CA-2024-001613 - [2025] EWCA Civ 956

Section 1(1) of the Act entitles an employee to be paid at least the NMW ‘in respect of work in a pay reference period’. Section 1(3) provides that the NMW is ‘such single hourly rate as the Secretary of State may from time to time prescribe’. A pay reference period is such period as the Secretary of State may prescribe for that purpose (section 1(4)). Regulations may provide for ‘the circumstances in which, and times at which, or the time for which, a person is to be treated as, or as not, working, and the extent to which a person is so to be treated’ (section 2(3)).

Four sections (5-8) are headed ‘The Low Pay Commission’. Section 5 requires the Secretary of State, before making the first regulations under section 1(3), 1(4), or 2 of the Act, to refer the matters listed in section 1(2) to the Low Pay Commission (‘the LPC’). That list includes ‘(c) what method or methods should be used for determining under section 2 above the hourly rate at which a person is to be regarded as remunerated for the purposes of this Act’. Where such matters are referred to the LPC, the LPC must make a report to the Prime Minister and the Secretary of State which contains the LPC’s recommendations about each such matter (section 5(3)). Section 5(4), in short, requires the Secretary of State, if he decides not to reflect the LPC’s recommendations in the regulations, to explain why in a report which he must lay before both Houses of Parliament.

Section 6(1) gives the Secretary of State power to refer to the LPC, at any time, ‘such matters relating to’ the Act as the Secretary of State thinks fit. The LPC must then make a report to Prime Minister and the Secretary of State, making recommendations about those matters (section 6(2)). If the Secretary of State seeks the LPC’s opinion on a matter listed in section 5(2), and the LPC’s report in response recommends the making of regulations, a similar procedure applies as applies when the first regulations are made (section 6(3)-(4)). Section 7 makes supplementary provision about references to the LPC. Section 8 provides for the appointment of the LPC to ‘discharge the functions conferred or imposed on it’ under the Act.

Section 19C gives a person a right of appeal to the ET against three aspects of a notice of underpayment, on the limited grounds listed in section 19C(4)-(6). If an appeal succeeds under section 19C(1)(a), the ET must rescind the notice. If it succeeds on other grounds, the ET must rectify the notice. Section 21(1)(ga) of the Employment Tribunals Act 1996 gives jurisdiction to the EAT ‘on any question of law arising from any decision of, or arising in any proceedings before an [ET] under or by virtue of -…the National Minimum Wage Act 1998.’

Section 51 makes detailed provision about the making of delegated legislation under the Act (Orders in Council, regulations and orders).