Intellidigest v Commissioners for Revenue and Customs: 4100575/2025
EMPLOYMENT TRIBUNALS (SCOTLAND)
Case No 4100575/2025, 8000213/2025Venue EdinburghHearing 30 September 2025
Between
IntellidigestClaimantCommissioners for Revenue and CustomsRespondent
Before
Employment Judge A JonesDate 15 October 2025
JUDGMENT
The appeal is dismissed on the basis that it has no reasonable prospects of success in terms of Rule 38(1)(a) Employment Tribunal Rules 2024.
REASONS
[1]The appellant lodged an appeal against a notice of underpayment issued under the National Minimum Wage Act 1998 on 31 March 2025. The appeal was lodged on the basis that the requirement imposed by the Notice to pay a penalty was incorrect because 1) directions made by the Secretary of State prevent the imposition of a penalty and/or 2) the amount of the penalty was incorrectly calculated. 8000213/2025[2]A revised notice of underpayment was served on the appellant on 4 June 2025. The appellant confirmed that the appeal was insisted upon. The respondent made an application that the appeal be struck out on the basis that it had no reasonable prospect of success in terms of Rule 38(1)(a) Employment Tribunal Rules 2024. The application was made on the basis that the appeal was lodged only in relation to section 19C(1)(c) National Minimum Wage Act and that there was no discretion in relation to the imposition of a financial penalty and that the appellant had not set out any valid grounds of appeal.[3]The appellant was required by the Tribunal to set out the basis on which it was said that the grounds of appeal made out any valid ground of appeal in terms of section 19C(1)(c). The appellant sent an email on 29 August 2025 in response which set out what was said to be four grounds of appeal: that there was discretion on the part of the Tribunal under section 12A Employment Tribunals Act 1996, there was an absence of aggravating features, there were mitigating circumstances and the ground of proportionality and fairness.[4]The respondent made oral submissions at the hearing, and the appellant was invited to respond which she did briefly. Discussion and decision[5]Section 19A of the National Minimum Wage Act provides for a financial penalty to be specified in a notice of underpayment and that the amount should be 200% of the underpayment subject to a maximum of £20,000 for any worker.[6]In the present case the penalty charge due (after revisions) is £4,955.76.[7]Section 19C sets out the basis on which an appeal can be made against any requirement to pay a financial penalty. Section 19C(6) sets out two potential grounds of appeal:(a) that the notice was served in circumstances specified in a direction under section 19A(2) above, or(b) that the amount of the financial penalty specified in the notice of underpayment has been incorrectly calculated (whether because the notice is incorrect in some of the particulars which affect that calculation or for some other reason).[8]Section 19A(2) provides that the Secretary of State may by direction specify circumstances in which a notice of underpayment is not to impose a financial penalty. I was referred to the directions made by the Secretary of State. The guidance was included in the bundle of documents which had been lodged by the respondent, and which had been provided to the appellant. The guidance indicated that the three directions had been made. The first was that a penalty should not be imposed where an employer had followed written or published guidance from a government department and that guidance was incorrect. In those circumstances, the employer would have to demonstrate that they had sought the guidance, obtained it, correctly followed it and a compliance officer 8000213/2025 be of the view that the guidance was incorrect. The appellant had not produced or referred to any such guidance in the appeal or in submissions before the Tribunal. The second direction was that a financial penalty should not be imposed where misleading guidance regarding the National Minimum Wage payable where a worker is entitled to sleep had been followed. No suggestion was made by the appellant that this was applicable. The third direction related to cases where underpayments had arisen as a consequence of certain employer deductions from pay. Again, no suggestion was made that this was applicable in the present case.[9]Moreover, there nothing said by the appellant to suggest that the penalty had been incorrectly calculated. Indeed, it was accepted that it had been correctly calculated. The formula is straightforward in that it is 200% of the underpayment. It seemed to the Tribunal the penalty had been correctly calculated, and it was not suggested otherwise.[10]The appeal appeared to be based on the argument that the appellant had sought to do everything properly, that the schemes under which the relevant workers had been employed had ended and therefore it would not be possible to reclaim the sums due and that there were mitigating circumstances in that a bereavement suffered by Dr Kanu had meant that she could not focus on the running of the company for a period between 2024 and 2025.[11]I explained to Dr Kanu, that the Tribunal’s jurisdiction to uphold an appeal was limited to that set out in statute and the directions of the Secretary of State.[12]In the circumstances, I was satisfied that no stateable grounds of appeal had been advanced in terms of section 19C of the National Minimum Wage Act and that therefore the appeal was bound to fail.[13]Therefore I was of the view that as no stateable ground of appeal had been advanced, that the appellant had been given a further opportunity to set out on what basis the Tribunal could potentially uphold an appeal and had failed do so in that section 12A of the Employment Tribunals Act was not relevant to the determination of an appeal of this nature, that it would be in keeping with the overriding objective and proportionate for the case to be struck out in terms of Rule 38(1) of the Employment Tribunal Rules 2024.