The Labour Inspectorate’s spotlight is clearly still on minimum entitlements with retail chain Smith City being ordered by the Employment Court to pay employees for 15 minute, unpaid, pre-work meetings.
Like many businesses, Smith City held meetings for sales staff who were on duty each morning before opening the business, the purpose of which was to discuss store related business. Employees were paid from when the stores opened. Smith City expected sales staff to attend the meetings, and employees believed that these meetings were compulsory, with some facing disciplinary action as a result on non-attendance. The Court considered it a “telling observation” that managers regarded those who did not regularly attend the meetings as poorer performers than others.
The Labour Inspectorate argued that sales staff who attended these meetings are “working”, and issued an improvement notice, including that Smith City was failing to pay minimum wage to employees as, once the extra 15 minutes were taken into account, employees paid the minimum wage were being paid below the minimum prescribed rate. Smith City also failed to account for the meetings in the record of hours for the actual working day, resulting in an underpayment of employees.
In determining that the sales employees were performing work when attending the meetings, the Court found that it was required to undertake a factual enquiry and assess whether the meetings were an integral part of the employee’s principal activities as sales staff.
The Court applied the factors set out in Idea Services Ltd v Dickinson, a case where the issue was whether the employee was “working” in his role of a community care worker during a sleepover period after his normal contracted hours had ended. The Court found that the sales staff were constrained in their freedoms by the meetings as they were expected to attend, would be considered poor performers if they did not, and were required to listen and not be disruptive during the meeting. The employees did not have “active” responsibilities to the same extent and nature of those in Dickinson, but the Court found the employee’s were obliged to sit and listen to work related information and to absorb it. Smith City benefited from the meeting as it had a cost free way to prepare its staff for the working day.
Consequently, the Court held the employees were working during the meetings for the purposes of the Minimum Wage Act 1983, and those who attended the meetings did not receive the minimum wage rate for each hour they worked.
This decision is likely to have significant ramifications for employers who hold similar meetings and do not pay employees to attend. Employers, particularly those that pay employees close to the minimum wage, should review their practices and ensure their employment records accurately record the hours worked by employees.
Workplace Law team
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