Travel expenses and minimum wage

A change to the minimum wage regulations came
into force on the 1 January after a legal challenge
from a company failed.
The change to the regulations prevents employers
from treating travel expenses as part of the wage
paid to workers.
Recruitment group Cordant, which employs around
30,000 people in the UK and Ireland, unsuccessfully
challenged the amendment to the National
Minimum Wage Regulations 1999, which came into
force on New Year’s Day.
The regulations now provide that any payments
to workers for travelling expenses under section
338 of the Income Tax (Earnings and Pensions)
Volume 73 Issue 1 Fact Service 3
Act 2003 cannot count as part of the national
minimum wage.
Giving judgment in R (on the application of Cordant
Group) v Secretary of State for Business [2010]
EWHC 3442 (Admin), Mr Justice Kenneth Parker
described the challenge as “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 said he could “discern no arguable basis”
why the amendment, which brought “substantial
benefit” to low-paid workers and was in the public
interest, should not be implemented as planned.
Unions have welcomed the changes. Mary Maguire,
head of press and broadcasting for the public sector
trade union UNISON, said it would prevent bad
employers from exploiting workers.
She said: “It’s good news that the courts have come
down on the side of low paid workers. Employers
should not be allowed to get around their legal
obligations in this way.
“UNISON fought for years to get a statutory national
minimum wage established that would help stop
exploitation by bad employers by providing a pay
floor. Despite the fact that it is still too low, it is
incredible that employers are still trying to get
round it.”