Warehouse workers at Harrods have been underpaid by thousands of pounds following an agency mistake.

The luxury department store’s warehouse workers were underpaid after the recruitment agency employing them failed to grant them the correct amounts of holiday pay, the Guardian reported. 

The warehouse staff were underpaid by temporary staffing company The Best Connection, which employs the workers and supplies them under contract to the retailer. 

The mistake could reportedly equate to a six-figure debt owed to hundreds of lower-paid staff.

The findings are believed to have been made after two years of warnings to Harrods that the pricing of the agency’s services raised questions over whether it was lowballing tender offers to corporate customers, only to regain any missing margin from lower-paid staff, the report said.

Lawyers for the agency denied any suggestion that the payroll mistakes were “a systemic approach that TBC or its clients take to managing costs or quoting low prices to its customers”.

The Best Connection said: “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 the number of workers affected or the amount they had been underpaid.

However, one, the Guardian report said, source with knowledge of the contract indicated the issue could have impacted up to 1,000 Harrods staff members, while the underpaid money could total “hundreds of thousands of pounds”. The Best Connected claimed the estimate was “not accurate”.

The staffing company said that “the average number of holiday days we are contacting people about is between 0.5-3 days”.

The Guardian also reported that it had seen records that indicated The Best Connection was adding holiday pay to the retailer’s workers’ salaries at a rate of roughly 10.7% of average earnings.

The agency insisted its calculations were correct and indicated the variance in these holiday pay rates was “unconnected” to the underpayment of the department store’s staff, which it claimed had been caused by “human error”.

The business claimed the Guardian “may have confused our holiday calculation in this instance with another process sometimes used”.

A Harrods spokesperson said: “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.”

Retail Gazette has contacted Harrods for comment.

Click here to sign up to Retail Gazette‘s free daily email newsletter