There is no single definition regarding domestic workers treated as family members and thus exempt from the National Minimum Wage

Chamsi-Pasha v Udin (National Minimum Wage) [2011] UKEAT 0070_11_0812 & Julio v Jose UKEAT/0597/10/DM

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• The Reg 2 exemption to the NMW is to be construed narrowly with a holistic approach being taken, no specific factor such as task sharing or accomodation being decisive.
• How the arrangement is arranged and carried out in practise are relevant especially in light of the general treatment and dignity of the worker.
• 'sharing of tasks' is concerned with sharing of family tasks not work done under contract.
• There need be no equivalence between the tasks done by the family and the worker as all families are different (with tasks being divided up differently between Mistreatment/exploitation should lead to losing the NMW exemption ( obiter [ not part of ruling but persuasive ] )

In Chamsi -Pasha & Anor v Udin and Julio & ors v Jose & ors the EAT has ruled on domestic workers who are to be treated as family members and thus subject to the Regulation 2 (2) exemption in the National Minimum Wage Regulations 1999.

HJ SUPPERSTONE has ruled on the application of the National Minimum Wage Regulations 1999 in Pasha & Anor v Udin & Anor (National Minimum Wage) [2011] UKEAT 0070_11_0812. The NATIONAL MINIMUM WAGE ACT 1998 was also considered in a case of alleged unauthorised deductions from wages.

The three claimants were foreign domestic workers working for families in the UK. Their work was judged by the EAT as coming under regulation 2(2) of the National Minimum Wage Regulations 1999 so that the workers are not entitled to be paid the National Minimum Wage.

Regulation 2(2)(a)(ii) applies where a worker is treated as one of the family despite not being related. The exemption in reg. 2(2) is to be construed narrowly and the worker’s place within the family must be considered holistically. Relevant to any decision is the provision of accommodation and meals, tasks and leisure activities are shared and also the general treatment of the domestic worker. Privacy, autonomy and exploitation are all relevant so that is the worker is maltreated then ipso facto she's not being treated as one of the family. This will mean that the regulation 2 exception will not apply and the National Minimum Wage (NMW)will come into play.

Meek compliance (see '*' below) was an issue in the Jose ET decision that the Respondent unlawfully discriminated against the Claimant on grounds of her race regarding unauthorised deductions from wages. The Sinclair Roche and Temperley v Heard [2004] IRLR 763 were applied in deciding the decision was not Meek compliant and the claim was remitted to a new Tribunal.

In Jose the tribunal had jurisdiction to hear a complaint of unlawful deduction of wages because the non-payment of wages was part of a “series” of deductions for the purposes of s.23(3) of the Employment Rights Act 1996. Group 4 Nightspeed Ltd v Gilbert (1997) IRLR 398 was applied in Jose regarding the tribunal's jurisdiction to hear an unlawful deduction of wages complaint where non-payment of wages was part of a series of deductions ( s.23(3) Employment Rights Act 1996 ).

In a case where domestic workers claimed they were entitled to a national minimum wage under the National Minimum Wage Act 1998 the EAT ruled in support of ET rulings that they were not (supporting the ETs' interpretation of Regulation 2(2) of the National Minimum Wage Regulations 1999.

The claimants argued for a narrow interpretation of the exemption as being consistent with public policy to avoid discrimination as badly paid workers are disproportionately women and from ethnic minorities. The First Report of the Low Pay Commission (CMD3976, June 1998) was quoted in support as was Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenberg AG [1975] AC 591 at 647 ).

Harvey on Industrial Relations and Employment Law was also quoted regarding the scope of the family worker exemption whereby:
“The most important element to be satisfied is Reg.2(2)(a)(ii) which provides that it must be shown that ‘the worker is not a member of that family but is treated as such, in particular as regards to the provision of accommodation and meals and the sharing of tasks and leisure activities’. In keeping with the general scheme of the legislation it would appear that this exception should be construed narrowly and particular attention should be paid to ensure that the au pair relationship is not a simple shield for exploitation and that the relevant individual is genuinely being treated as a member of the family unit.”

It was unsuccessfully argued that the right contained in Article 4 of the European Convention on Human Rights prohibiting forced labour should inform the interpretation and application of the exemption. The European Court of Human Rights decision in Siliadin v France [2006] 43 EHRR 16 was cited in support. The argument was that a wide interpretation of the exclusion undermined the obligation to ensure there is no exploitation of vulnerability as per Siliadin and would remove protection from vulnerable usually women who are isolated and economically dependent.

The accepted argument for a narrow interpretation was that "particular regard must be had to the provision of accommodation and meals and the sharing of tasks and leisure activities. Relevant is also the general dignity afforded a domestic worker along with the degree of privacy and autonomy enjoyed as well as whether there is any exploitation involved.

In paragraph 46 the EAT ruled that there does not need to be equivalence regarding the sharing of tasks performed by the worker and the employer/family. Regulation 2(2)(a)(ii) is not interpreted to mean that the worker must share 'all meals, tasks and leisure activities with the family but rather that the worker is treated as a member of the family in those particular respects'.

In paragraph 50 the EAT ruled that a holistic approach must be taken as regards whether a worker was integrated into the family. Where the Claimant is treated as a member of the family regarding accommodation, meals and the sharing of tasks and leisure activities the the Reg.2(2) exemption applies.

The EAT ruled that for all 3 claimant regulation 2(2) applied so that none of them was entitled to be paid the National Minimum Wage.

In Jose's Race Discrimination claim the employment tribunal had found that the Respondent unlawfully discriminated against the Claimant on grounds of her race for making unauthorised deductions from wages.

With Jose's holiday pay claim the respondent's appeal against the tribunal finding that the Claimant was entitled to be compensated for an unlawful deduction of wages was allowed by agreement of the parties.

Nambalat dealt with accrued but untaken leave under regulation 14 of the Working Time Regulations 1998 and for periods of unpaid leave under regulation 16 of the WTR as well as an unlawful deduction from wages claim under the ERA following the principles in HMRC v Stringer [2009] ICR 985 HL. Nambalat’s appeal was allowed and remitted to the same Employment Tribunal for determination.

The EAT decide that the work of all the three Claimants came under regulation 2(2) of the National Minimum Wage Regulations 1999 and as such they were not entitled to be paid the National Minimum Wage.

Cases cited:
Group 4 Nightspeed Ltd v Gilbert [1997];HMRC v Stringer [2009] ICR 985 HL;Arora v Rockwell Automation Ltd UKEAT/0097/06;Sinclair Roche and Temperley v Heard [2004] IRLR 763;Meek v City of Birmingham District Council [1987] IRLR 250;Siliadin v France [2006] 43 EHRR 16 ;Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenberg AG [1975] AC 591 at 647

Meek v City of Birmingham District Council laid down guidlines for an ET to follow when issuing its judgment such as its decision needing to contain an outline of the facts of the case, a summary of the tribunal’s decision regarding the facts and enough reasons so that the parties can understand how the decision was reached.

Meek was incorporated in 2004 into the Employment Tribunal Constitution and Rules of Procedure Regulations 2004 SI 2004/1861 (schedule 1) providing that reasons for a judgment must be given orally (and in writing if within 14 days of a judgment if asked. The Employment Appeal Tribunal has no time limit to request)this.

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