National Minimum Wage: Driver can deduct cab rental costs

In Mr W Augustine v Data Cars Ltd: EA-2020-000383-AT, the Employment Appeal Tribunal (EAT) held that in calculating the National Minimum Wage of a cab driver deductions could be made for the vehicle and uniform rental costs. They were incurred in connection with his employment.

Mr Augustine worked for Data Cars Ltd as a minicab driver.

• He brought a claim to the Employment Tribunal (ET) that the National Minimum Wage (NMW) had been underpaid.
• The ET found that payments made to rent his vehicle and uniform did not have to be deducted as an expense when calculating what he had been paid for the purposes of his NMW claim.
• Mr Augustine appealed.

The EAT agreed with Mr Augustine finding that the ET had erred in deciding the costs were not deductible.

• Although the state of the evidence presented by both parties was unsatisfactory, s.28 of the National Minimum Wage Act 1998 provides that where an employee asserts they were paid less than the NMW it will be presumed they are correct unless the contrary can be established. The burden of proof lay with Data Cars to show that Mr Augustine was not paid less than the NMW.
• The only relevant test was whether the vehicle rental payments and uniform costs were incurred in connection with Mr Augustine’s employment and they were, so they were allowable as a deduction when calculating the NMW.
  • One way or another he was required to provide a vehicle and the fact that he could have provided his own vehicle instead of renting one was not relevant to the test.
  • He plainly wore the uniform in connection with his employment and that was why he rented it. Whether or not wearing it was optional was not relevant to the test, although in this case as a ‘Gold driver’, he was required to wear it.
• Other costs mentioned in the case that were properly deductible but not in dispute here included:
  • Fuel.
  • Insurance.
  • Cleaning.
  • Equipment rental and circuit fees paid to Data Cars.

Mr Augustine also tried to claim consequential financial losses as a result of not being paid the NMW. His claims here related to a delay in completing ‘the Knowledge’ and utility company penalties for unpaid bills. The EAT, finding that the ET had decided this point based on incorrect facts, remitted the point back to the ET for consideration, commenting that the claims looked 'fairly ambitious'.

Before the Employment tribunal could consider the NMW point they first had to determine whether Mr Augustine was an employee or worker at all as Data Cars claimed he was not. The ET disagreed finding that he was an employee and NMW did apply.

Useful guides on this topic

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Directors & the National Living Wage
All employees are subject to the National Living Wage (NLW) or, if under 25, to the National Minimum Wage (NMW).

Employment status & detailed checklist
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External link

Mr W Augustine v Data Cars Ltd: EA-2020-000383-AT