TUPE and minimum wage records

Mears Homecare Ltd v Bradburn

The duty to maintain wage records under the minimum wage legislation transfers to the transferee upon a relevant transfer.

Under s. 9 of the National Minimum Wage Act 1998 employers must keep pay records, and this obligation remains where an employee’s employment has ceased. Workers may serve a production notice on their employer to require them to produce such records if they reasonably believe they’ve been paid less than the minimum wage.

Background

Ms Bradburn and her colleagues transferred under TUPE to a new employer. Some four months later they served production notices on Mears Homecare (MH), the transferor, asking for wage information for the preceding 12 months, nine months during which MH was their employer and three months during which they were employed by the transferee. MH didn’t respond and Ms Bradburn and her colleagues brought a tribunal claim. Upholding their claim, the tribunal ordered MH to pay £600 to each of the claimants, that being 80 times the NMW rates then in force as mandated by the legislation. MH appealed.

EAT decision

The appeal was allowed.

Under TUPE, employment does not cease for the purposes of the national minimum wage legislation but continues with the transferee. Liability to keep relevant pay records, and to produce them, therefore transfers to the transferee. Upon transfer the transferor, here MH, ceases to have any obligation to maintain or produce such records.

Link to judgment: https://www.bailii.org/uk/cases/UKEAT/2019/0170_18_0205.html

Comment

As the EAT pointed out, there is no reason why a transferee shouldn’t insist that, as part of the TUPE arrangements, all records kept by the transferor for the purposes of the minimum wage legislation are delivered to it - and given that such records are usually kept electronically, this shouldn’t lead to any practical difficulties. In any case, a transferee can always seek to include indemnities in the transfer to protect it from future potential liability.