Directors banned for exploiting workers

TWO directors of a Liverpool recruitment agency have been given director bans for a total of 27 years for exploiting workers.

John Howard and Lee Carroll of 7 Stars have been disqualified for 15 and 12 years respectively.

Howard was given the maximum term possible.

An investigation by the Insolvency Service found that 7 Stars supplied migrant workers to food processing factories, but failed to pay them the minimum wage. Employees were required to use sub-standard accommodation connected to the agency which restricted their ability to seek work elsewhere contrary to gangmaster regulations.

The Insolvency Service said two men also used unlicensed suppliers and foreign sources to find workers who were subject to verbal and physical threats. The company incurred a VAT debt of £325,361 for the period when Carroll was a director.

Ken Beasley, the Official Receiver in the Public Interest Unit at the Insolvency Service, said: “The company brought in foreign workers to the UK with the promise of jobs. The reality was that the workers were placed in unfit and unsafe accommodation, had deductions made from their wages for the accommodation and were paid below the minimum wage.

“The workers were unable to leave their jobs because their accommodation was to the agency and they would have been left homeless. They were also underpaid and could not earn enough to give them the freedom to look for employment elsewhere.

“The extremely tough disqualifications handed out by the court show the seriousness of this case. This should serve as a warning that the Insolvency Service will not hesitate to use its enforcement powers to investigate, disqualify and remove from the business environment directors whose companies flout regulations put in place to ensure the well being of workers.”

7 Stars was established in 2008 and went into liquidation in May 2011. Companies House records show Carroll left the business in May 2010 but retained a shareholding along with Howard and Robert Toman.