Unlawful deduction of wages: No backstop for recovery of National Minimum Wage claims

In Bath Hill Court (Bournemouth) Management Company Limited v Coletta [2019] EWCA Civ 1707 Mr Coletta had made a claim for unlawful deduction of wages due to his employer failing to pay him the national minimum wage (pursuant to s.23 of the Employment Rights Act 1996 (ERA)) for the period of his employment from February 2000 to August 2015. When the tribunal’s judgement was given in December 2016, he was only awarded £44,603 by way of arrears - the tribunal applied a cut-off of six years on the basis that the claim was caught by the provisions of the Limitation Act 1980. Mr Coletta appealed to the EAT contending that the 1980 Act had no application and that he was entitled to arrears in respect of the whole period (15 years) of his employment. The EAT allowed his appeal, and judgment was substituted in the agreed sum of £100,252.42.

At the Court of Appeal the issue was which statute took precedence in this matter – the provisions of the 1980 Act (a 6 year cut off) or the provisions of s.23 ERA (which require a claim to be presented within 3 months of the last in a series of deductions). This is because s.39 of the 1980 Act means that the 6 year limitation period does not apply if another enactment takes precedence. The Court of Appeal found that identifying whether a provision constitutes a period of limitation by focusing on its substance rather than its specific procedural qualities was the best approach. In upholding the decision of the EAT, the Court of Appeal awarded Mr Coletta arrears of the national minimum wage stretching over the 15 years of his employment.

The claim pre-dates the coming into force of the Deductions from Wages (Limitation) Regulations 2014, which subsequently implemented a limitation period of two years on recovery for deductions.  This decision may be useful for historic underpayment cases such as sleeping in and holiday pay cases. 

Published: 24 October 2019

Article Sections: Payments during Employment

Tags: Deductions from wages, national minimum wage

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