Chapter 16Employing labour8 Contracting out. Section 29 makes void any agree-
ment to exclude or limit the Act’s provisions or prevent
a complaint being made to a tribunal unless there has
been conciliation by a conciliation officer or a valid
compromise agreement.
9 Victimisation and unfair dismissal. Section 23 gives
workers the right not to be subject to any detriment, e.g.
failure to promote, because they have asserted rights
under the 1998 Act. Under s 25, employees who are dis-
missed or selected for redundancy for similarly asserting
rights will be regarded as unfairly dismissed.
10 Capability and the minimum wage.A Birmingham
employment tribunal has ruled that a textile company
was entitled to dismiss a worker who, though entitled to
the minimum wage, did not in the employer’s view have
productivity to match.
Impact of NMW on employment awards
The EAT has ruled that an employment tribunal has a
duty to consider and apply the NMW when determining
a week’s pay under the Employment Rights Act 1996 and
calculating the net rate of pay for the loss of earnings
element of the compensatory award under the same Act.
In Paggetti vCobb(2002). P succeeded in his claim for
unfair dismissal against C. P appealed in regard to the
assessment of his basic and compensatory awards. P had
indicated to the employment tribunal hearing that he
worked a 63-hour week for £120. He claimed that the
NMW should impact on the calculation of his pay for
the two awards. The EAT allowed the appeal and ruled
that wages calculations prepared under the Employment
Rights Act 1996 were automatically subject to the statut-
ory minimum wage during the period of work, and that
this was so even though the applicant did not make a
specific claim in this regard under the NMW legislation.
Low Pay Commission
The Low Pay Commission was put on to a statutory
footing when ss 5 – 8 of the NMWA 1998 came into force
on 1 November 1998. In addition to continuing its role
of monitoring and evaluating the impact of the NMW,
the Commission considers whether there is a case for
increasing the NMW and includes earnings growth in its
assessment as well as inflation and the effect on employ-
ment. The inclusion of earnings growth has led to a
higher minimum wage.To give holidays and holiday pay
The rights and duties of the parties here depend upon
what the contract of employment says or what the terms
of a collective agreement with a union are. Again, there
should be no doubt about holidays and holiday pay
because the 1996 Act states that this information is to be
given to the employee in the written particulars.
The employer must also bear in mind the Working
Time Regulations 1998, under which the employee is
entitled to four weeks of paid holiday. These regulations,
which are part of the health and safety provisions, are
considered later in this chapter.To provide sick pay
Entitlement to sick pay must be dealt with by the written
particulars. An employer has no general duty to provide
sick pay from his own funds. There is no implied term
in the contract of service that an employee is entitled
to sick pay (Mearsv Safecar Security(1982)). There is a
statutory duty under the 1996 Act to pay an employee469Gurdev Kaurv Ambertex Clothing(2000)Mrs Kaur, aged 54, was dismissed by Ambertex in July
1999, three months after the national minimum wage
was introduced. It appeared that the company had been
quite willing to employ Mrs Kaur during the previous
two-and-half years while she was being paid on a piece-
work arrangement for sewing buttons on shirts. She was
then paid about £2 per hour based on the speed with
which she worked.
All Ambertex’s employees were paid the minimum
wage of £3.60 an hour when the legislation was brought
into force, but employees were told that payment of
the wage required a set level of productivity. Mrs Kaur
failed to meet the required level and was dismissed. She
claimed damages for unfair dismissal because of the
introduction of the minimum wage. The tribunal rejected
that argument. The principal reason for dismissal was in
effect ‘incapability’ (or underperformance) which can be
an acceptable reason for dismissal under s 98(2)(a) of
the Employment Rights Act 1996. The tribunal did, how-
ever, decide that Mrs Kaur had been unfairly dismissed
by reason of the procedure adopted. She had only been
given one, rather than two, written warnings. Her com-
pensation due to underpayment in some weeks because
of clerical errors was £412.95.
Comment. This does appear to have been a capability
dismissal rather than a minimum wage dismissal which
would have been unfair. It does not appear on its own
facts to suggest that there is a loophole in the minimum
wage law.