Inland Revenue v BEBB Travel Plc [2003] EWCA Civ 563

Case No A1/2002/1872[2003] EWCA Civ 563
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
Venue Royal Courts of JusticeDate Wednesday 16 th April 2003
Strand,
London, WC2A 2LL
Before
LORD JUSTICE WARDLORD JUSTICE MAYLADY JUSTICE ARDEN
Between
INLAND REVENUE WALES & MIDLANDSAppellantBEBB TRAVEL PLCRespondent
(Transcript of the Handed Down Judgment ofSmith Bernal Wordwave Limited, 190 Fleet StreetLondon EC4A 2AGTel No: 020 7421 4040, Fax No: 020 7831 8838Official Shorthand Writers to the Court)
John Cavanagh QC and Jennifer Eady (instructed by HM Inland Revenue) for AppellantDaniel Oudkerk (instructed by Messrs Dechert) for Respondent
JudgmentAs Approved by the CourtCrown Copyright ©
[1]This is an appeal about the enforcement procedure available under the National Minimum Wages Act 1998. The Employment Tribunal decided in a decision promulgated 11th September 2001 that an enforcement notice served under the Act be rescinded and on 16th August 2002 the Employment Appeal Tribunal upheld that decision. Because the point was thought to be “one of some general significance”, the Employment Appeal Tribunal granted permission to appeal.[2]The Act came into force on 1st April 1999. It gives “workers” the right to be paid at least the national minimum wage as fixed from time to time by the National Minimum Wage Regulations 1999 (“the regulations”). At the time with which we are concerned the minimum wage was £3.60 per hour but it has since risen to £4.20 and will rise again in October to £4.50 an hour. “Worker” is defined by s. 54(3) to mean:- “An individual who has entered into or works under (or, where the employment has ceased, worked under) – (a) a contract of employment; …” One notes that worker thus defined includes the individual whose employment has ceased and for convenience I shall call such a person a “past worker” to distinguish him or her from the individual currently working under a contract of employment (a “present worker”).

(a) a contract of employment; …”

[3]In order to determine whether an individual is being paid the national minimum wage, it is necessary to determine the hourly rate of pay. This is calculated as an average hourly rate in respect of a “pay reference period” which is either one month or, if the worker is paid by reference to a shorter period than a month, that shorter period (reg. 10). Where remuneration is received at some date after the pay reference period during which it was earned, e.g. bonus pay or commission, then the regulations provide that it is to be allocated to the period during which it was earned rather than that when it was received. The regulations provide a detailed set of rules for calculating pay and hours for the purposes of the Act, including detailed rules on how various types of payment are to be treated (regs. 30-37) and as to how different categories of work are to be treated (regs. 15-29A).[4]Employers are under a duty to keep records in respect of each worker for a minimum of three years so as to be able to demonstrate that the worker is being paid at a rate at least equal to the national minimum wage (reg. 38). A right to inspect those records is provided both to the individual worker who suspects that he has not been paid the national minimum wage (s. 10 of the Act) and to an enforcement officer (s. 14). The officers are appointed by the Secretary of State and he has arranged that the Inland Revenue shall provide those officers.[5]These officers are given wide ranging powers. In addition to having the right to inspect records, they may demand that information be given to them and they may even enter premises to exercise those powers. Relevantly for the purpose of this appeal, the officers are given power to issue enforcement notices under s. 19 and if that notice is not complied with then the officer has a power to sue for wages on behalf of the worker (s. 20) or serve a penalty notice (s. 21).[6]The worker is given a range of new rights. Under s. 17 the worker is to be taken to be entitled under his contract to be paid as additional remuneration any shortfall between his contractual wage and the minimum wage. He is able to enforce that right by action taken in the County Court. The worker is also given the right not to suffer detriment (see s. 23) and can enforce that right by proceeding in the Employment Tribunal. Dismissal may be automatically regarded as unfair (s. 25).[7]Just to emphasise the seriousness of this legislation, s. 31 creates an offence for refusing or wilfully neglecting to pay the minimum wage and an employer guilty of the offence is liable to a fine not exceeding level 5 on the standard scale i.e. not exceeding £5,000. In civil proceedings the ordinary burden of proof is reversed because it is presumed that the individual qualifies for the minimum wage unless the contrary is established.[8]Bebb Travel plc (“Bebb”) operates a coach service. It employed stewards and stewardesses on the coaches to carry out various tasks for the company for which they received their basic pay. The actual hourly rate of remuneration calculated in accordance with the regulations was below the applicable hourly rate of national minimum wage. The stewards and stewardesses were, however, allowed by Bebb to provide and sell refreshments on the coach and to retain any profits made from those sales but to bear any losses. They were treated for that purpose as self-employed persons.[9]In February and in May 2000 a national minimum wage compliance officer acting for and on behalf of the Inland Revenue visited Bebb’s premises and examined the wage records. In May 2000 Bebb dismissed all its stewards and stewardesses. It is not suggested in this case that the dismissal was in any way related to the officer’s visits: in fact Bebb had good and proper cause to terminate this arrangement and all the workers were properly paid redundancy in accordance with their rights.