Employment Rights Act 1996, section 27

Meaning of “wages” etc

Part II Protection of wages

(1) In this Part “wages”, in relation to a worker, means any sums payable to the worker in connection with his employment, including—

(a)any fee, bonus, commission, holiday pay or other emolument referable to his employment, whether payable under his contract or otherwise,

(b)M2statutory sick pay under Part XI of the Social Security Contributions and Benefits Act 1992,

(c)statutory maternity pay under Part XII of that Act,

[F105 (ca)[F106 statutory paternity payF106] under Part 12ZA of that Act,

(cb)statutory adoption pay under Part 12ZB of that Act,F105]

[F107 (cc)statutory shared parental pay under Part 12ZC of that Act,F107]

[F108 (cd)statutory parental bereavement pay under Part 12ZD of that Act,F108]

[F109 (ce)statutory neonatal care pay under Part 12ZE of that Act,F109]

[F110 (ce)any amount of qualifying tips, gratuities and service charges allocated to the worker under Part 2B of this Act,F110]

(d)a guarantee payment (under section 28 of this Act),

(e)M3any payment for time off under Part VI of this Act or section 169 of the Trade Union and Labour Relations (Consolidation) Act 1992 (payment for time off for carrying out trade union duties etc.),

(f)remuneration on suspension on medical grounds under section 64 of this Act and remuneration on suspension on maternity grounds under section 68 of this Act,

[F111 (fa)remuneration on ending the supply of an agency worker on maternity grounds under section 68C of this Act.F111]

(g)any sum payable in pursuance of an order for reinstatement or re-engagement under section 113 of this Act,

(h)any sum payable in pursuance of an order for the continuation of a contract of employment under section 130 of this Act or section 164 of the Trade Union and Labour Relations (Consolidation) Act 1992, and

(j)remuneration under a protective award under section 189 of that Act,

but excluding any payments within subsection (2).

(2)Those payments are—

(a)any payment by way of an advance under an agreement for a loan or by way of an advance of wages (but without prejudice to the application of section 13 to any deduction made from the worker’s wages in respect of any such advance),

(b)any payment in respect of expenses incurred by the worker in carrying out his employment,

(c)any payment by way of a pension, allowance or gratuity in connection with the worker’s retirement or as compensation for loss of office,

(d)any payment referable to the worker’s redundancy, and

(e)any payment to the worker otherwise than in his capacity as a worker.

(3)Where any payment in the nature of a non-contractual bonus is (for any reason) made to a worker by his employer, the amount of the payment shall for the purposes of this Part—

(a)be treated as wages of the worker, and

(b)be treated as payable to him as such on the day on which the payment is made.

(4) In this Part “gross amount”, in relation to any wages payable to a worker, means the total amount of those wages before deductions of whatever nature.

(5)For the purposes of this Part any monetary value attaching to any payment or benefit in kind furnished to a worker by his employer shall not be treated as wages of the worker except in the case of any voucher, stamp or similar document which is—

(a)of a fixed value expressed in monetary terms, and

(b)capable of being exchanged (whether on its own or together with other vouchers, stamps or documents, and whether immediately or only after a time) for money, goods or services (or for any combination of two or more of those things).

Definitions used in section 27 6

worker

(3) In this Act “worker” (except in the phrases “shop worker” and “betting worker”) means an individual who has entered into or works under (or, where the employment has ceased, worked under)—

(a)a contract of employment, or

(b)any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual;

Defined in s.230(3) · see it in the full Act

(6) This section has effect subject to sections 43K , 47B(3) and 49B(10) ; and for the purposes of Part XIII so far as relating to Part IVA or section 47B, “worker”, “worker’s contract” and, in relation to a worker, “employer”, “employment” and “employed” have the extended meaning given by section 43K.

Defined in s.230(6) · see it in the full Act
employment

(5) In this Act “employment”—

(a)in relation to an employee, means (except for the purposes of section 171) employment under a contract of employment, and

(b)in relation to a worker, means employment under his contract;

Defined in s.230(5) · see it in the full Act

(6) This section has effect subject to sections 43K , 47B(3) and 49B(10) ; and for the purposes of Part XIII so far as relating to Part IVA or section 47B, “worker”, “worker’s contract” and, in relation to a worker, “employer”, “employment” and “employed” have the extended meaning given by section 43K.

