Ms A Palmer, Counsel. For the v Respondent — 2019

This was an appeal by Barham Care Centre Limited and Primary Homecare Limited against two notices of underpayment issued on 6 March 2019 under s.19 of the National Minimum Wage Act 1998. The notices related to Mr Sevdalin Salyov, with an alleged underpayment of £357.84, and Mr Kristiyan Krumov, with an alleged underpayment of £342.36. The tribunal identified three categories of contentious deductions: accommodation-related deductions, deductions for shadow training and induction training, and deductions connected with DBS checks.

On the accommodation issue, the tribunal found that the rent, deposit and utility costs were deducted in accordance with the workers' employment contracts and the tenancy agreement with Cardinal Healthcare Properties Limited, but Cardinal was an entirely separate legal entity from the appellants. It held that a payment deducted by an employer and passed to a third party was not for the employer's own use and benefit under regulation 12(1) of the National Minimum Wage Regulations 2015, and therefore could not count as a reduction. It also rejected any suggestion that Cardinal could be treated as the employer for the purposes of s.54(4) of the Act.

On the DBS and training deductions, the tribunal held that the workers were contractually liable for the costs under the deduction agreement, so the deductions fell within regulation 12(2)(a) and were not treated as reductions. It referred to Commissioner for Revenue and Customs v Lorne Stewart Plc [2015] ICR 708. On the induction training point, it found that the contract of employment only began after the training had been satisfactorily completed, so regulation 33 did not apply because the men were not yet workers for the purposes of that provision. The tribunal therefore concluded that the agreements to repay the training costs were valid and not subject to the National Minimum Wage legislation, and the appeals against both notices succeeded.