, is unacceptable and should be swiftly remedied.”
This is not the first time The Best Connection has faced scrutiny. The agency was involved in the illegal pay scandal at Sports Direct uncovered in 2015, where it was one of two staffing firms required to pay around £1m in back wages after workers were not paid the national minimum wage.
A Harrods spokesperson said the error was entirely the fault of the staffing agency: “We are aware of a payslip error impacting some former employees of The Best Connection, one of the agency partners that we work with. The error relates to workers who accrued but did not use holiday days while on assignment with Harrods and was the result of a clerical error by The Best Connection that has since been corrected. All impacted individuals have been contacted by The Best Connection to receive any outstanding holiday pay owed.”
