Friday, 10 June 2016

The Right to the NMW/Living Wage after Performers Agents Deductions?

Spoke again to the 'Low Pay Commission' (LPC) earlier today (16Sep16). I met with them back in July. They agree with my view. But, we are all waiting for the governments lawyer’s response. It seems that government, unions and LPC previously ignored this clause. We have all talked about who employs whom. But... this particular clause is saying, forget about who employs whom, there cannot be any fees, connected with the work, that reduce the NMW. The clause is a - 'catch all' situation. So no matter what... the 'worker' receives the NMW after any direct costs. Of course I am amazed that those who are paid to check such things - have not done so. Never take anything for granted, without checking first! Even the TUC were unaware of this clause. How will the government wriggle out of this clause? We kept asking them for industry specific guidelines for us. I took two tribunal cases and one appeal. Huge amount of my time. It was a waste - of my valuable time. Had I been told this clause existed, I would have known what to do. My mistake, if there was a mistake, was to actually believe the professional advice I was given. Even Equity solicitors seemed to have got it wrong. You cannot be more connected 'with the work', than an employment agency. No agent… No work! Equity have not given a straight answer. Neither have they given me any guidance on what the clause covers and what it does not. Is it true, they always shoot the messenger???

So on the 28 July 2016 I contacted BEIS NMW Unit, asking for clarification of NMW Act Regulations, - Clause 13. As at 16 September, seven weeks later, I am still awaiting a response from the governments lawyers, as to what this regulation refers to/means.

"Payments to another person for expenditure connected with the job"

"Payments made by a worker to another person for items or expenses that are connected with the job reduce pay for minimum wage purposes. This could include, for example, safety clothing, uniforms, tools or other equipment needed for the job"

On the 15 August 2016 I put in a Freedom Of Information (FOI) Request. On 14 September I received a response. None of my questions were answered. Answers would have embarrassed the government? To read/download the questions and the reply,


Here is an archive copy of NMW Regulation, Clause 13, "Fees connected with the work reduce NMW", page 45. This copy is dated 2008. Just to show that this regulation has been around for a long... long time. I understand it goes back to 1998...

Below is a fax to me dated 16 July 2002, fourteen years ago. It relates to the first complaint from our industry (me), taken to the government NMW unit (originally in 2000). Two 22 year old's were scammed by a company called CP Promotions (highlighted by 'Mail On Sunday' on  6 August 2000. The fee was about £140 for a portfolio and the promise of finding you an agency. BBC 'UK Worst' highlighted these tricksters in 2003. Of course they kept changing their name...


The two victims were duly passed on to an 'agency' called 'Top Spots'. Who put them on a film set for 'Risk TV'. They originally worked a 12 hour day for only £25 each, in the freezing cold.

It took the government nearly two years - to come to this final decision. You will see below, that after various "miscalculation", the NMW unit came down in favour of these performers being paid at least the NMW, after agency deductions. Upon receiving this final decision, I felt elated that my time and effort, over nearly two years, finally paid off!

Sometime after this, the government changed their minds and did a complete about turn! They now claimed, that it was only the employer - that had to pay at least the NMW...

Now for a history lesson....

Here is a link to the history of the FAA/PACT Agreement, for film extras/supporting artists, which explains - who employs who?

From this blog you will see that from 1947 to 1993 agent/s offering work to film extras/supporting artists (agency workers), in the London area (40 miles from Charing Cross) were being paid their commission - not by the agency worker, but by the production companies (hirer).

From 1993 onwards, agents were still working for the hirer, but instead of being paid by the hirer, the agents decided to charge the agency worker instead. Because, it allowed the agent to also charge an up-front casting directory fee - to the agency worker too. There was no increase in pay, to cover this change - in who was charged for the agencies commission. Hirers were the winners and the agency workers - were the losers. How could agents do this? Because... they could.

So agency workers were saddled with paying the agents commission, which is now (15%) 18% including VAT; and a fee for their casting directory entry!

Of course the Ray Knight agency promised to stop charging a casting directory fee and promised to recoup that cost by increasing commission rates from 11% + VAT to 15% plus VAT. The agency then broke that agreement, kept the higher rate of commission and reverted to charging, a book fee, now (£50) £60 including VAT. How could agents do this? Because... they could.

