I am the HR manager at a large manufacturing company. I have received a grievance from one of our trainee mechanics (aged 17), alleging that he has not received the national minimum wage and that this constitutes age discrimination. He is required to attend internal training, which we organise as part of our apprentice programme, outside his contracted hours and hasn’t been paid any extra money. If he wasn’t a trainee, he would be eligible for an overtime premium for this time. Both we and the employee pay 5% of salary into the company pension scheme. How do I handle it?

You will need to establish whether the employee has received the national minimum wage (NMW) or not. You should check payroll records, with details of working hours, to see what remuneration they have received in each pay reference period (usually each week or month). Then you can work out if the employee has received at least the NMW for their total hours worked in each period.

Training which you have organised at the workplace will count as “working time”, unlike time spent attending a course at college. As the employee is required to attend these internal sessions, he should either be paid for them when they fall outside his contracted hours, or they should be considered when calculating whether his total remuneration complies with the NMW. Overtime premiums would not count towards the NMW if the employee was receiving them.

I assume that your pension scheme is an “auto-enrolment” scheme with an enhanced company contribution. Pension payments made by the company should not be counted when calculating whether an employee has received the NMW. Likewise, employee pension payments made by way of deduction from salary should not be considered either. Essentially, you should refer to the employee’s gross salary before pension payments are applied when carrying out your calculation.

If the employee has received the NMW, it would be prudent to clearly explain this to them in your grievance outcome. If they haven’t, you should take corrective steps immediately and the company will need to address the age discrimination complaint in more detail. Failing to pay an employee the NMW will not necessarily be “discriminatory”; the employee must show that they have been treated less favourably on the grounds of their age, compared to (real or hypothetical) employees who are part of a different age group. If you have treated all trainees the same way, regardless of age, this might give the company a valid defence. You should investigate this complaint fully as part of the grievance process and be mindful that internal grievance documents would be discoverable in any later Tribunal proceedings. 

You should pay the employee for any shortfall in receiving the NMW, as they would be entitled to claim this as an unlawful deduction from wages at Tribunal, or as part of a breach of contract or constructive unfair dismissal claim if they resign. You might consider taking legal advice at this point, given the risk of a claim by the employee.

Given the employee’s age, you should make sure you are using the appropriate NMW rate. This is currently £4.55 an hour for employees under 18. A lower rate applies for apprentices. You should also be mindful that employees aged under 18 will count as “young workers” for the purpose of the Working Time Regulations and are subject to a reduced weekly working limit of 40 hours.

Finally, you should be mindful that HMRC can issue notices and penalties for failure to pay NMW, and non-compliant businesses risk being “named and shamed” on the official gov.co.uk list.