An Act to make provision for and in connection with a national minimum wage; to provide for the amendment of certain enactments relating to the remuneration of persons employed in agriculture; and for connected purposes.
[31st July 1998]
Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
Entitlement
to the national minimum wage
1-
Workers
to be paid at least the national minimum wage
(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.
(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.
(3)
The national
minimum wage shall be such single hourly rate as the Secretary
of State may from time to time prescribe.
(4)
For the purposes
of this Act a “pay reference period” is such period
as the Secretary of State may prescribe for the purpose.
(5)
Subsections
(1) to (4) above are subject to the following provisions of
this Act.
Regulations
relating to the national minimum wage
2-
Determination
of hourly rate of remuneration
(1)
The Secretary
of State may by regulations make provision for determining what
is the hourly rate at which a person is to be regarded for the
purposes of this Act as remunerated by his employer in respect
of his work in any pay reference period.
(2)
The regulations
may make provision for determining the hourly rate in cases
where—
(a)
the
remuneration, to the extent that it is at a periodic rate, is
at a single rate;
(b)
the
remuneration is, in whole or in part, at different rates applicable
at different times or in different circumstances;
(c)
the
remuneration is, in whole or in part, otherwise than at a periodic
rate or rates;
(d)
the
remuneration consists, in whole or in part, of benefits in kind.
(3)
The regulations
may make provision with respect to—
(a)
circumstances
in which, 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 to be so treated;
(b)
the
treatment of periods of paid or unpaid absence from, or lack
of, work and of remuneration in respect of such periods.
(4)
The provision
that may be made by virtue of paragraph (a) of subsection (3)
above includes provision for or in connection with—
(a)
treating
a person as, or as not, working for a maximum or minimum time,
or for a proportion of the time, in any period;
(b)
determining
any matter to which that paragraph relates by reference to the
terms of an agreement.
(5)
The regulations
may make provision with respect to—
(a)
what
is to be treated as, or as not, forming part of a person’s
remuneration, and the extent to which it is to be so treated;
(b)
the
valuation of benefits in kind;
(c)
the
treatment of deductions from earnings;
(d)
the
treatment of any charges or expenses which a person is required
to bear.
(6)
The regulations
may make provision with respect to—
(a)
the
attribution to a period, or the apportionment between two or
more periods, of the whole or any part of any remuneration or
work, whether or not the remuneration is received or the work
is done within the period or periods in question;
(b)
the
aggregation of the whole or any part of the remuneration for
different periods;
(c)
the
time at which remuneration is to be treated as received or accruing.
(7)
Subsections
(2) to (6) above are without prejudice to the generality of
subsection (1) above.
(8)
No provision
shall be made under this section which treats the same circumstances
differently in relation to—
(a)
different
areas;
(b)
different
sectors of employment;
(c)
undertakings
of different sizes;
(d)
persons
of different ages; or
(e)
persons
of different occupations.
3-
Exclusion
of, and modifications for, certain classes of person
(1)
This section
applies to persons who have not attained the age of 26.
(2)
The Secretary
of State may by regulations make provision in relation to any
of the persons to whom this section applies—
(a)
preventing
them being persons who qualify for the national minimum wage;
or
(b)
prescribing
an hourly rate for the national minimum wage other than the
single hourly rate for the time being prescribed under section
1(3) above.
(3)
No provision
shall be made under subsection (2) above which treats persons
differently in relation to—
(a)
different
areas;
(b)
different
sectors of employment;
(c)
undertakings
of different sizes; or
(d)
different
occupations.
(4)
If any description
of persons who have attained the age of 26 is added by regulations
under section 4 below to the descriptions of person to whom
this section applies, no provision shall be made under subsection
(2) above which treats persons of that description differently
in relation to different ages over 26.
4-
Power
to add to the persons to whom section 3 applies
(1)
The Secretary
of State may by regulations amend section 3 above by adding
descriptions of persons who have attained the age of 26 to the
descriptions of person to whom that section applies.
(2)
No amendment
shall be made under subsection (1) above which treats persons
differently in relation to—
(a)
different
areas;
(b)
different
sectors of employment;
(c)
undertakings
of different sizes;
(d)
different
ages over 26; or
(e)
different
occupations.
The Low Pay
Commission
5-
The
first regulations: referral to the Low Pay Commission
(1)
Before making
the first regulations under section 1(3) or (4) or 2 above,
the Secretary of State shall refer the matters specified in
subsection (2) below to the Low Pay Commission for their consideration.
(2)
Those matters
are—
(a)
what
single hourly rate should be prescribed under section 1(3) above
as the national minimum wage;
(b)
what
period or periods should be prescribed under section 1(4) above;
(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;
(d)
whether
any, and if so what, provision should be made under section
3 above; and
(e)
whether
any, and if so what, descriptions of person should be added
to the descriptions of person to whom section 3 above applies
and what provision should be made under that section in relation
to persons of those descriptions.
