Thomas & Anor v Taylors of St James Ltd (National Minimum Wage)

Where a default judgment records liability on alternative bases without deciding between them, the tribunal determining remedy may hear evidence and decide which basis fixes the award. Selecting one alternative does not contradict the default judgment merely because it entails rejecting the other as the factual basis for quantification.

The tribunal is not required to select the calculation most favourable to the claimants. It must determine the remedy on the basis supported by its findings.

The claimants, drivers and packers, claimed unpaid wages both under the National Minimum Wages Act and, alternatively, under an alleged contractual entitlement to £6.92 per hour for work exceeding 42.5 hours each week.

The respondent did not lodge a response. An Employment Judge entered a default judgment that the complaints of unlawful deductions and breach of contract were well founded, with remedy to be decided later. At the remedies hearing, a second Employment Judge heard evidence and found that the claimants were employed for a fixed annual salary, with no contractual entitlement to further pay apart from national minimum wage rights. Awards were therefore made at the national minimum wage rate.

The claimants appealed, contending that the remedies judgment was inconsistent with the default judgment and should instead have adopted the more advantageous contractual calculation.

1. Appeal dismissed. The remedies Employment Judge was entitled to award the shortfall calculated by reference to the national minimum wage.

2. The default judgment established liability on both alternative formulations pleaded in the ET1s, but it did not resolve the factual and legal competition between them. The first Employment Judge had entered judgment without evidence and without deciding whether the alleged contractual hourly entitlement existed.

3. The remedies Employment Judge was therefore required to determine the sum due. Having heard evidence, she was entitled to find that the contractual terms required the claimants to work such hours as were required for a fixed salary of £18,000, and did not entitle them to additional contractual payment above 42.5 hours. That finding supported an award based on national minimum wage rights for the hours worked.

4. This approach did not conflict with the principle that issues on assessment remain open unless inconsistent with the prior determination of liability. The default judgment had upheld both alternative bases. A remedy calculated on one basis necessarily involved declining the other, but was not inconsistent with that undifferentiated liability judgment.

5. There was no authority or principle requiring a tribunal, where alternative bases of calculation were pleaded, to award the claimant the higher amount irrespective of its findings. The remedy must follow the basis established at the remedies hearing.

• Employment Appeal Tribunal: dismissed the claimants’ appeal from the remedies judgment.

• Employment Tribunal: a first Employment Judge entered default judgment on liability for unlawful deductions and breach of contract, with remedy reserved. A second Employment Judge held a remedies hearing, rejected the alleged additional contractual entitlement, and awarded sums calculated by reference to national minimum wage rights.