Legal

When does an ‘employment relationship’ start?

6 Oct 2021 By Christopher Davies

In light of a recent case, Christopher Davies examines if the National Minimum Wage applies when new recruits are required to undertake training before starting a job

Issue

The National Minimum Wage Act 1998 (NMWA 1998) requires that all workers are paid at least the prescribed rate for each hour of work or training that they undertake. Claims can be made for breach of the National Minimum Wage (NMW) provisions in the employment tribunal and HMRC may take enforcement action against an employer. 

The question in the case of Opalkova v Acquire Care Ltd was whether the wage protection would also apply to job candidates in circumstances where they are required to spend time undertaking compulsory training as a condition of being offered a job.

In relation to this, HMRC guidance states: “Care must be taken when training is undertaken prior to commencing work. In these cases, it is important to establish when a worker’s contract is formed and distinguish between what is work and what is part of the employer’s selection process.”

Facts

Ms Opalkova applied for a post as a carer in an organisation providing home care services for clients. Following an interview process she was informed that she had been successful and a job offer would be made, but it was conditional on her completion, prior to her start date, of an online training course.  

Opalkova registered and undertook the course the following month. This included taking an online test which she had to pass to obtain a Care Certificate. Only upon her attaining this certificate was she given a contract of employment and a start date. 

After Opalkova had accepted the offer and commenced work, she brought a claim for national minimum wage in respect of the time she had spent on her induction week undertaking the course and test.

Decision

When the claim came before an employment tribunal it was initially dismissed as it was considered that at the time the induction course was completed by Opalkova, she was not employed and the protection under NMWA 1998 did not apply. The date given in the contract of employment was found to be the deciding factor in assessing the claim. 

However, on appeal, it was held that consideration should have been given as to whether an employment relationship had been formed at an earlier date than that stated in her contract of employment. 

The written terms of the contract, including the start date, were a factor to be taken into account, but the test that the tribunal should apply was whether she was undertaking work or training in such circumstances that an employment relationship could be implied. In assessing this, all the circumstances had to be taken into account.

Key point

NMWA 1998 defines a worker as someone who has ‘entered into’ a contract which could on the facts be formed in writing, verbally, by conduct or through a combination of these. 

The decision highlights that the written contract and the express terms regarding the start date should not always be taken to be the determining factor. When assessing whether a person falls within the scope of a statutory employment right, it is not the contractual terms that have to be interpreted – for example, the label given to the training or the start date of the contract – but the statutory provisions. 

When a candidate is asked to carry out tasks to show that they are suitable for the post in question the relationship would need to be assessed as at the time the tasks or training were carried out. 

While it may be described as a ‘trial’, ‘test’ or ‘recruitment exercise’ sometimes an individual will nevertheless be a worker and entitled to the minimum wage for the time spent carrying out these activities.

Christopher Davies is a professional support lawyer in the employment law department at Gateley Plc

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