The National Minimum Wage (NMW) on the face of it imposes a straightforward duty to pay a minimum sum for every hour worked. However, as an important Court of Appeal ruling showed, it is not always as simple as that and a failure to understand the complexities can have severe financial consequences (Bath Hill Court (Bournemouth) Management Company Ltd v Coletta).
The case concerned a live-in porter at a block of flats. He was on call at night, albeit in his flat on the premises and permitted to sleep. He complained to an Employment Tribunal (ET) that, when his hours on call were taken into account, he was not paid the NMW. His claim in respect of unlawful deductions from his wages, contrary to the Employment Rights Act 1996 (ERA), was upheld.
The ET ordered the block's management company to pay him £44,603, a sum that represented the amount by which he had been underpaid during the six-year period prior to the commencement of the proceedings. That six-year cut-off was applied on the basis that the provisions of the Limitation Act 1980 applied to his claim.
The Employment Appeal Tribunal (EAT), however, subsequently took a contrary view on that issue and increased his award to £100,252. That corresponded to arrears of pay in respect of the entire period of his employment – more than 15 years.
In dismissing the company's challenge to that decision, the Court noted that the man's claim involved a series of deductions from wages, within the meaning of Section 23(3)(a) of the ERA, going back to the start of his employment. The EAT was correct to find that the six-year time limit did not impinge upon his right to claim in respect of the whole series.
The company also sought permission to appeal against the ET's findings on liability, which were subsequently upheld by the EAT. It was submitted that the law relating to the treatment of on-call hours was in a state of flux and that the outcome of the case was contrary to recent authority. In dismissing the application, however, the Court noted that it had been brought almost two years out of time.