Hirer liable 'twice' for arrears of pay

Hirer liable 'twice' for arrears of pay

Hirer liable twice for arrears of pay

In London Underground Ltd v Amissah, the Court of Appeal held that the hirer, London Underground Ltd, was liable to pay compensation to agency workers relating to a breach of equal pay legislation, despite the fact it had already paid the monies to the insolvent employment agency.  

Background

The Claimants worked for London Underground Ltd (“LUL”) from October 2011 via an employment agency, Trainpeople.co.uk (the “Agency”).  The Agency asserted that the workers were not entitled to equal pay and terms.  LUL agreed with this analysis.  

LUL later decided that the workers should be entitled to equal pay and terms.  From October 2012, the Agency paid the workers a significantly increased rate of pay.  For approximately five months, LUL made payments to the Agency to fund the payment of arrears.  The Agency did not pass these payments onto the workers and in November 2013, went into involuntary liquidation.

Court of Appeal Decision

The Court of Appeal held that the Agency Workers Regulations 2010 (“AWR”) confers a right on workers to be paid equalised pay rates and to benefit from other equalised terms compared with permanent staff.  This is not simply a right to be issued with a document containing compliant terms and conditions of employment. 

The Tribunal previously determined that LUL was 50% responsible for the infringement, and the enhanced pay was attributable to that infringement (i.e. the difference between the pay actually received and the equalised pay rate).  The Court of Appeal went on to consider whether the finding of 50% liability meant that LUL should pay 50% of the compensation or whether the AWR justified a greater discount.  The Tribunal had found that it was not just and equitable for LUL to pay an undiscounted, 50% of compensation.  The Court of Appeal disagreed with their decision.  The Court of Appeal held that this was not an exceptional case, whereby the Respondent would be required to pay less compensation to the worker than the amount for which it was responsible.  While it was regrettable that LUL would have to pay ‘twice’, it was not just and equitable for the workers to be deprived of any compensation when there was no misconduct on their part.  The claims were remitted to the Employment Tribunal to determine the appropriate amounts of compensation.

Comment

This case serves as a reminder that employers who hire temporary workers via an agency should ensure that the agency workers benefit from the same basic terms and conditions as permanent employees, including equal pay.  

Hirers must, at the earliest opportunity, make their own assessment in relation to the applicability of the principle of equality of terms under the AWR. They should adopt caution in relying on the agency’s assessment, since they would be liable if that assessment were ultimately incorrect. 

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