[10]The compliance officer visited again in September and having formed the opinion that the workers had not been paid the minimum wage, he issued an enforcement notice under s. 19 of the Act on 6th October 2000. That enforcement notice related to 25 of the former stewards and stewardesses. All had long since ceased to work for Bebb, some for a very long time, for example one lady ended her employment with the company in April 1999. The enforcement notice required the company to pay each of the workers sums due to them under s. 17 of the Act (the difference between the wages received and the minimum wage). The sums due ranged from £26.52 to £4,892.45, the total shortfall being £37,649.43. The company were required to pay that sum by 13th October 2000. The company was informed of its right to appeal but was also informed that failure to comply with the notice might result in the company becoming liable to pay the financial penalty under s. 21 of the Act. That penalty accrued at the rate of £7.40 [sic] in respect of each worker to whom the failure to comply related for each day that the company failed to comply with the whole or part of the notice. The penalties due to date would therefore be in the region of £160,000.[11]Bebb exercised the right of appeal given under the Act and sought an order that the enforcement notice be rescinded. The company contended that the enforcement notice was invalid as it did not relate to any pay reference period for present workers ending on or after the date of service of the notice but only to past pay periods in respect of past workers. The argument depends upon the proper construction of s. 19 of the Act.[12]Section 19 lies at the heart of the appeal. It provides as follows:- “19. Power of officer to issue enforcement notice.(1) If an officer acting for the purposes of this Act is of the opinion that a worker who qualifies for the national minimum wage has not been remunerated for any pay reference period by his employer at a rate at least equal to the national minimum wage, the officer may serve a notice (an “enforcement notice”) on the employer requiring the employer to remunerate the worker for pay reference periods ending on or after the date of the notice at a rate equal to the national minimum wage.(2) An enforcement notice may also require the employer to pay to the worker within such time as may be specified in the notice the sum due to the worker under s. 17 above in respect of the employer’s previous failure to remunerate the worker at a rate at least equal to the national minimum wage.(3) The same enforcement notice may relate to more than one worker (and, where it does so, may be so framed as to relate to workers specified in the notice or to workers of a description so specified).(4) A person on whom an enforcement notice is served may appeal against the notice before the end of the period of four weeks following the date of service of the notice.(5) An appeal under ss. (4) above lies to an Employment Tribunal.(6) On an appeal under ss. (4) above, the Employment Tribunal shall dismiss the appeal unless it is established – (a) that, in the case of the worker or workers to whom the enforcement notice relates, the facts are such that an officer who was aware of them would have had no reason to serve any enforcement notice on the appellant; or (b) where the enforcement notice relates to two or more workers, that the facts are such that an officer who was aware of them would have had no reason to include some of the workers in any enforcement notice served on the appellant; or (c) where the enforcement notice imposes a requirement under ss. (2) in relation to a worker – (i) that no sum was due to the worker under s.17 above; or (ii) that the amount specified in the notice as the sum due to the worker under that section is incorrect; and in this subsection any reference to a worker includes a reference to a person whom the enforcement notice purports to treat as a worker.(7) Where an appeal is allowed by virtue of paragraph (a) of ss. (6) above, the Employment Tribunal shall rescind the enforcement notice.(8) If, in a case where ss. (7) does not apply, an appeal is allowed by virtue of paragraph (b) or (c) of ss. (6) above – (a) the Employment Tribunal shall rectify the enforcement notice; and (b) the enforcement notice shall have effect as if it had originally been served as so rectified.(9) The powers of an Employment Tribunal in allowing an appeal in a case where ss. (8) above applies shall include power to rectify, as the Tribunal may consider appropriate in consequence of its decision on the appeal, any penalty notice which has been served under s. 21 below in respect of the enforcement notice.(10) Where a penalty notice is rectified under ss. (9) above, it shall have effect as if it had originally been served as so rectified.” (1) If an officer acting for the purposes of this Act is of the opinion that a worker who qualifies for the national minimum wage has not been remunerated for any pay reference period by his employer at a rate at least equal to the national minimum wage, the officer may serve a notice (an “enforcement notice”) on the employer requiring the employer to remunerate the worker for pay reference periods ending on or after the date of the notice at a rate equal to the national minimum wage. (2) An enforcement notice may also require the employer to pay to the worker within such time as may be specified in the notice the sum due to the worker under s. 17 above in respect of the employer’s previous failure to remunerate the worker at a rate at least equal to the national minimum wage. (3) The same enforcement notice may relate to more than one worker (and, where it does so, may be so framed as to relate to workers specified in the notice or to workers of a description so specified). (4) A person on whom an enforcement notice is served may appeal against the notice before the end of the period of four weeks following the date of service of the notice. (5) An appeal under ss. (4) above lies to an Employment Tribunal. (6) On an appeal under ss. (4) above, the Employment Tribunal shall dismiss the appeal unless it is established – (a) that, in the case of the worker or workers to whom the enforcement notice relates, the facts are such that an officer who was aware of them would have had no reason to serve any enforcement notice on the appellant; or (b) where the enforcement notice relates to two or more workers, that the facts are such that an officer who was aware of them would have had no reason to include some of the workers in any enforcement notice served on the appellant; or (c) where the enforcement notice imposes a requirement under ss. (2) in relation to a worker – (i) that no sum was due to the worker under s.17 above; or (ii) that the amount specified in the notice as the sum due to the worker under that section is incorrect; (a) the Employment Tribunal shall rectify the enforcement notice; and (b) the enforcement notice shall have effect as if it had originally been served as so rectified.