The family worker exemption revisited: a sustained campaign against the devaluation of domestic work – by Natalie Sedacca

Image by 6581245 from Pixabay

1. Introduction

In September 2023, the government finally took concrete steps to remove the ‘family worker exemption,’ a legislative provision that has sanctioned exploitation of live-in domestic workers by obstructing a clear entitlement to payment of the National Minimum Wage (NMW). The National Minimum Wage (Amendment) (No 2) Regulations 2023 are due to come into force on 1 April 2024, repealing the exemption that is currently contained in regulation 57(3) of the NMW Regulations 2015. That exemption provides that ‘work’ does not include ‘any work done by a worker in relation to an employer’s family household,’ where the worker lives in the employer’s family home and is treated as a member of their family in relation to the provision of living accommodation and meals, and the sharing of tasks and leisure activities. Repealing this provision means that, from April 2024, all domestic workers will have a clear entitlement to the NMW – even in situations where they are (arguably) treated as a member of their employing family.

2. Background: the successful challenge in Puthenveettil v Alexander

While a welcome development, repeal of the exemption has also been substantially delayed in response to such a stark instance of lesser standards being applied to domestic workers. Almost three years ago, in December 2020, the Employment Tribunal (ET) judgment in Puthenveettil v Alexander found the family worker exemption (in its earlier manifestation in Minimum Wage Regulations 1999, Reg 2(2)), to be unlawful and indirectly discriminatory on the basis of sex.

The Claimant, Ms Kamalammal Puthenveettil, had worked for the respondent employers between 2005 and 2013, with contractual pay of £110 per week at first and £120 per week from 2008. She asserted that she had received significantly less even than this amount and that she was responsible for all domestic chores, including daycare of a two-year-old child alongside household tasks. In 2013, she began a claim that included unlawful deduction of wages, which her former employers contested by raising the family worker exemption.

Whereas previous cases relating to the exemption had focused on whether it applied in a particular case, here the Claimant’s lawyers raised a more general challenge to its legality. It was argued that the exemption amounted to indirect discrimination, contrary to Equality Act 2010, s19, and under relevant EU law including Article 157 of the Treaty on the Functioning of the European Union (Article 157 TFEU) which requires EU member states to ‘ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied.’

In the first hearing in 2017, the ET did not consider the broader equality law challenge and held that the family worker exemption applied to the Claimant’s case. Following a successful appeal to the Employment Appeal Tribunal (EAT) in 2018, the case was heard again in the ET in 2020. In that hearing the Claimant, represented by solicitor Jamila Duncan-Bosu of Anti-Trafficking and Labour Exploitation Unit (ATLEU) and Counsel Akua Reindorf of Cloisters Chambers, successfully demonstrated that the family worker exemption disadvantaged women as a group and that this exemption could not be justified as a proportionate means to meet a legitimate aim. The most relevant potential aim raised had been that the family worker exemption facilitated support for working parents. However, although the ET held that this was capable in theory of amounting to a legitimate aim, there was a lack of evidence to show the exemption was a proportionate way of achieving this.

As I argued in an article following the ET judgment, the family worker exemption reflects the gendered devaluation of domestic work and created a shocking and discriminatory situation potentially affecting a substantial group of highly disadvantaged workers, who are overwhelmingly women and disproportionately migrants and ethnic minorities. Rather than uncertainty about their status, clear protection of the NMW is particularly essential for domestic workers, who often have limited bargaining power and face difficulties in collective organisation.

3. The Low Pay Commission review and government response

A few months after the ET judgment, the Low Pay Commission (LPC) began a review of the exemption, which civil society groups actively engaged with through written submissions and oral evidence to highlight the significant problems caused by the exemption. For example, the submission from the migrant domestic worker NGO Kalayaan included a case study demonstrating how the exemption negatively affects vulnerable domestic workers seeking to recover wages from employers that have exploited them. Other organisations that made submissions against the exemption included ATLEU, the Voice of Domestic Workers, and Nanny Solidarity Network (NSN).

