Inland Revenue v BEBB Travel Plc

Section 19 of the National Minimum Wage Act 1998 authorises an enforcement notice only where the officer is concerned with a person who is presently a qualifying worker. The notice must require payment for current or future pay reference periods. It may also include arrears for that present worker, but section 19(2) is supplemental to section 19(1) and creates no free-standing power to recover arrears owed to former workers. The statutory language was clear, so the court declined to extend the provision by purposive construction.

The Inland Revenue appealed against decisions of the Employment Tribunal and the Employment Appeal Tribunal concerning an enforcement notice under section 19 of the National Minimum Wage Act 1998. Bebb Travel had employed coach stewards and stewardesses whose calculated hourly remuneration was below the statutory minimum, but who had left the company when the notice was served. The notice required payment of arrears to 25 former workers.

The tribunals held that section 19 did not authorise an enforcement notice confined to past pay periods of former workers. The central issue was whether section 19(2) permitted a free-standing notice for previous underpayment, or operated only as an additional requirement in a notice validly issued under section 19(1).

1. Appeal dismissed. The enforcement notice was invalid and the order rescinding it was upheld. Costs were assessed at £9,420, payable within 14 days.
2. Section 19(1) of the National Minimum Wage Act 1998 contains the threshold condition and the operative power. The officer must be of the opinion that a person presently qualifies for the national minimum wage and has not been properly remunerated for a pay reference period. The present tense is reinforced by section 55(1), which imports the definition in section 1(2). Section 28(1), by expressly referring to whether a person qualifies or qualified, shows that the Act distinguishes present from past qualification.
3. The requirement to remunerate for pay reference periods ending on or after the notice date can apply only to a present worker. Section 19(2) may add payment of sums due under section 17 for previous failures, but only in the same enforcement notice and in relation to the worker and employer identified under section 19(1). The defined expression “enforcement notice”, the definite articles and the ordinary meaning of “also” support that construction.
4. Reading section 19(2) as a separate power would leave its essential threshold unstated and would require “qualifies” to mean “qualified”. The court found no sufficient ambiguity or statutory purpose warranting that strained construction. The penal consequences and practical difficulties of recovering sums from former workers reinforced the narrower reading, but did not determine it.
5. The general purpose of securing payment of the national minimum wage and protecting vulnerable workers did not justify departing from the clear statutory language. A later Bill proposing an express power to issue notices for former workers was noted, but did not affect the construction of the Act as it stood.

• Court of Appeal (Civil Division) [2003] EWCA Civ 563: appeal dismissed with costs.
• Employment Appeal Tribunal: the Inland Revenue’s appeal was dismissed on 16 August 2002, upholding the Employment Tribunal.
• Employment Tribunal: the enforcement notice was rescinded in a decision promulgated on 11 September 2001.