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Employment Appeal Tribunal (EAT) determines that “Employer” for purposes of National Minimum Wage accommodation offset does not include a connected company

The Employment Appeal Tribunal (EAT) has upheld a tribunal’s decision that deductions from wages for rent were not to be treated as reductions for the purposes of calculating the national minimum wage (NMW), where the landlord was a separate property company connected to the employer.

The same individual was also director and sole shareholder of the employing company and the property company.  The Judge held that, as the appeal had been brought solely on the basis that the term “employer” should include a connected company, it had to fail. 

The Judge further commented that, if the appeal had been brought on wider grounds, i.e. that the employer had still been responsible for providing the accommodation to the worker notwithstanding that it was not the landlord, the outcome could have ‘quite possibly’ been different.

In addition, the EAT upheld the tribunal’s decision that deductions for training costs, taken out of the workers’ wages pursuant to a contractual provision if they left employment within 12 months of completing mandatory induction training for any reason other than redundancy, did constitute reductions for NMW purposes.  The situation would have been different if the deduction had been made during employment, which would be a reduction for NMW purposes, and the fact that it was deducted post-termination, or was contractual in nature, or was contingent, did not alter the position.