[13]Section 19(2) refers to s. 17. Section 17 provides:- “(1) If a worker who qualifies for the national minimum wage is remunerated for any pay reference period by his employer at a rate which is less than the national minimum wage, the worker shall be taken to be entitled under his contract to be paid, as additional remuneration in respect of that period, the amount described in ss. (2) below. (2) That amount is the difference between –(a) the relevant remuneration received by the worker for the pay reference period; and(b) the relevant remuneration which the worker would have received for that period had he been remunerated by the employer at a rate equal to the national minimum wage. (3) In ss. (2) above, “relevant remuneration” means remuneration which falls to be brought into account for the purposes of regulations under s. (2) above.” (a) the relevant remuneration received by the worker for the pay reference period; and (b) the relevant remuneration which the worker would have received for that period had he been remunerated by the employer at a rate equal to the national minimum wage.[14]It is perhaps necessary to refer to other sections in a little detail. Section 20 gives power to the officer to sue on behalf of the worker:- “(1) If an enforcement notice is not complied with in whole or in part, an officer acting for the purposes of this Act may, on behalf of any worker to whom the notice relates –(a) present a complaint under s. 23(1)(a) of the Employment Rights Act 1996 (Deduction from Worker’s Wages in Contravention of s. 13 of that Act) to an Employment Tribunal in respect of any sum due to the worker by virtue of s. 17 above or …(b) commence other civil proceedings for the recovery, on a claim in contract, of any sums due to the worker by virtue of s. 17 above. (2) The powers conferred by ss. (1) above for the recovery of sums due from the employer to the worker shall not be in derogation of any right which the worker may have to recover such sums by civil proceedings.” (a) present a complaint under s. 23(1)(a) of the Employment Rights Act 1996 (Deduction from Worker’s Wages in Contravention of s. 13 of that Act) to an Employment Tribunal in respect of any sum due to the worker by virtue of s. 17 above or … (b) commence other civil proceedings for the recovery, on a claim in contract, of any sums due to the worker by virtue of s. 17 above.[15]Section 21 provides for a financial penalty for non-compliance. By ss. (1) it gives the officer satisfied that there has been a failure to comply with the enforcement notice power to serve a penalty notice requiring the employer to pay a financial penalty to the Secretary of State. Subsection (3) provides:- “(3) The amount of the financial penalty shall be calculated at a rate equal to twice the hourly rate of the national minimum wage (as in force at the date of the penalty notice) in respect of each worker to whom the failure to comply relates for each day during which the failure to comply has continued in respect of the worker.” There was some confusion about the application of these penalty provisions. Mr John Cavanagh Q.C., who appeared for the Inland Revenue, was minded at first to contend that the penalty related only to the period between the time of failure to pay under the enforcement notice and the time of the penalty notice but he later received instructions from the Inland Revenue confirming that the Inland Revenue were of the view that the penalties would continue to be payable day after day until payment was actually made. It is a view with which I agree. Subsection (8) provides that any sums received by the Secretary of State by virtue of this section shall be paid into the consolidated fund. Mr Cavanagh therefore accepts that this is a penal provision with the consequence that if there are two reasonable constructions to be given to the Act, the court should adopt the more lenient construction. But this applies only where the court is left in real doubt about the true meaning.[16]Mr Daniel Oudkerk, for Bebb, draws our attention to s. 28(1) which provides:- “Where in any civil proceedings any question arises as to whether an individual qualifies or qualified at any time for the national minimum wage, it shall be presumed that the individual qualifies or, as the case may be, qualified at that time for the national minimum wage unless the contrary is established,” (emphasis added).[17]In my judgment it is also necessary to refer closely to some of the definitions. I have already given the definition of “worker”. Section 55(1) provides:- “In this Act, unless the context otherwise requires – “enforcement notice” shall be construed in accordance with s. 19 above; … “person who qualifies for the national minimum wage” shall be construed in accordance with s. 1(2) above; and related expressions shall be construed accordingly;” Section 1(2) provides:- “(2) A person qualifies for the national minimum wage if he is an individual who –(a) is a worker;(b) is working, or ordinarily works, in the United Kingdom under his contract; and(c) has ceased to be of compulsory school age.” Section 1(1) is also relevant as also providing whole raison d’etre for the Act:- “(1) A person who qualifies for the national minimum wage shall be remunerated by his employer in respect of his work in any pay reference period at a rate which is not less than the national minimum wage.” “enforcement notice” shall be construed in accordance with s. 19 above; … “person who qualifies for the national minimum wage” shall be construed in accordance with s. 1(2) above; and related expressions shall be construed accordingly;” (a) is a worker; (b) is working, or ordinarily works, in the United Kingdom under his contract; and (c) has ceased to be of compulsory school age.”