Defined in s.230(6) · see it in the full Act
guarantee payment

“guarantee payment” has the meaning given by section 28,

Defined in s.235(1) · see it in the full Act
trade union

“trade union” has the meaning given by section 1 of the Trade Union and Labour Relations (Consolidation) Act 1992 ,

Defined in s.235(1) · see it in the full Act
contract of employment

(2) In this Act “contract of employment” means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing.

Defined in s.230(2) · see it in the full Act
employer

(4) In this Act “employer”, in relation to an employee or a worker, means the person by whom the employee or worker is (or, where the employment has ceased, was) employed.

Defined in s.230(4) · see it in the full Act

(6) This section has effect subject to sections 43K , 47B(3) and 49B(10) ; and for the purposes of Part XIII so far as relating to Part IVA or section 47B, “worker”, “worker’s contract” and, in relation to a worker, “employer”, “employment” and “employed” have the extended meaning given by section 43K.

Defined in s.230(6) · see it in the full Act

Cases considering section 27 45

Her Majesty's Revenue and Customs (Respondents) v Stringer and others (Appellants)

[2009] UKHL 31 · 10 June 2009Interprets

The broad opening definition of wages covers sums payable in connection with employment, subject to specified exclusions. The House construed it inclusively and held that statutory holiday payments fell within it. Holiday pay payable under a contract or otherwise includes payments in respect of annual leave and payments in lieu under the Working Time Regulations. The words “or otherwise” are ambulatory and are not confined to pre-existing legal obligations. The general exclusions from wages did not apply to statutory holiday payments. Their existence did not support an implied exclusion of payments under the Working Time Regulations.

Bath Hill Court (Bournemouth) Management Company Ltd v Coletta

[2019] EWCA Civ 1707 · 17 October 2019Defines

Section 27(1) was interpreted as defining wages broadly enough to include sums payable in connection with employment, including the contractual entitlement arising under the National Minimum Wage Act 1998.

Agarwal v Cardiff University & Anor

[2018] EWCA Civ 2084 · 27 September 2018Defines

The provision’s definition of wages informed the conclusion that a sum must be properly payable pursuant to a legal obligation, commonly an employment contract, before section 13(3) applies. (see paras [10]; [18])

25 more judgments, and what each says about section 27, are in the case-law panel in the full Act.

Amendments and notes

9 notes from legislation.gov.uk

Amendments

  1. F105S. 27(1)(ca)(cb) inserted (8.12.2002) by Employment Act 2002 (c. 22), s. 53, Sch. 7 para. 25; S.I. 2002/2866, art. 2(2) Sch. 1 Pt. 2
  2. F106Words in s. 27(1)(ca) substituted (5.4.2015) by Children and Families Act 2014 (c. 6), s. 139(6), Sch. 7 para. 30(a); S.I. 2014/1640, art. 7(m) (with art. 16)
  3. F107S. 27(1)(cc) inserted (1.12.2014) by Children and Families Act 2014 (c. 6), s. 139(6), Sch. 7 para. 30(b); S.I. 2014/1640, art. 5(2)(k)
  4. F108S. 27(1)(cd) inserted (18.1.2020) by Parental Bereavement (Leave and Pay) Act 2018 (c. 24), s. 2(2), Sch. para. 21; S.I. 2020/45, reg. 2
  5. F109S. 27(1)(ce) inserted (17.1.2025) by Neonatal Care (Leave and Pay) Act 2023 (c. 20), s. 3(3), Sch. para. 21; S.I. 2025/41, reg. 2
  6. F110S. 27(1)(ce) inserted (31.7.2023 for specified purposes, 1.10.2024 in so far as not already in force) by Employment (Allocation of Tips) Act 2023 (c. 13), ss. 11(b), 14(2); S.I. 2023/876, reg. 3(c); S.I. 2024/829, reg. 3(k)
  7. F111S. 27(1)(fa) inserted (1.10.2011) by The Agency Workers Regulations 2010 (S.I. 2010/93), Reg. 25, Sch. 2 para. 10

Marginal citations

  1. M21992 c. 4.
  2. M31992 c. 52.