The Government has fought off a legal challenge by the Cordant Group, a company with a number of subsidiaries which provide manpower staffing services in the security, cleaning and recruitment sectors to major companies and public sector organizations throughout the UK and Eire.
A High Court judge in London rejected the Cordant Groups criticism of a change in the rules which determine what should count as forming part of an employee’s remuneration.
Under new national minimum wage amendements leglistaions which came into effect on the 1st of January, mean that tax-free expenses such as travel costs, subsistence and accommodation cost paid to a worker to cover their travel from home to a temporary workplace will no longer count towards national minimum wage pay.
High Court Judge Mr Kenneth Parker dismissed the challenge saying the amendment made things clearer for employees and employers. He said it “will materially enhance the ability of both employer and low-paid employee to recognise whether or not they are paying and receiving at least the minimum wage prescribed by law”.
In his ruling the judge said Cordant “employs about 30,000 employees,many of them in unskilled jobs that are paid at or near the national minimum wage, and has for several years operated arrangements that will be affected by the challenged legislative change”.
In rejecting permission to appeal, the judge said he had reached the “firm conclusion at the end of the day that this challenge was an attack on the economic merits of regulatory reform affecting the labour market in the guise of a common law and legal equality case”.
He added: “I can discern no arguable basis why this amendment, which in what I have found to be the lawful conclusion of the Secretary of State brings substantial benefit to low paid workers, and is in the public interest, should not be implemented, as planned and announced, on January 1 2011.””s