[18]The essential findings of the Employment Tribunal were these:- “7. … In our view the wording of s. 19(1) is clear. We can see no ambiguity. The subsection empowers the officer to serve a notice where he is of the opinion that the worker “qualifies” for the national minimum wage. That is in the present. The situation with which this case is concerned does not relate to workers who qualified when the enforcement notice was issued. It relates to past workers who in the past had qualified for the national minimum wage. 8. Also the wording to remunerate “for pay reference periods ending on or after the date of the notice” could hardly be clearer. The empowering subsection is concerned purely with pay reference periods subsisting in the month leading up to the notice or after the notice. In the present case there was no pay reference period subsisting in the month leading up to the date when the notice was served. There had not been one for 4½ months. ….. 10. … Subsection (2) does not empower an officer to serve notice. It merely empowers him to include previous failures in a validly served notice. There is nothing in ss (2) capable of altering the clear meaning of ss (1). It merely adds to it as is clearly indicated by use of “also”, and by reference not to a worker and an employer but “the” worker and “the” employer, who can only be the worker and employer referred to in ss. (1) where the worker “qualifies” in the present.”[19]The Employment Tribunal concluded that Bebb had established that an officer aware of the fact that there had been no pay reference periods for four and a half months prior to the date of the issue of the notice would have had no reason to serve a notice on that date. Accordingly the Tribunal allowed Bebb’s appeal and rescinded the notice.[20]The Appeal Tribunal dismissed the Inland Revenue’s appeal. Theirs was a carefully reasoned judgment delivered by His Hon. Judge J.R. Reid Q.C. He carefully analysed the language and concluded that, although there were oddities in the Act, these did not persuade the Employment Appeal Tribunal that the Employment Tribunal were wrong. One of the oddities of the Act they noted was that an officer bringing civil proceedings could be met by a Limitation Act defence, but the daily penalty under s. 21 for failing to pay the statute barred amount would continue to run until payment. Another oddity was that if there were two workers who were underpaid and one left just before the pay period to which the enforcement notice related, then the notice can require back payments to the one who has stayed on but not to the one who has left. Their conclusion was:- “Subsection (2) provides a summary way of obtaining underpayments for existing workers. It was not intended to enable or require enforcement officers to investigate and initiate recovery proceedings for workers who had long since moved on.”[21]I hope I do justice to Mr Cavanagh’s sustained submissions by summarising them as follows:- i) Section 19(1) is in two parts. The first describes the threshold for its operation, viz. the officer being of the opinion that a worker who qualifies has not received the national minimum wage. If the threshold is met then the second part describes the power the officer may exercise, viz. to serve an enforcement notice requiring the employer to remunerate the worker. ii) He accepts that if s. 19(2) gives a separate power not parasitic upon 19(1), then s. 19(2) must be read as if the first part of s. 19(1) is imported into it. iii) He has to accept that, because s. 19(1) is concerned with the requirement that the employer remunerate the worker for a pay reference period which ends on or after the date of the notice, it must necessarily therefore contemplate payment to a worker who is in employment at the time of that pay reference period, i.e. a present worker. Nevertheless he submits it can (not necessarily must) also be construed to refer to workers who have ceased to be employed. Section 19(1) does look back because it contemplates the power to issue enforcement notices being given in respect of past failures to pay the minimum wage in that: a) “has not been remunerated” contemplates a past event, b) “for any pay reference period” (emphasis added) makes it plain that the operation of the subsection is not confined to present and/or future pay reference periods, and must be capable of referring to past periods; c) in any event it may not be possible to determine that there has been a failure to pay the minimum wage in respect of a current period if, as is possible, part of the remuneration is to be made in the future, for example, by way of a bonus. The officer would in those circumstances have to be looking back at past performance. iv) “Worker” as defined in s. 54(3) includes a worker whose employment has ceased and so the worker who qualifies must include the past worker. v) “Qualifies” has a timeless effect so that it can include: a) those currently employed where a current failure to pay can be demonstrated, b) those currently employed where a past failure only can be shown and who were qualified at that time in the past, and also c) those no longer qualified at present but who were qualified at some time in the past. vi) Even though his construction strains the natural meaning of the words, it is not an impossible construction: compare the way the House of Lords construed the words “is suffering … significant harm” in s. 31(2) of the Children Act 1989 and decided that in that instance “is” means “was”: In Re M (A Minor) (Care Orders: Threshold Conditions) [1994] 2 A.C. 424. vii) Section 19(2) is not dependent upon the power to issue the enforcement notice provided by s. 