(3)
Where matters
are referred to the Low Pay Commission under subsection (1)
above, the Commission shall, after considering those matters,
make a report to the Prime Minister and the Secretary of State
which shall contain the Commission’s recommendations about
each of those matters.
(4)
If, following
the report of the Low Pay Commission under subsection (3) above,
the Secretary of State decides—
(a)
not
to make any regulations implementing the Commission’s
recommendations, or
(b)
to
make regulations implementing only some of the Commission’s
recommendations, or
(c)
to
prescribe under section 1(3) above a single hourly rate which
is different from the rate recommended by the Commission, or
(d)
to
make regulations which in some other respect differ from the
recommendations of the Commission, or
(e)
to
make regulations which do not relate to a recommendation of
the Commission,
the Secretary
of State shall lay a report before each House of Parliament
containing a statement of the reasons for the decision.
(5)
If the Low
Pay Commission fail to make their report under subsection (3)
above within the time allowed for doing so under section 7 below,
any power of the Secretary of State to make regulations under
this Act shall be exercisable as if subsection (1) above had
not been enacted.
6-
Referral
of matters to the Low Pay Commission at any time
(1)
The Secretary
of State may at any time refer to the Low Pay Commission such
matters relating to this Act as the Secretary of State thinks
fit.
(2)
Where matters
are referred to the Low Pay Commission under subsection (1)
above, the Commission shall, after considering those matters,
make a report to the Prime Minister and the Secretary of State
which shall contain the Commission’s recommendations about
each of those matters.
(3)
If on a referral
under this section—
(a)
the
Secretary of State seeks the opinion of the Low Pay Commission
on a matter falling within section 5(2) above,
(b)
the
Commission’s report under subsection (2) above contains
recommendations in relation to that matter, and
(c)
implementation
of any of those recommendations involves the exercise of any
power to make regulations under sections 1 to 4 above,
subsection
(4) of section 5 above shall apply in relation to the report,
so far as relating to the recommendations falling within paragraph
(c) above, as it applies in relation to a report under subsection
(3) of that section.
(4)
If on a referral
under this section—
(a)
the
Secretary of State seeks the opinion of the Low Pay Commission
on any matter falling within section 5(2) above, but
(b)
the
Commission fail to make their report under subsection (2) above
within the time allowed under section 7 below,
the Secretary
of State may make regulations under sections 1 to 4 above as
if the opinion of the Commission had not been sought in relation
to that matter.
7-
Referrals
to, and reports of, the Low Pay Commission: supplementary
(1)
This section
applies where matters are referred to the Low Pay Commission
under section 5 or 6 above.
(2)
The Secretary
of State may by notice require the Low Pay Commission to make
their report within such time as may be specified in the notice.
(3)
The time
allowed to the Low Pay Commission for making their report may
from time to time be extended by further notice given to them
by the Secretary of State.
(4)
Before arriving
at the recommendations to be included in their report, the Low
Pay Commission shall consult—
(a)
such
organisations representative of employers as they think fit;
(b)
such
organisations representative of workers as they think fit; and
(c)
if
they think fit, any other body or person.
(5)
In considering
what recommendations to include in their report, the Low Pay
Commission—
(a)
shall
have regard to the effect of this Act on the economy of the
United Kingdom as a whole and on competitiveness; and
(b)
shall
take into account any additional factors which the Secretary
of State specifies in referring the matters to them.
(6)
The report
of the Low Pay Commission must—
(a)
identify
the members of the Commission making the report;
(b)
explain
the procedures adopted in respect of consultation, the taking
of evidence and the receiving of representations;
(c)
set
out the reasons for their recommendations; and
(d)
if
the Secretary of State has specified any additional factor to
be taken into account under subsection (5)(b) above, state that
they have taken that factor into account in making their recommendations.
(7)
The Secretary
of State shall—
(a)
lay
a copy of any report of the Low Pay Commission before each House
of Parliament; and
(b)
arrange
for the report to be published.
(8)
In this section—
“recommendations”
means the recommendations required to be contained in a report
under section 5(3) or 6(2) above, as the case may be;
“report”
means the report which the Low Pay Commission are required to
make under section 5(3) or 6(2) above, as the case may be, on
the matters referred to them as mentioned in subsection (1)
above.
8-
The
Low Pay Commission
(1)
Subject to
the following provisions of this section, the body which is
to be regarded for the purposes of this Act as being the Low
Pay Commission is the non-statutory Low Pay Commission.
(2)
In this Act
“the non-statutory Low Pay Commission” means the
unincorporated body of persons known as “the Low Pay Commission”
which was established by the Secretary of State after 1st May
1997 and before the passing of this Act for the purpose of making
recommendations relating to the establishment, application and
operation of a national minimum wage.
