Summary and Background
3.Section 1 of the National Minimum Wage Act 1998 (c.39) (“the 1998 Act”) has the effect that all qualifying workers are entitled to be paid at least the rate of the national minimum wage, as set by the Secretary of State from time to time.
4.The Secretary of State has appointed the Inland Revenue to act as the enforcement body for the purposes of the 1998 Act, as provided for in section 13 of the 1998 Act.
5.Sections 17 to 22 of the 1998 Act relate to enforcement. The effect of section 17 is that where a worker has been paid less than the minimum wage, he is entitled under his contract of employment to be paid the difference between the amount he was in fact paid and the amount he would have been paid had he received the minimum wage. Section 19(1) contains provisions enabling an enforcement officer to serve an enforcement notice requiring an employer to pay a worker or workers the minimum wage for a current pay period and in future. By subsection (2), the notice may also require the employer to pay arrears due to the worker or workers because the minimum wage was not paid in the past.
6.Schedule 2 to the 1998 Act amended the existing legislation on agricultural wages to secure that the minimum hourly rates for agricultural wages cannot be less than the national minimum wage. That Schedule also provides for the enforcement regime for the national minimum wage, which includes sections 17 and 19, to be the enforcement regime for the agricultural national minimum wage. The Secretary of State has appointed the Department for Environment Food and Rural Affairs, the Scotland Office and the Northern Ireland Office to enforce the agricultural minimum wage in England and Wales, Scotland and Northern Ireland respectively, as provided for in section 13 of the 1998 Act.
7.On 16 August 2002 (in the case of Inland Revenue v Bebb Travel plc) the Employment Appeal Tribunal held, interpreting sections 19(1) and (2), that an enforcement officer acting for the purposes of the Act could only issue an enforcement notice requiring an employer to pay the minimum wage to a worker in respect of:
the worker’s current and future pay periods, or
the worker’s current and future pay periods and past pay periods.
8.It follows from this ruling that an enforcement officer has no power to issue a notice in respect of past periods only and, therefore, no power to issue a notice at all in relation to workers whose employment with the employer has already ended.
9.Until this decision, enforcement officers had been issuing enforcement notices that related to past periods only, particularly in cases where workers were no longer working for the employer in question.
10.Section 20 of the 1998 Act provides that, where an enforcement notice is not complied with, an enforcement officer may take proceedings on behalf of the worker to recover the underpayments of the minimum wage covered by the notice, whether by complaining to an employment tribunal under the Employment Rights Act 1996 or suing for breach of contract. The section expressly provides that these enforcement powers do not affect the ability of workers to recover underpayments of the minimum wage by taking such proceedings on their own account. However it is the view of the Government that some workers will not be capable or will not be prepared to take such proceedings on their own account.
11.The National Minimum Wage (Enforcement Notices) Act 2003 amends the 1998 Act so that enforcement officers do have the power to issue enforcement notices which relate to past pay periods in the case of some or all of the past or present workers concerned.