In October 2021, the LPC concluded that the exemption was ‘not fit for purpose’ and should be repealed, with live-in domestic workers being paid the same minimum wage as other workers. Its explanatory blog post stated that the exemption had provided a loophole for the exploitation of live-in domestic workers and reaffirmed the discriminatory effect of the exemption. As noted by ATLEU shortly afterwards, this was an opportune moment to crack down on exploitation by closing the loophole.

Several months later, the minister Paul Scully – then Parliamentary Under Secretary of State at the Department for Business, Energy and Industrial Strategy – indicated in a debate on 10 March 2022 that the government had accepted the LPC’s recommendation and would ‘introduce legislation to remove the live-in domestic worker exemption when parliamentary time allows.’ However, progress was slow following this commitment.

In November 2022, a coalition of civil society organisations coordinated by ATLEU and NSN wrote to the Secretary of State for Business, Energy and Industrial Strategy requesting that the department deliver urgently on the government’s commitment. This was followed by a joint public statement in March 2023, noting that a full year had elapsed since the government’s commitment to repeal. There had been no meaningful action to repeal the exemption, and abusive employers were continuing to rely on the exemption as a legitimation for denying a proper wage to predominantly women workers.

4. The employer’s unsuccessful appeal in Puthenveettil

In the meantime, the employer in Puthenveettil had appealed against the 2020 ET judgment. On 5 April 2023, the Honourable Mr Justice Kerr handed down the EAT judgment confirming the ET had been correct to find the Claimant was entitled to the NMW. The appeal focused on legal arguments about the provisions of equality and equal pay law, particularly those derived from EU law, rather than amounting to a renewed effort to justify the disadvantage the exemption caused to women as a proportionate means of meeting a legitimate aim.

The former employer, appearing in person, argued that the exemption was not incompatible with Article 157 TFEU [30]. He based this argument on the assertion that the provision did not apply to cases of ‘indirect’ discrimination that require comparison between whole branches of industry, and that even if it did, it was not discriminatory because the worker is treated in this way because of the type of work she performs rather than her sex [32-33] Furthermore, he contended that the Recast Directive on equal opportunities, which is intended to ensure the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation, had been wrongly treated as having horizontal effect [35].

The EAT rejected these arguments, restating that the exemption, while neutral on its face as to the sex of the worker concerned, has a disproportionately negative effect on women, who constitute most of the workers deprived of NMW entitlement through its functioning [49]. This disparate impact required objective justification through a legitimate aim, which had failed on the facts, and to which there was no permitted challenge in the appeal [50-52]. Additionally, a series of cases in the Court of Justice of the European Union (CJEU) had confirmed that Article 157 TFEU applied to cases of unequal pay caused by indirectly discriminatory measures [55-58]. The ET had not been dealing with a case involving a hypothetical comparator but between one group of workers (domestic workers not entitled to minimum wage) and other workers; in this situation, there was no reason to disagree with the submission for the Claimant that Article 157 could apply [61-62]. Crucially, as against the employer’s submissions, this was not an equal pay claim that would require a qualifying male comparator, and there was ‘no good reason why an equal pay claim should be the only and necessary remedy against the discrimination’ [64].

5. EU law and the impact of Brexit

The EAT found there was weight in the proposition, argued by the Claimant and accepted by the ET, that the family worker exemption should be disapplied on the further ground that ‘the principle of equal treatment between men and women is a general principle of non-discrimination and must be given horizontal direct effect irrespective of whether Article 157 applies’ [70]. However, it did not base its decision on that ground for several reasons, including it being clear that Article 157 TFEU applied anyway. In addition, by the time the hearing took place the EU Charter had ceased to be part of English law except as regards the retention of fundamental rights and principles [70-72].