19(1). If it were, s. 19(2) would read “the enforcement notice” not “an enforcement notice”. viii) If s. 19(2) was intended to be parasitic, the legislature would have said, “an enforcement notice under s. 19(1)” or words to that effect to make the position clear. ix) “May also” are permissive words which do not connote any necessary dependency upon s. 19(1). “Also” for this purpose means “further, in addition, besides, too”. Section 19(2) should be read in the sense that besides the circumstances which might apply under s. 19(1) an enforcement notice may be issued in the circumstances envisaged by s. 19(2). As the skeleton argument puts it, ““I may run and I may also jump” does not imply that the two actions must be carried out simultaneously or that one is necessarily dependent upon the other”. x) “The employer” and “the worker” in s. 19(2) refer not to the employer and the worker described in s. 19(1) but to the employer and worker under s. 17. xi) The language of s. 19(1) and (2) is at least ambiguous. A construction should therefore be given which best gives effect to the purpose of the Act. xii) Even if, as he concedes, the enforcement provisions of s. 19 and 21 are penal in their effect, the court must still adopt a purposive approach notwithstanding a strained meaning to the language results. See the approach adopted in Attorney-General’s Reference (No. 1 of 1988) [1989] 1 A.C. 971. xiii) The purpose is to protect a vulnerable body of workers especially those in the “fringe economy”. These workers being vulnerable through lack of knowledge of their rights, impecuniosity, or the sheer disadvantage of the misfortune of being menial, the reservation to them of a right to issue proceedings themselves is an insufficient protection. That is the mischief which is cured by providing an independent enforcement procedure taken by a third party. That protects the underpaid workers from being victimised in one way or another, for example, by dismissal or refusal to re-engage or from the reluctance of a new employer to engage a known “troublemaker”. Past workers are just as entitled to protection as present workers. xiv) The Employment Appeal Tribunal’s construction produced the recognised “oddity” that an unscrupulous employer – and there is no suggestion whatever in this case that the respondent is an unscrupulous employer – can evade the consequences of an enforcement notice by sacking their workers as soon as enquiries by an enforcement officer create the obvious risk that notice will follow in due course.[22]Mr Oudkerk submits:- i) Section 19(1) clearly contemplates operation in respect of current workers and s. 19(1) cannot apply to former workers. ii) “Qualifies” in the clause “a worker who qualifies” is expressed in the present tense. The present tense is appropriate for s. 19(1). The words mean what they say. Where the legislature wished to refer to a worker who was qualified, the Act says so – see s. 28. iii) Since s. 19(1) defines an “enforcement notice”, the words “an enforcement notice” in s. 19(2) must refer to the same enforcement notice contemplated by s. 19(1). The exercise of the power must be as prescribed by s. 19(1) which is confined to current workers. iv) “The employer” and “the worker” in s. 19(2) also refer back to s. 19(1). v) In the phrase “may also require”, “also” means in addition to the requirements capable of being imposed under s. 19(1). vi) Since the obligation under the enforcement notice is to pay remuneration to the worker, the appellant’s construction would place a potentially impossible burden on the employer where the workers have disappeared, especially if, as is the case, there is no time limit for the issue of the enforcement notice and so steps can, at least in theory, be taken years after the cessation of employment and even years after the obligation to keep records has expired. vii) No statutory purpose can be divined for s. 19(1) and (2). viii) The former employee is not without his remedy: he or she can sue in the County Court. ix) Workers who suffer “detriment” are given rights under s. 23 to 25.[23]I start with s. 19(1). I agree that the first part sets out what conditions must exist to give the officer the power to serve the enforcement notice. He must be of the opinion that “a worker who qualifies for the national minimum wage” has not been properly remunerated “for any pay reference period”. Use of the present tense in “qualifies” was deliberate: where the draughtsman wished to distinguish between the present tense and the past tense, he was capable of making the distinction explicit – see s. 28. There is a further indication that the present tense is intended. The clause “a worker who qualifies for the national minimum wage” is defined in s. 55 which refers back to s. 1(2). That too is couched in the present tense – “a person qualifies … if he is an individual who is a worker” (emphasis added). Because the whole clause is defined the defined meaning must prevail and it cannot, in my judgment, be permissible to take the word “worker” out of the clause and give it the different meaning conferred by s. 54(3). Construed in its context – “a worker who qualifies” – it makes no sense to say that an individual is a qualifying worker when he is in fact a past worker.[24]The emphasis on the present is confirmed by the second part of s. 19(1) which sets out the terms of the enforcement notice the officer is empowered to serve. That enforcement notice may require the employer to remunerate the worker “for pay reference periods ending on or after the date of the notice”, i.e., to require payment of the minimum wage for the current and future period. Current and future pay periods can only relate to present workers. They cannot be made to apply to past workers. The view of the Employment Tribunal was correct.