§ 11.6 a.m.
§ Read a third time.
§ Clause 1 [Enforcement notices]:
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville) moved Amendment No. 1:
Page 1, line 14, at end insert—
(2B) An enforcement notice may not impose a requirement under subsection (2) above in respect of any pay reference period ending more than 6 years before the date on which the notice is served."
§ The noble Lord said: My Lords, Amendment No. 1 is grouped with Amendment No. 2. I am grateful for the all-party support we have had during the course of the Bill and I hope that we can also win all-party support for the government amendments which follow on from the debate held at Report stage. Briefly the first amendment will limit the period that an enforcement notice can cover to the period of six years before the date on which it is issued, and the second amendment is a consequential amendment to the Title.
§ Noble Lords may recall from our earlier debates that the Government expect few cases to go back more than three years. That is mainly because the minimum wage regulations require employers to keep pay records for only three years. In practice we expect the Revenue to find it difficult to pursue cases that go further back than that unless there were clear evidence such as payslips held by the worker and no dispute about the hours worked. We would therefore expect very few cases to go back as far as six years. In addition the Limitation Act means that all cases taken through the county courts—the great majority—can only go back for six years.
§ The noble Lord, Lord Razzall, asked what that meant. Briefly, the six-year limit runs back from the date when the claim is lodged with the court. In the county court, each underpayment is viewed as a separate breach. The six-year time limit runs from the date of each underpayment. So if a claim for an underpayment is not brought within six years., the worker will be time barred from bringing that claim.1248
§ Let us take a hypothetical example in which a person has had a job since 1990. The job ends in 2003 and throughout that period the worker had not received the minimum wage—on the basis that the legislation had been in force since 1990. If a claim were lodged for that person in 2003, it could only go back to 1997, six years before the claim was lodged. The arrears for the pre-1997 period could not be recovered because they occurred more than six years before the claim was lodged. On reflection the Government can agree to limit the period that enforcement notices may cover to six years, as sought by the noble Baroness, Lady Miller.
§ I should stress, however, that we do not propose to limit the existing rights held by individual workers. Of course, it seems very unlikely, for the reasons I have given, that more than a handful of cases will go back for more than six years. But we do not wish to rule out the possibility that individual workers might wish to take cases going back for more than six years to an employment tribunal. To do so would put workers claiming in respect of underpayments of the national minimum wage in a worse position than workers claiming in respect of other contractual underpayments. I am happy, as I said, to limit the powers held by the Government's enforcement officers. However, it seems to me that it would be wrong at the same time to limit the existing rights held by individual workers.
§ The Government believe that the amendment brings clarity to the situation and ensures that the rights of the worker and employer are respected. I beg to move.
§ Baroness Miller of Hendon
My Lords, I am most grateful to the noble Lord, Lord Sainsbury., for the courteous way in which he has dealt with my earlier amendment, particularly as we said that it would concern only a few cases. I am happy to accept the amendment that has now been produced in lieu.
§ Lord Razzall
My Lords, as the Minister is aware, I had concerns about the amendment tabled by the noble Baroness in Committee. I was concerned about the points that the Minister raised and that we should not be seen to take away rights from employees or ex-employees that they would otherwise have. In the light of the helpful assurances given by the Minister, I too am happy to support the amendment.
§ On Question, amendment agreed to.
§ In the Title:
Lord Sainsbury of Turville moved Amendment No. 2:
Line 5, at end insert "; and to limit the pay reference periods in respect of which a requirement under subsection (2) of that section may be imposed
§ On Question, amendment agreed to.
§ An amendment (privilege) made.1249
§ Moved, That the Bill do now pass.—(Lord Sainsbury of Turville.)
§ On Question, Bill passed, and sent to the Commons.