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In August 2021, the Government reintroduced its ‘name and shame’ list of employers that failed to pay their employees the national minimum wage. The August list identified 191 employers that had collectively underpaid over 34,000 workers between 2011 and 2018.
National Minimum Wage Breaches
Whilst the most common NMW breaches relate to deductions for travel, training and uniform costs, not paying travel time and incorrect age banding or worker status, two other common NMW breaches relate to the non-payment of induction training and work trials.
The issue of pay for induction training was raised in the recent Employment Appeal Tribunal (EAT) case of Opalkova v Acquire Care Limited. Ms Opalkova was required to complete mandatory induction training before starting her ‘usual duties’ as a care worker. Acquire Care argued that because her employment contract did not begin until the training had been completed, she was not entitled to be paid. The Employment Tribunal (ET) agreed. Ms Opalkova then appealed to the EAT.
Judgement of the Employment Appeal Tribunal
The EAT disagreed with Acquire Care and the ET. It said that the ET had failed to consider whether attendance at the training should be treated as work and had wrongly focused on only one area of the NMW regulations. It also said that the concept of ‘work’ is not confined to the carrying out of the primary duties of the role and, as such, attendance at training may be included.
Whilst each case will turn on its own facts; this case provides a helpful reminder that employers should not automatically assume that pre-employment training does not amount to ‘work’ for which the national minimum wage must be paid.
Unfortunately, there is no statutory framework or case law that refers to unpaid work trials. The Department for Business, Energy & Industrial Strategy (BEIS) has provided guidance on unpaid work trials, particularly when a trial is likely to amount to work. While the guidance is not legally binding, it is likely to be given due consideration by HMRC investigators and tribunals, so it should not be disregarded.
Factors considered by the courts and tribunals
The guidance sets out the following factors that courts and tribunals will consider when assessing if an unpaid work trial actually amounts to paid work:
Whether the trial is genuinely for recruitment purposes
If the role applied for does not require a trial period, like professional services, time spent performing the role is likely to amount to work, and NMW must be paid.
The length of the trial
If the trial period extends beyond a reasonable period of time to assess a candidate’s performance, the tasks carried out are likely to amount to work. For example, it’s unlikely that an employer would need to assess a candidate’s ability to wait tables over a week-long period.
Whether the candidate is observed performing the trial
Given the purpose of the trial is to assess a candidate’s ability before committing to a job offer, if the candidate is not viewed performing the trial, it is likely that the trial would amount to work.
The nature of the trial and whether the trial relates to the job
It may seem like common sense, but if the tasks given to the candidate during the trial have no relation to the job applied for, the time spent is likely to amount to work.
Whether the trial has an actual benefit to the employer
If a candidate is given a dummy task to perform during a trial, it has no immediate financial benefit to the employer and is unlikely to amount to work. If, however, the purpose of the trial is to cover staff shortages, this would more likely amount to work
What does this mean for employers?
Employers should avoid falling foul of NMW regulations and associated sanctions by carefully considering whether induction training is actually work. If so, NMW should be paid.
Equally, if an employer does require a trial period to assess a candidate’s ability, it would be good practice to ensure that the trial is reasonable in duration, that the candidate is observed performing the task and that the trial is simply being used to cover a busy period or a staff shortage.
Here to help
If you require further information and assistance regarding induction training, unpaid work trials and the national minimum wage, you can contact our Employment Team below.
