Cordant Group Plc, R (on the application of) v Secretary of State for Business, Innovation and Skills & Anor

A minister exercising a broad statutory power to regulate minimum remuneration in a social and economic context is entitled to balance competing considerations. Judicial review does not permit the court to substitute its view of the economic merits for that of the decision-maker. An amendment excluding qualifying travel expenses from minimum-wage remuneration was rational, proportionate and within the statutory power because it corrected a regulatory mismatch, reduced exploitation and competitive distortion, simplified enforcement, and addressed risks to workers’ benefits. The public sector equality duty requires due regard to statutory aims, not achievement of a particular result or completion of a prescribed equality assessment. Indirect discrimination may be justified where the measure pursues legitimate aims by appropriate and necessary means.

The claimant, a company operating employment businesses, challenged regulations amending the National Minimum Wage Regulations 1999. The amendment excluded employer payments for qualifying travel expenses under section 338 of the Income Tax (Earnings and Pensions) Act 2003 from remuneration counted towards the national minimum wage.

The challenge alleged failure to consider relevant matters, irrationality, breach of the race equality duty under the Race Relations Act 1976, and discrimination contrary to Article 45 TFEU, Regulation 1612/86 and Directive 2000/43/EC. The central issues were whether the amendment was within the statutory power and whether the Secretary of State had acted unlawfully in adopting it.

1. Judicial review and statutory power. The claim was dismissed. The Secretary of State exercised a broad power under section 2(5) of the National Minimum Wage Act 1998 in a social, economic and political context. The court had to distinguish illegality from an attack on the economic wisdom of the measure and could intervene only for solid legal reasons.
2. The amendment fell within the statutory purpose. It aligned the minimum-wage regime with the income-tax and national-insurance treatment of qualifying travel expenses. The Secretary of State was entitled to conclude that the existing mismatch enabled employers to obtain a disproportionate benefit from salary-sacrifice schemes affecting low-paid workers.
3. The Secretary of State was not required to assume that workers’ net pay would inevitably fall. Employers remained free to pay qualifying expenses in addition to minimum remuneration. The decision-maker could rationally consider exploitation, asymmetric information, competitive distortion, possible effects on earnings-related benefits, inequity in access to state benefits, and simplification of the minimum-wage regime.
4. The race equality duty required due regard to the statutory aims. It did not require a particular result, express reference to the statutory provision, or a separate equality impact assessment. On the evidence, the Secretary of State had considered the greater representation of ethnic-minority and migrant workers in affected employment and had complied with section 71 of the Race Relations Act 1976.
5. The EU discrimination challenge failed. Even if the amendment had a disparate impact on ethnic-minority or migrant workers, it pursued legitimate aims and was appropriate and necessary to achieve them.
6. Permission for the rolled-up application was granted, but the substantive claim was dismissed. The defendant was entitled to its costs. Permission to appeal was refused.

First-instance judicial review claim. Permission was granted for the rolled-up application, but the substantive claim was dismissed by the Administrative Court.