(3)
The referral
by the Secretary of State to the non-statutory Low Pay Commission
at any time before the coming into force of this Act of matters
(however described) corresponding to those specified in subsection
(2) of section 5 above shall be treated as the referral required
by subsection (1) of that section unless the Secretary of State
otherwise determines.
(4)
The referral
by the Secretary of State to the non-statutory Low Pay Commission
at any time before or after the coming into force of this Act,
but before the appointment of the body mentioned in subsection
(9) below, of matters other than those mentioned in subsection
(3) above shall be treated as a referral under section 6(1)
above unless the Secretary of State otherwise determines.
(5)
The report
of the non-statutory Low Pay Commission (whether made before
or after the coming into force of this Act) to the Prime Minister
and the Secretary of State containing the Commission’s
recommendations about—
(a)
the
matters which are to be treated by virtue of subsection (3)
above as referred under section 5(1) above, or
(b)
the
matters which are to be treated by virtue of subsection (4)
above as referred under section 6(1) above,
shall be
treated as the report of the Low Pay Commission under section
5(3) or 6(2) above, as the case may be, on the referral in question
unless the Secretary of State, whether before or after the making
of the report, makes a determination under subsection (3) or
(4) above in relation to the referral.
(6)
If, in the
case of the matters described in subsection (5)(a) above or
any particular matters such as are described in subsection (5)(b)
above, the Secretary of State has, before the coming into force
of this Act,—
(a)
requested
the non-statutory Low Pay Commission to make their report within
a specified time, or
(b)
having
made such a request, extended the time for making the report,
the request
shall be treated as a requirement imposed under subsection (2)
of section 7 above and any such extension shall be treated as
an extension under subsection (3) of that section.
(7)
Accordingly,
if—
(a)
the
Secretary of State has not made a determination under subsection
(3) above, and
(b)
the
non-statutory Low Pay Commission fail to make the report required
by section 5(3) above within the time allowed under this Act,
section 5(5)
above applies.
(8)
The non-statutory
Low Pay Commission shall not be regarded as the body which is
the Low Pay Commission for the purposes of this Act in the case
of any referral under section 5(1) or 6(1) above which is made
after—
(a)
the
non-statutory Low Pay Commission have made their report under
section 5(3) above; or
(b)
the
time allowed under this Act to the non-statutory Low Pay Commission
for making that report has expired without the report having
been made; or
(c)
the
Secretary of State has made the determination under subsection
(3) above.
(9)
The Secretary
of State may at any time appoint a body, to be known as “the
Low Pay Commission”, to discharge the functions conferred
or imposed on the Low Pay Commission under this Act.
(10)
Schedule
1 to this Act shall have effect with respect to the constitution
and proceedings of the body appointed under subsection (9) above.
(11)
Where the
Secretary of State exercises the power conferred by subsection
(9) above, the body which is to be regarded for the purposes
of this Act as being the Low Pay Commission as respects the
referral of any matter to the Low Pay Commission by the Secretary
of State after the exercise of the power is the body appointed
under that subsection.
(12)
If the Secretary
of State makes the determination under subsection (3) above,
the power conferred by subsection (9) above must be exercised
and the referral required by section 5(1) above must be made
to the body appointed under subsection (9) above.
(13)
If the Secretary
of State makes a determination under subsection (3) or (4) above—
(a)
notice
of the determination shall be given to the non-statutory Low
Pay Commission; and
(b)
a
copy of the notice shall be laid before each House of Parliament.
(14)
No determination
shall be made under subsection (3) or (4) above more than twelve
months after the passing of this Act.
Records
9-
Duty
of employers to keep records
For the purposes
of this Act, the Secretary of State may by regulations make
provision requiring employers—
(a)
to
keep, in such form and manner as may be prescribed, such records
as may be prescribed; and
(b)
to
preserve those records for such period as may be prescribed.
10-
Worker’s
right of access to records
(1)
A worker
may, in accordance with the following provisions of this section,—
(a)
require
his employer to produce any relevant records; and
(b)
inspect
and examine those records and copy any part of them.
(2)
The rights
conferred by subsection (1) above are exercisable only if the
worker believes on reasonable grounds that he is or may be being,
or has or may have been, remunerated for any pay reference period
by his employer at a rate which is less than the national minimum
wage.
(3)
The rights
conferred by subsection (1) above are exercisable only for the
purpose of establishing whether or not the worker is being,
or has been, remunerated for any pay reference period by his
employer at a rate which is less than the national minimum wage.
(4)
The rights
conferred by subsection (1) above are exercisable—
(a)
by
the worker alone; or
(b)
by
the worker accompanied by such other person as the worker may
think fit.
