This week’s case round-up
Present not past workers
Inland Revenue Wales & Midlands v Bebb Travel Plc, CA, 16 April
2003, All ER(D) 291
The Court of Appeal confirmed the power to issue enforcement notices to
employers for failing to pay at a rate at least equal to the national minimum
wage is limited to present staff and not past staff.
Bebb Travel paid certain staff an hourly rate that fell below the national
minimum wage at that time. After the company ceased to employ those
individuals, the Inland Revenue issued an enforcement notice for the underpayment.
Using its power under s.19 of the National Minimum Wage Act 1998, the Inland
Revenue required the company to pay to the former staff the difference between
the wages they had received, and the amount to which they were entitled in
accordance with the minimum wage.
Bebb Travel appealed to an employment tribunal against the issue of the
enforcement notice on the basis that one could only be served in respect of
existing workers, not past ones, and the notice was rescinded.
The Inland Revenue appealed unsuccessfully to the Employment Appeal
Tribunal, and pursued the matter to the Court of Appeal.
The appeal was unsuccessful. An enforcement notice can only be served in
respect of current or future pay periods and so applies only to existing
workers. Even though the notice could be used to remedy previous underpayments,
this is subject to the worker still being employed. There was no power under
the Act to issue an enforcement notice in respect of past workers for past pay.
(Note: the National Minimum Wage (Enforcement Notices) Bill is currently
progressing through Parliament. Once enacted, this will enable the Inland
Revenue to issue enforcement notices in respect of former staff of a defaulting
employer.)
Reduction in hours not redundancy situation
Aylward and Others v Glamorgan Holiday Home Limited, EAT, 5 February
2003, All ER(D)249
In this case, the Employment Appeal Tribunal (EAT) confirmed that a
reduction in an employee’s working hours constituted a change to their terms
and conditions, and not a redundancy situation.
Aylward and his colleagues were employed in a respite care centre. On
account of the nature of the services provided, the local authority required a
minimum level of staffing to be maintained.
Following significant losses, mainly due to poor use of the centre in the
months of January and February, a decision was made to close the centre for
these two months each year. The workers’ existing terms and conditions were
changed from a 52- to a 42-week year, with a consequential reduction in pay. A
small number rejected this proposal and were dismissed and replaced.
The redundant staff brought unfair dismissal claims. The tribunal dismissed
the claims, finding that it was not a redundancy situation. There was no
diminution of the company’s need for staff to carry out the work for which they
were employed, just a reduction in the number of weeks for which they were
required. The workers’ appeal was unsuccessful.
The EAT held that the tribunal was quite correct to focus on the requirement
for staff to do work of a particular kind, rather than on the amount of work to
be done.
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