[25]As for s. 19(2), I accept Mr Cavanagh’s point that any dependence upon s. 19(1) would have been clear if s. 19(2) had referred to “the enforcement notice”, as opposed to “an enforcement notice”. “An enforcement notice” by itself more naturally suggests some notice other than the notice referred to in ss. (1). Mr Cavanagh accepts, however, and he is right to accept, that this is but one straw in the wind. Other straws are blown more strongly in the opposite direction. The employment notice under s. 19(2) may also require “the employer to pay to the worker” the sums due. If s. 19(2) was freestanding, it is impossible to know who that employer and that worker is. The more natural meaning is then they are the employer and worker referred to in ss. (1), leading to the conclusion that the enforcement notice referred to in ss. (2) is the same enforcement notice referred to in ss. (1).[26]Then there is the reference to “the sum due to the worker under s. 17 above”. Section 17 applies to “a worker who qualifies for the national minimum wage”, which brings in s. 55 and s. 1(2), and, for the reasons already given, this is a reference to a present worker, not a past worker.[27]The dependency of ss. (2) on ss.(1) is to my mind conclusively demonstrated by permitting the enforcement notice “also” to require the employer to pay up for his past failures to remunerate properly. The ordinary natural meaning of “also” is “in addition”. Under ss. (1) present and future payments of the national minimum wage can be required in respect of a present worker and under ss.(2) past payments can also be required to be paid, i.e. past in addition to present and future.[28]In my judgment there is a problem with the appellant’s contention that “also” means “besides” in the sense that if “besides” the enforcement notice issued under s. 19(1), a “further” – and necessarily different – enforcement notice can be issued under s. 19(2). The problem, as it seems to me, is that if s. 19(2) is independent of s. 19(1) then there is no indication in the language of s. 19(2), read in isolation, of the threshold that has to be crossed before the notice can be issued. “Enforcement notice” is a defined phrase and s. 55 requires it to be construed in accordance with s. 19. Section 19(1) contains the real clue because in s. 19(1) the notice which the officer is empowered to serve is given a special meaning – “the officer may serve a notice (an “enforcement notice”)”. Consequently “an enforcement notice”, whether for the purpose of ss.(1) or ss.(2) is the notice the officer may serve if he is of the opinion that the worker is a worker who qualifies. We are back to the present tense and to the restriction explicit in ss. (1) that “ an enforcement notice” can only relate to a present worker not a past worker.[29]Subsection 4 gives a person on whom an enforcement notice is served – which must include an enforcement notice served under ss. (2), the right to appeal against “the notice”. On an appeal the Employment Tribunal shall dismiss the appeal unless it is established under ss. (6)(a) that in the case of the worker to whom the enforcement notice relates, the facts are such that an officer who was aware of them would have no reason to serve any enforcement notice on the appellant. So the enforcement notice served under s. 19(2) is to be judged against the facts of which the officer should have been aware. This must be a reference to the threshold requirement in s. 19(1) that he be of the opinion that there is a worker who qualifies for the national minimum wage and that that worker is not being properly remunerated. Everything points to the precondition for the service of the notice set by ss. (1) being carried into ss. (2). It is all one of a piece.[30]Mr Cavanagh has to accept that some preconditions have to be implied into ss. (2) and he concedes that the first part of ss. (1) must be implied into ss. (2). As soon as he does that, his case is dead. If, for reasons I have set out, the worker who qualifies for ss. (1) purposes is and can only be a present worker, then it seems to me impossible when construing the word “qualifies” if imported into ss. (2), to mean “qualified”. The same word cannot mean different things in one section of the Act.[31]In the result I am in no doubt about the meaning to be given to s. 19. A valid enforcement notice can only relate to present workers in respect of present and future wages – ss. (1) – and also, if appropriate, their past wages – ss. (2). There is no power to issue an enforcement notice in respect of past workers for past pay.[32]Because I am not in doubt as to the meaning, I do not need to gauge in the tortuous attempt to find a particular purpose for s. 19(1) and s. 19(2). This is an Act “to make provision for and in connection with a national minimum wage”. Its purpose is obvious in the sense that the Act is there to boost the wages of a menial group who are inevitably disadvantaged and vulnerable to exploitation. They are likely to be unable easily to assert their rights and a proper purpose of the Act is undoubtedly to enable enforcement to be taken by an independent officer on their behalf. I find it impossible, however, to identify any particular mischief which so afflicts past workers that any ambiguity in s. 19 would have to be construed to include them. Mr Oudkerk convinces me that an employer could be placed at such severe disadvantage if years after the event he is required to pay past workers, often itinerant workers, when he would have no idea where they are nor the means ever to find them. Yet if he does not pay he is subject to penalties. That would be an odd state of affairs. A scheme to assist the current workforce works no injustice. These are, however, idle musings on my part. I could not divine a specific purpose if I had to, but fortunately I do not have to try.[33]I do not know if I am entitled to derive wry amusement from the fact, or whether I should imply ignore the fact, that there is already a Bill before Parliament which will introduce an amendment to s. 19 by inserting the following:- “(2A) If an officer acting for the purposes of this Act is of the opinion that a worker who has at any time qualified for the national minimum wage has not been remunerated for any pay reference period (whether ending before or after the coming into force of this subsection) by his employer at a rate at least equal to the national minimum wage, the officer may serve on the employer an enforcement notice which imposes a requirement under ss. (2) above in relation to the worker, whether or not a requirement under ss. (1) above is, or may be, imposed in relation to that worker (or any other worker to whom the notice relates). (2B) An enforcement notice may not impose a requirement under ss. 2 above in respect of any pay reference period ending more than six years before the date on which the notice is served.”