Court of Appeal determines that hirer and agency equally liable to compensate workers for wages’ shortfall under Agency Worker Regulations 2010

In their long-running and hard-fought litigation against London Underground Limited  (LUL) the claims of 31 agency workers for compensation for unpaid wages have been upheld by the Court of Appeal (London Underground LTD -v- Adelaide Amissah and Others [2019] EWCA Civ 125).

The workers were employed by an agency, trainpeople.co.uk (TP), who were contracted by LUL to provide staff at various underground stations. Upon the Agency Worker Regulations 2010 (AWR) coming into force in October 2011 both LUL and TP treated the agency workers as though the regulations did not apply to them. In particular, they were not accorded the same pay as LUL’s own employees performing the same work (regulation 5).

This breach was not rectified until October 2012, a year after the AWR came into force. LUL promptly terminated its contract with TP at the start of 2013 and the majority of the workers were dismissed. After their dismissal and following the workers’ claims to the ET, LUL put TP in funds to account for the arrears of pay it owed the workers for the period until October 2012. However, TP did not pass these sums onto the workers before entering voluntary liquidation.

At first instance, the ET held that under regulation 14(2), LUL and TP were jointly responsible for the breach of regulation 5. However, rather than ruling that LUL should compensate the workers for 50 per cent of their loss the ET held that under regulation 18 the workers were not entitled to recover from LUL for three reasons: a) because in circumstances suggestive of fraud TP had not paid the workers what it admittedly owed them in spite of receiving full payment from LUL by May 2013 b) because the workers had not embarked on separate litigation beyond their ET claims to recover the sums due from TP and c) because following TP’s liquidation, they had lost the chance of doing so.

The Judge further held that under regulation 18(9) it would not be just and equitable for LUL to have to compensate the workers: “The logic of the Claimants’ case is that LUL must pay twice in respect of the back pay. I do not accept that a proper application of [the Regulations] dictates that bizarre outcome.”

The workers successfully appealed to the EAT and LUL further appealed to the Court of Appeal.

In dismissing LUL’s appeal the Court of Appeal held that:

  1. contrary to the decision of the ET and EAT, the workers’ entitlement under regulation 5 was not to be issued with AWR-compliant terms and conditions of employment, but to be paid the correct AWR-compliant wages.
  2. Therefore, LUL’s case that the workers were required to bring separate wages’ claims to pursue the arrears of pay (as accepted by the ET) was wrong. They were entitled to statutory compensation under the AWR.
  3. The ET was wrong to treat the workers’ loss as being attributable to the liquidation of TP, as opposed to the original infringement of the workers’ regulation 5 rights.
  4. As the ET had determined that LUL was 50 per cent liable for this infringement under regulation 14, by way of compensation LUL was 50 per cent liable for the arrears of pay (regulation 18(10)). There was no warrant for any reduction under the “just and equitable” provision in regulation 18(9).

David Mitchell, led by Thomas Linden QC, instructed for Waring & Co solicitors, acted for the successful workers.

 

25th February 2019