Proposals to amend the National Minimum Wage Act 1998

October 2003

Introduction

Law Centre (NI) is an independent voluntary organisation.  Our primary activity is to support the work of the not-for-profit advice sector in Northern Ireland.  We do this through specialist casework and through training and information services.  Law Centre (NI) has one  solicitor and one  barrister who specialise in employment law.  We provide advice on the merits of an application to, and if appropriate, representation before an industrial tribunal [known in England and Wales as “employment tribunal.”]  The majority of people represented by Law Centre (NI) are low paid, non-professional, workers who are not members of a trade union.  At present Law Centre (NI) is providing ongoing representation in relation to complaints around breach of the National Minimum Wage Act 1998.  Protection of and enforcement of the rights provided to workers under the National Minimum Wage Act 1998 is viewed as being a key strategic target in identifying cases suitable to provide representation in industrial tribunals by Law Centre (NI) for the period 2003 to 2005.

Response to proposals

Law Centre (NI) welcomes the fact that consultations have taken place between the DTI, the Inland Revenue and the Department of the Environment, Food and Rural Affairs (Defra).  However, given that the National Minimum Wage Act 1998 applies in Northern Ireland it is respectfully contended that the potential amendments to the Act should also have been discussed with the Department of Agriculture and Rural Development (DARD), who enforce the agricultural minimum wage in Northern Ireland.

In relation to the proposed amendments we would comment as follows:-

Section 13

It is noted that Section 13 currently gives the Secretary of State power to arrange for officers from other Departments or bodies to enforce the National Minimum Wage and that the DTI has appointed officers from the Inland Revenue to do so.  The current proposal that a similar power should be given to the Secretary of State for the Environment, Food and Rural Affairs in respect of the Enforcement of the Agricultural Minimum Wage seems practical. However it raises broader concerns in relation to the dual systems of legislation relating to agricultural and other work sectors.  Whilst the agricultural wages legislation has been in force for a great deal longer than the National Minimum Wage Act 1998, Law Centre (NI) believes that there should be one Act governing all sectors to ensure that information, inspection and enforcement services are uniform throughout all work sectors.

If a single act was implemented the potential for duplication of costs in relation to the different wage legislations could be minimised. Furthermore at present whilst there is a relatively high level of awareness in relation to the National Minimum Wage Act 1998, there is a lack of information and knowledge in relation to the agricultural wage.  Accordingly Law Centre (NI) recommends that one agency, the Inland Revenue, should be appointed to enforce both the agricultural minimum wage and the national minimum wage.

Section 15

The current proposal to amend Section 15 of the National Minimum Wage Act 1998 to allow for disclosure of information obtained by enforcement officers to enable disclosure of information obtained from the employer to the worker, or information obtained from the worker to the employer is not a satisfactory proposal.  It is recognised that enforcement officers may currently be unable effectively to cross-check a worker’s version of events with the employer and vice-versa – making it more difficult to obtain the factual information needed to determine whether the employer is complying with legislation. However Law Centre (NI) believes that the protection of workers’ anonymity should be paramount.  As recognised in the National Minimum Wage Annual Report of September 2003 (page 6) the Government did not want workers to have to rely on taking action against the employer themselves, “as intimidation or fear of losing their job could prevent a worker from making a complaint.”  If disclosure is allowed initially this would also be contrary to encouraging workers to make complaints because of the perceived risk of intimidation and dismissal. Rather than proceeding with this proposal Law Centre (NI) would recommend that the record keeping requirements of employers should be amended to allow the Inland Revenue to better obtain the factual information needed to determine whether the employer is complying with the legislation.  Thus instead of proceeding with this proposal which could foster a perception that a complaint to the Inland Revenue could put a workers job at risk the onus should be on the employer to produce suitable records in respect of each worker to show that the national minimum wage is being paid.  If the records are sufficient this should make the need for cross-checking redundant.

Sections 17 & 19

Law Centre (NI) welcomes the fact that a new Section 19 (2A) has been inserted into the National Minimum Wage Act 1998. This is particularly welcomed following the decision in Inland Revenue Wales and Midlands v. Bebb Travel Plc [2003] EWCA to close the loophole that prevented an enforcement notice being served on an employer requiring payment of national minimum wage arrears where an employee had ceased work for an employer before the notice was issued.  Law Centre (NI) would also welcome any proposed technical amendment to Section 19 to put completely beyond doubt the fact that a single enforcement notice may relate to more than one worker irrespective of whether the employer’s failure to pay the minimum wage is a previous or ongoing failure.

Sections 19 & 21

Law Centre (NI) sympathises with the difficulties and inefficiency caused due to the fact that Inland Revenue officers are unable to amend or withdraw enforcement notices or penalty notices even if they realise they have made an error or new evidence has come to light.  The current system whereby a tribunal hearing is the only way to rectify such notices which both sides know to be incorrect, seems wasteful and inefficient. However Law Centre (NI) has concerns over the proposal to allow officers to withdraw enforcement notices and penalty notices.  Our concerns could be overcome if suitable safeguards are put in place to ensure that a worker can independently challenge the right of the Inland Revenue to unilaterally withdraw an enforcement notice or penalty notice.  This would prevent a situation where a worker who has relied on the Inland Revenue to enforce non-payment of the national minimum wage and is outside the time limits for personally claiming unlawful deduction of wages being left without a remedy.  The current proposal could allow for such a worker to be left without a remedy in an industrial tribunal if the Inland Revenue decides unilaterally to withdraw an enforcement/penalty notice.        

Further issues

Legal aid is not available for representation in an industrial tribunal.  This often means that protection against dismissal and detriment is nothing more than a theoretical rather than a real right.  Law Centre (NI) recommends that funding should be provided to enable low-income workers with meritorious claims who are sacked for seeking to enforce rights under the National Minimum Wage Act 1998 to pursue a case in an industrial tribunal.  Law Centre (NI) would welcome the opportunity to discuss further this and any of the other issues within this document.