[34]That seems clear enough. It is as if the Employment Tribunal had marked the Parliamentary draftsman’s essay and suggested he should try again. But I should not tease. All I should do is dismiss the appeal.[35]I agree that this appeal should be dismissed for the reasons given by Ward LJ, whose account of the facts and circumstances of this appeal I gratefully adopt. I agree that the Employment Appeal Tribunal reached the correct conclusion for the correct reasons. I record briefly in my own words my reasons for rejecting Mr Cavanagh’s submission that section 19(2) of the National Minimum Wage Act 1998 should be construed as empowering a free-standing enforcement notice.[36]Section 19 of the 1998 Act provides:
“(1) If an officer acting for the purposes of this Act is of the opinion that a worker who qualifies for the national minimum wage has not been remunerated for any pay reference period by his employer at a rate at least equal to the national minimum wage, the officer may serve a notice (an “enforcement notice”) on the employer requiring the employer to remunerate the worker for pay reference periods ending on or after the date of the notice at a rate equal to the national minimum wage. (2) An enforcement notice may also require the employer to pay to the worker within such time as may be specified in the notice the sum due to the worker under section 17 above in respect of the employer’s previous failure to remunerate the worker at a rate at least equal to the national minimum wage.”
[37]The respondents contend and the Employment Appeal Tribunal held that the requirement in section 19(2) could only be made in an enforcement notice served under section 19(1). The Inland Revenue contend that section 19(2) empowers the service of an independent enforcement notice, relating to a worker no longer employed by an employer, requiring the former employer to pay to the worker a sum due to the worker for the employer’s previous failure to remunerate the worker at a rate at least equal to the national minimum wage. Mr Cavanagh accepts that this requires a strained construction of sections 19(1) and (2). But he submits that his strained construction should be adopted so as not to defeat what he maintains is the purpose of the legislation.[38]In my judgment, the construction for which the respondent contends is plainly correct. I do not consider that Mr Cavanagh’s construction can be strained even as a possible construction of the two sub-sections read in the context of the statute as a whole. In addition, the purpose for which Mr Cavanagh needs to contend is not, in my view, apparent from the statute itself and there is no external material from which that purpose can be gleaned. The general purpose of the statute is obvious, that is to require employers to pay their workers remuneration at a rate which is not less than the national minimum wage. Section 19 is however concerned with enforcement. It is one only of four possible means of enforcement. Mr Cavanagh’s purpose has to be that parliament intended that an enforcement officer should be able to serve an enforcement notice in relation to past failures by an employer in relation to workers who had ceased to be employed by the employer when the enforcement notice is served. Mr Cavanagh gave an array of possible reasons why this may have been parliament’s purpose. But in my view the parliamentary purpose may equally have been that enforcement notices should mainly be used to require employers to comply with the legislation in relation to their existing employees for the future. There would then be sense in enabling an enforcement notice for that first purpose also to address past failures. Just as Mr Cavanagh had reasons why the purpose for which he contended might have been the parliamentary intention, so Mr Oudkerk, counsel for the respondents, pointed to the penal nature of these provisions and employers’ difficulties in complying with an enforcement notice for past failures relating to workers who had long since left and might be difficult to trace. In my view, Mr Cavanagh’s purpose assumes the construction of the section for which he contends. There is no other material from which that purpose could be derived.[39]It is accepted that the enforcement notice in section 19(1) has to relate to an existing worker, because it has to require the employer to remunerate the worker at a rate equal to the national minimum wage for pay reference periods ending on or after the date of the notice. This also, in my view, derives from the expression “a worker who qualifies for the national minimum wage”. As Ward LJ pointed out during the hearing, that expression is defined in section 55 so that it is to be construed in accordance with section 1(2). Section 1(2) defines a person who qualifies for the national minimum wage as an individual who is a worker. Mr Cavanagh struggled to extricate himself from the present tense use of “qualifies” in section 19(1). He did not in my view succeed. Section 28(1), in using the expression “whether an individual qualifies or qualified”, shows that this statute refers to past qualification when it intends to do so. I accept Mr Cavanagh’s submission that the trigger for service of an enforcement notice under section 19(1) has to be a past failure to remunerate the worker at a rate at least equal to the national minimum wage. But that derives, not from a strained meaning of the word “qualifies”, but from the natural meaning of the succeeding words “has not been remunerated for any pay reference period by his employer at a rate at least equal to the national minimum wage”.