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Tribunal finds in favour of Middlesbrough FC in low pay claim
In a landmark case, Middlesbrough FC has effectively won the right to pay staff below the minimum wage by providing other benefits to them.
In February, an employment tribunal at Teesside Magistrates’ Court overturned a ruling that the Championship football club had broken employment laws by deducting the cost of 2016/17 season tickets over several weeks from the pay of staff receiving the National Minimum Wage (NMW).
In both hearings, it was clear that staff were happy with the current arrangements and that the club had been responding to the wishes of employees who requested the arrangement.
However, HM Revenue & Customs has continued to argue that the club was in breach of current minimum wage legislation and was, therefore, liable for prosecution and a potential penalty.
HMRC has been steadfast in recent years in its refusal to back down and has continued to chase employers who pay less than the minimum wage, even where they have other arrangements in place.
The loss for HMRC at the courts comes after a number of actions against employers such as Iceland Foods, John Lewis and Wagamama.
During the case, HMRC’s lawyers said that Middlesbrough had the “benefit and use” of the season ticket payments from staff, and was in breach of the legislation.
However, the club’s legal team made a successful argument stating that it was “a deduction that has been made on the behest of the employee and for the benefit of the employee”.
When assessing minimum wage compliance, employers must take into account certain deductions from an employee’s wages.
These include deductions for expenditure in connection with the worker’s employment. During this process they must also consider whether the deduction is for the employer’s own use or benefit.
In the case of staff at the club, the courts found that they were not required to buy a ticket or watch the matches, and the deduction did not count towards the minimum wage.
Despite the club’s success in this case, similar cases have ended with prosecution by HMRC and so experts are warning that businesses must be on top of all minimum wage matters, even where employees can opt-in to perks and benefits at the expense of their wages.
Link: Club Statement: HMRC Tribunal