Rental payments and National Minimum Wage

Advice  |   9 November 2021

Written by
Elliott Flockhart, Solicitor

The Employment Appeal Tribunal (EAT) has held in Augustine v Data Cars Ltd, that rental payments made by a taxi driver in relation to his vehicle and uniform should have been deducted when calculating whether he had been paid the national minimum wage (NMW). It was held that both payments were in connection with his employment, in line with Reg 13(1)(b) of the National Minimum Wage Regulations 2015 SI 2015/621.

Augustine initially provided his own leased vehicle, however, several weeks into his seven month employment, he started renting a vehicle from a company associated with Data Cars Ltd. Following the culmination of his employment, Augustine brought numerous complaints to an employment tribunal, one of which being that he had not been paid the NMW. Subsequently, the tribunal found that specific payments made by Augustine, such as payments for fuel, insurance and cleaning his vehicle, fell to be deducted from his salary for NMW purposes. However, the tribunal concluded that neither the car rental payments, nor the payments made to hire a work uniform, were deductible. The tribunal established that Augustine was entitled to provide his own vehicle, and therefore did not need to rent from Data Cars Ltd or an associated company, and similarly, explained that renting a uniform was not mandatory. In his appeal to the EAT, Augustine argued that the rental payments for his car and uniform should also have been deducted.

The EAT allowed Augustine’s appeal, confirming that, in order to be deductible under Reg 13(1)(b) of the NMW Regulations, the relevant payments were required to be ‘in connection with the employment’ and not reimbursed by the employer. Notably, the payments did not have to be a requirement of the employment, nor did they have to be necessarily incurred, nor wholly or exclusively incurred. The EAT concluded that, had the tribunal applied the correct tests, it could only have found that both types of payment were incurred in connection with Augustine’s employment. In turn, both types of payment were deductible when calculating the NMW.


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