[40]There are the following additional clear indications in favour of the respondents’ construction. Section 19(1) defines “enforcement notice” as a notice requiring the employer to remunerate the worker for pay reference periods ending on or after the date of the notice at a rate equal to the national minimum wage. The expression thus defined has to have the defined meaning when it appears in section 19(2). The use of the definite article for “the employer” and “the worker” in section 19(2) plainly refer back to “a worker” and “his employer” in section 19(1). Mr Cavanagh’s attempt to take these definite articles back to section 17 was not remotely persuasive. The expression “may also” connotes that a section 19(1) enforcement notice may also deal with previous failures to remunerate the worker at a rate at least equal to the national minimum wage. These words in their context do not relate to a free-standing enforcement notice independent of a notice under section 19(1). If that had been the intention, the structure of the material now in two sub-sections would naturally have been different. The two different kinds of enforcement notice would naturally have been subordinated grammatically to a single introductory expression.[41]For these reasons, in my judgment the respondents’ construction of these sub-sections is plainly correct.[42]For the reasons given below, I agree that section 19(2) is supplemental to section 19(1) and that accordingly the powers conferred by the former subsection can only be used where the enforcement notice also satisfies section 19(1).[43]In my judgment, an enforcement notice can be served under section 19(1) only if the officer forms the requisite opinion about a person who is then a worker in relation to the employer on whom it is proposed to serve the enforcement notice. This follows from the fact that under section 19(1) the worker must be a person “who qualifies for the national minimum wage”. The use of the present tense is clear and can be contrasted with the use of the words “qualifies or qualified at any time for the national minimum wage” in section 28(1). Under section 19(1) the question whether the worker also had to be qualified at the date he was remunerated below the required rate is left silent. If he is required also to be qualified at that date, the requirement is implicit and is not to be found in the word “qualifies”, which is plainly in the present tense.[44]Furthermore, an enforcement notice for the purpose of the opening clause of section 19(2) is defined by section 19(1). It is “a notice … on the employer requiring the employer to remunerate the worker for pay reference periods ending on or after the date of the notice at a rate equal to the national minimum wage”. (see section 19(1)). This demonstrates that section 19(2) cannot confer a free-standing power to serve an enforcement notice. The use of the definite article “the” with the words “employer” and “worker” support the conclusion that the employer and worker have just been identified, that is in section 19(1) and not (as submitted) in section 17. In addition, my preferred construction gives the word “also” in section 19(2) its normal meaning. It confers one option and one option only: that of adding a stipulation about past defaults to the enforcement notice dealing with the future. It does not provide an alternative approach. On the appellant’s construction, the word “also” has to mean “further or alternatively”.[45]Moreover, Mr Cavanagh QC, for the appellants, accepts that even if section 19(2) is a free-standing power the officer must still be of the opinion described in the opening words of section 19(1). However, he goes on to submit that, under that requirement as it applies to section 19(1), it must be the officer’s opinion that “a worker who qualified for the national minimum wage has not been remunerated” for the relevant period at the appropriate rate. It need hardly be observed that it would be odd, if section 19(2) is a free-standing provision, for it to be silent about the essential pre-condition of its operation, especially if that pre-condition has not only to be imported from section 19(1) but modified. I am not disposed to accept the submission which confers on the word “qualifies” such chameleon-like character. In particular, I do not accept Mr Cavanagh’s submission that it is a word of “universal tense” (whatever that may mean) or that (in the alternative) the true construction of “qualifies” in section 19(1) is “qualified”.[46]I do not consider the conclusion that section 19(2) is not free-standing to be absurd as the appellants submit. It was open to Parliament to determine that the class of low paid workers who would benefit from section 19 should not be the whole class of such persons, but only a limited part of such class, principally current employees. Such an approach could not be said to be irrational: on the contrary it would be consistent with a policy of placing a limit on the need for the public resources to be devoted to the service of enforcement notices and the taking of steps under section20. Such a policy is also supported by the absence of time limits in sections 19 and21. It would also afford some practical recognition of the difficulties for an employer in maintaining records and tracing past employees in order to make shortfall payments to them. There is certainly nothing in the 1998 Act to compel the conclusion that Parliament must have intended that the whole class should benefit, and in my judgment the appellant would show that to establish that it was right to depart from the plain meaning of section 19 so as to make section 19(2) a free-standing power.[47]I have reached the above conclusion simply be interpreting section 19 in the context of the National Minimum Wage Act 1998. For my part, I do not find it necessary to apply any presumption against the appellants’ construction. It is enough, in my view, to give section 19 its fair interpretation.

Order

Appeal dismissed with costs assessed at £9,420 to be paid within 14 days of today. (Order does not form part of the approved judgment)