Friday 16 February 2007

Minimum Wage - gas & electricity

he Court of Appeal has, this morning, handed down its decision in Leisure Employment v HMRC, upholding the decision of the EAT (see bulletin 13/4/06).

In a judgment combining policy arguments with a detailed analysis largely lifted from Elias P.'s earlier decision, the Court of Appeal held that a deduction from wages of £3 per week, in respect of a payment for gas and electricity, was part of the provision of living accommodation (in respect of which the employer had already taken advantage of the maximum allowance) and, in the alternative, that the deduction was for the employer's own use and benefit.

Accordingly, the employer could not count the £3 per week towards the employees' wages. This, in turn, meant that the employer (which owns the Butlins brand) was in breach of the national minimum wage legislation.

In a (partially) dissenting judgment, Wilson LJ described this consequence of the national minimum wage legislation as "regrettable", as it would amount to a disincentive to employers who wish to help provide living accommodation to low-paid staff.

Leisure Employment Services v HMRC

[Thanks to John Bowers QC of Littleton Chambers, who represented Leisure Employment Services, for telling me about this decision.]

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