Puthenveettil v Alexander & Ors

An Employment Tribunal has jurisdiction to disapply domestic subordinate legislation where the legal basis for disapplication under EU law is established. It must determine a deferred compatibility challenge once it has found that the challenged exemption applies. A jurisdictional question is distinct from the merits of the compatibility challenge.

Where a finding that regular domestic work was voluntary depends on a statutory family-worker exemption, the contractual status and hours of that work should be reconsidered if the exemption is disapplied. A perversity appeal succeeds only where an overwhelming case shows that no reasonable tribunal could have reached the finding on the evidence.

The claimant, a domestic worker, brought claims including unlawful deductions based on the national minimum wage. The respondents relied on the family-worker exemption in Regulation 2(2) of the National Minimum Wage Regulations 1999.

The London South Employment Tribunal found that the exemption applied, dismissed the minimum-wage claim, and later refused reconsideration without determining the claimant’s deferred challenge that the exemption was incompatible with EU law. It also found that housework was voluntary and that the claimant had received her contractual pay.

The claimant appealed against the failure to determine the compatibility challenge, the treatment of housework hours, and the finding on pay.

1. The appeals succeeded in part. The Employment Tribunal erred by dismissing the national-minimum-wage claim and refusing reconsideration without determining the deferred challenge to the compatibility of Regulation 2(2) of the National Minimum Wage Regulations 1999.

2. The Tribunal had jurisdiction to disapply the Regulation if the legal basis for doing so under EU law were established. Biggs v Somerset County Council, [1996] IRLR 203 CA, confirmed that point. The Tribunal’s view that it lacked that jurisdiction was therefore wrong. Its conclusion that a compatible interpretation was unlikely also missed the claimant’s alternative case for disapplication.

3. Section 4(5) of the Human Rights Act 1998 was irrelevant. The challenge relied on EU law, not the European Convention on Human Rights. The jurisdictional issue did not depend on the claimant first proving indirect discrimination or the other substantive grounds for incompatibility. Those were matters for the deferred compatibility hearing.

4. The separate challenge to the housework finding disclosed no independent error of law. However, the finding that regular housework was voluntary was bound up with the conclusion that the claimant was treated as a family member under Regulation 2(2). If the compatibility challenge succeeded, the Tribunal would have to reconsider the hours of housework and whether it was contractual or genuinely voluntary.

5. The perversity ground failed. Although the respondents’ conduct concerning the bank account and payment schedule was serious, the Tribunal had assessed credibility on both sides and its conclusion on contractual pay was open to it. An appellate tribunal could not substitute its own assessment merely because it might have reached a different conclusion.

6. The compatibility issue, and the consequential housework issue if it arose, were remitted to a freshly constituted Employment Tribunal. Applying Sinclair Roche & Temperley v Heard, [2004] IRLR 763, the EAT considered a fresh tribunal appropriate because the remitted issues were largely discrete and delay would cause no material additional prejudice or cost.

• Employment Appeal Tribunal — allowed the appeals in part and remitted the deferred compatibility challenge, and any consequential housework issue, to a freshly constituted Employment Tribunal: [2018] UKEAT 0165_17_3101.
• London South Employment Tribunal — by judgments promulgated on 11 February 2017 and 16 May 2017, held that the Regulation 2(2) exemption applied, dismissed the minimum-wage claim, and refused reconsideration of the deferred compatibility challenge.