Enjoy your stay

Mehmet t/a Rose Hotel Group v Aduma

If employers can find a non-discriminatory reason for their poor treatment of an employee, they can avoid an award of unlimited compensation.

In Mehmet t/a Rose Hotel Group v Aduma, the Employment Appeal Tribunal (EAT) resisted the employer’s arguments that he would not have paid the National Minimum Wage (NMW) to any vulnerable employee and instead found him guilty of race discrimination.

Basic facts

Mr Aduma, a Nigerian student with an entitlement to work here, was employed as a night manager at the Rose Hotel, owned by Mr Mehmet. He was paid £130 for a 72-hour week, well under the NMW.

When Mr Mehmet informed Mr Aduma that he intended to apply for a National Insurance (NI) number, Mr Aduma warned him against doing so as he was concerned about his own failure to pay taxes. Mr Mehmet then asked Mr Aduma to sign an Inland Revenue form on which he had been described as a porter. Mr Aduma refused and he was dismissed. He sent in a grievance letter, to which Mr Mehmet eventually replied but failed to arrange a meeting.

Mr Aduma said, among other things, that his employer had racially discriminated against him by failing to pay him the NMW.

Tribunal decision

The tribunal said that it had to presume that Mr Mehmet was law-abiding (and would therefore pay the NMW) when comparing Mr Aduma’s situation to that of a hypothetical employee. As Mr Mehmet had not provided any evidence that he paid other staff less than the minimum wage, it concluded he would have paid it to a hypothetical comparator. Mr Aduma had therefore been treated less favourably.

However, it said he had not been discriminated against on the grounds of his race, but because of his inferior (and vulnerable) employment status as someone who came from a country with no automatic right to work here. This, though, was enough to constitute "racial grounds" under the Race Relations Act 1976. It also said that the pressure Mr Mehmet put on Mr Aduma not to apply for a NI number amounted to discrimination. Likewise, his dismissal.

It awarded Mr Aduma almost £18,000, increased by 40 per cent because of Mr Mehmet’s failure to comply with the statutory grievance procedure.

Employer’s appeal

Mr Mehmet appealed, arguing that he would not have been willing to pay tax for a British or British-based person in a similar situation to Mr Aduma. Indeed, he said that the evidence had shown him to be someone who sought to exploit people in a vulnerable position.

Nor should the tribunal have assumed that he was law abiding and paid the minimum wage. It had also been wrong to ignore the non-discriminatory reason for his conduct – his own concern about his tax position.

EAT decision

Thankfully, the EAT rejected these rather ingenious arguments. Instead, it agreed with the tribunal, saying that it was entitled to presume that Mr Mehmet was law abiding as he paid the only “acknowledged employee” (who happened to be his son) the minimum wage.

It recognised that this conclusion sat uneasily with some of the tribunal’s other observations about the way Mr Mehmet ran his business, but was acceptable because it had not made a finding that anyone other than Mr Aduma had been paid less than the NMW. On that basis, the tribunal was entitled to infer less favourable treatment in relation to Mr Aduma’s efforts to obtain a NI number as well as his dismissal.

As for the awards, the EAT again said that the tribunal was entitled to come to the decision that it had. The discrimination was not an isolated or one off occurrence. Indeed, Mr Aduma’s “employment was posited on the assumption by the employer that he was someone of whom … the employer could take advantage.”

In terms of the mark up, the EAT agreed that the employer’s assertions that he was unaware of the statutory grievance procedure were “suspect”.

The appeal was therefore dismissed.