The EAT went on to address the broader impact of the UK’s withdrawal from the European Union, specifically the provisions of the European Union (Withdrawal) Act 2018 (as amended by the European Union (Withdrawal Agreement) Act 2020). It confirmed that the provisions did not change the correctness of the ET’s findings, with the Claimant’s employment having predated the Brexit referendum. However, were the same facts to occur again, it held that the repeal of the European Communities Act 1972, s2(1), meant that a tribunal would no longer have the power to disapply the family worker exemption [74]. The consequence of this finding was that the EAT’s decision would not be binding on others because of the change in applicability of EU law caused by the end of the transition period.

It is possible to criticise this aspect of the judgment. As argued in the IDS Employment Law Brief (paywalled) the EAT may have confused the general provision of non-discrimination in EU law, on which it is no longer possible to rely to disapply statutory provisions, and directly effective treaty rights like those in Article 157 TFEU, the effect of which has been preserved by the EU (Withdrawal) Act 2018, s4(1). Therefore, women domestic workers seeking to argue against the exemption in future could have sought to rely on Article 157.  

However, the Retained EU Law (Revocation and Reform) Act 2023 (‘REULA’) has further complicated this position. From 31 December 2023, s2 REULA will repeal s4(1) EU (Withdrawal) Act 2018, such that it will no longer be possible to rely on Article 157 TFEU to disapply other provisions, unless the government uses powers in ss11-12 REULA to restate / replicate that legislation, or where relevant facts took place before the end of 2023 (s22(5) REULA). In August 2023 the government announced that there would be no reduction in equal pay protection, with secondary legislation to be laid before parliament ‘before the end of the year.’

If these provisions are not retained, a future tribunal could potentially still disapply the family worker exemption based on domestic legislation, as noted in commentary by Cloisters pupil barrister Imogen Brown. Nonetheless, withdrawal from the EU has clearly made the position more complicated and uncertain, rather than being straightforwardly addressed by the Puthenveettil EAT judgment.

6. The successful campaign and the ongoing exclusion of domestic workers from labour rights

Given the non-binding nature of the first instance judgment and the complexity of the EU law position, the civil society campaign for removal of the exemption has continued to be vital. Fortunately, that campaign has now been successful through the sustained effort from civil society using a mix of legal, advocacy and campaigning tactics. The ground-breaking Puthenveettil case was crucial in identifying the unlawful nature of the exemption, while the move to an eventual change in the law required sustained engagement with the Low Pay Commission and relevant ministers to keep the issue in the spotlight and draw attention to the abuse it was facilitating.

Even once all domestic workers have a clear entitlement to the NMW, there are other important exclusions that remain to be challenged. Workers classed as ‘domestic servants’ continue to be excluded from key working time protections, including the maximum average working week of 48 hours, and private homes are exempt from ordinary provisions on inspection. Relatedly, the UK has declined to ratify the International Labour Organisation’s Convention 189 on the rights of domestic workers, which requires a series of changes including the effective promotion and protection of the human rights of all domestic workers.

In addition, the visa regime for domestic workers exposes many to abuse and exploitation. As a result of changes made to the scheme in 2012, domestic workers on an Overseas Domestic Worker visa are subject to restrictive conditions that make it very difficult to change employer or challenge abuse. The government has failed to introduce all the recommendations to mitigate this that were made in an independent review in 2015, including the introduction of mandatory group information meetings for all domestic workers remaining in the UK for more than 42 days.

An end to the family worker exemption is a therefore welcome but overdue first step in equalising domestic workers’ rights. To further this agenda, the UK should ratify Convention 189, remove other exemptions from labour rights, and restore the pre-2012 ODW visa that allowed domestic workers to extend their visa and provided a route to settlement and family reunification.

With thanks to Dr Eleni Frantziou and the blog editors for helpful comments on the draft.

About the author

(Suggested citation: N Sedacca, ‘The family worker exemption revisited: a sustained campaign against the devaluation of domestic work’ UK Labour Law Blog, 17 November 2023 available at https://uklabourlawblog.com/)