Payments made to lease a driver’s car and uniform are deductible for the purposes of calculating National Minimum Wage
So held the Employment Appeal Tribunal (“EAT”) in Augustine v Data Cars Ltd.
Mr Augustine was employed as a driver. Shortly after commencing work, he began leasing a car from a company associated with Data Cars. He also paid for a uniform. Upon termination of his employment, Mr Augustine brought several claims against Data Cars including that calculating national minimum wage once his expenses were taken into account, meant that he was getting underpaid.
The employment tribunal at first instance did not agree with Mr Augustine for reasons including the fact that Mr Augustine was not required to lease the car from Data Cars (or an associated company) nor was he required to wear a uniform (the work which required a uniform was optional).
Mr Augustine appealed this decision. The EAT held that the employment tribunal had incorrectly applied the test. To be deductible, the payments must be “in connection with the employment” in accordance with Regulation 13(1)(b) of the National Minimum Wage Regulations 2015 SI 2015/621. The EAT did not place any weight on the fact that Mr Augustine could have met his employment obligations by using his own car nor that he only needed a uniform when doing particular work. In its view, Data Cars should have deducted the rental payments in respect of leasing the car and the unform before calculating national minimum wage (as both were in connection with his employment as per Reg 13(1)(b)) and by failing to do so, Mr Augustine was indeed paid below the NMW.
You can read the full judgment here.
This case update was written by Jo Sinclair, Solicitor at didlaw.