In the case of Mr W Augustine v Data Cars Ltd, Mr Augustine worked as a driver for Data Cars. His claims included a claim that he had been underpaid the National Minimum Wage and claims for holiday pay and of wrongful dismissal.

At first, Mr Augustine provided his own vehicle, but he then rented a vehicle from a company associated with Data Cars. In addition, he bought a Data Cars uniform. He brought claims in the Employment Tribunal, claiming he was an employee of Data Cars and that he was therefore entitled to the National Minimum Wage (NMW). The Tribunal agreed.

There was then a dispute as to whether, for the purposes of the NMW calculation, certain payments made by Mr Augustine should be deducted, including payments in for the vehicle and uniform. The Tribunal found that the cost of car hire and the purchase of the uniform were both optional expenses, as Mr Augustine could use his own car and the uniform was not obligatory. Therefore, these costs did not need to be taken into account when calculating the NMW. The decision was appealed.

On appeal, the EAT held that both the cost of the car hire and the uniform were deductions. The EAT held that the test is whether the expenditure is “in connection with employment” (and not reimbursed by the employer). They found that the expenditure does not have to be a requirement of employment and it does not have to be necessarily incurred nor wholly or exclusively incurred in connection with the employment. It was therefore irrelevant that Mr Augustine could use his own car or that the uniform was not obligatory. He plainly hired the car and wore the uniform in connection with his employment.

This case demonstrates how important it is for employers to take extra care when calculating NMW and deductions.