Now agents regularly undercut each other, by offering agency workers below employer/union agreed rates of pay. This is only done because of greed by the agency. There is absolutely no benefit to the agency workers, since most of them are with many agencies and would have got the work anyway. How can agents do 'deals', if the worker suffers financially, as a consequence? Because they can...

There has never been an employment tribunal case taken by an agency worker in our industry, against an agency, for victimisation. And... there never will be. Ask yourself why? Because, agencies can do what they like...

In 2004 I went to great trouble... and expense, by taking two entertainment agencies to an Employment Tribunal, in order to clarify NMW Regulations. One of which, actually went to appeal. I was advised by the Judge not to take the case further in case it might jeopardise existing regulations. Having no legal representation to confer with, I agreed to withdraw the appeal, sadly. Read what the Judge said, which was very complimentary, Here is the link to download the file:

Now in 2007, after much lobbying, the 'Low Pay Commission' annual report actually highlighted the issue of agency workers - who did NOT get the NMW after agency deductions:

The below two paragraphs, are from correspondence from the Low Pay Commission - to me:

In its 2010 Report the Low Pay Commission highlighted issues that had been brought to its attention in relation to agency workers and, more specifically, those in the entertainment sector.  The Commission did state that it did not believe that changes to the minimum wage legislation were necessary.  It stated, though, that more may need to be done in relation to enforcement of the existing regulations, and the Commission recommended that sector specific guidance on the NMW for the entertainment sector be produced.  This recommendation was made as it was recognised that the issues in the sector were complex (and not as straightforward as they may appear) and the fact that two enforcement bodies had an involvement in the sector.  The Commission did say it would subsequently monitor the situation (after publication of new guidance) and review the effect of its publication.

The Commission's 2011 Report noted that guidance was due to be published, which it welcomed. But the 2012 Report noted that the new guidance produced by the Government did not go far enough in providing clear guidance for those operating in the entertainment sector, and so again called for specific guidance for the entertainment sector to be drawn up.  The Government accepted the recommendation that a review of all existing guidance should be undertaken and that it should maintain effective, clear and accessible guidance on all aspects of the NMW, particularly where there was significant evidence of ignorance or infringing practice.  Since this recommendation was accepted, the Government has established a new website (GOV.UK), which has replaced the business link and direct gov website, and which will eventually be the single Government website.

So we were supposed to get detailed specific NMW guidelines, for the entertainments industry. But... for some strange reason - we never actually got them...


Now In 2016 the Low Pay Commission again highlighted the issue (In red) in their Annual Report:


This is the governments own interpretation - of how the NMW is calculated:

The government talk about payments to another person for expenditure connected with the job does reduce pay - for minimum wage purposes. What does this mean?

Agents commission can be as high as one third, 33.3%. Save image to enlarge, or...


In the case of this 'agency', 'Models Direct, clause 6.1 they charge 33.3% commission. There is no mention of the VAT also deductible. I wonder why? They boast on their website that one model earned £54 for the day. Less commission? 

It is obvious to any one,  that these agency workers in the entertainments industry/TV & Film, run a real risk of getting less than the NMW/Living wage after agency deductions for commission and casting directory book fees. Thousands of agency workers are effected.

As the above agency remittance advice/statement illustrates... An agency worker received two days work, after two years on an agents books. Their gross earning for the two days, was £180. However, after the agency deducted two years of book fees and commission, the agency worker was left with only £10.28. The net fee/earnings did not even cover the bus fares to and from the film locations...

This is a widespread NMW problem...

How can the government ignore these vulnerable agency workers...?

This is what the government told me in 2009, after refusing to meet with me.

From: Brennan Linda (ER) []
Sent: 22 April 2009 16:22
Subject: RE: Agents making deductions which clearly breach the National Minimum Wage!

 Mr Hurst

Thank you for your response.  I regret that I cannot usefully add to my previous explanation of NMW law or comment on individual cases, which are a matter for the judiciary.

 If you are aware of any organisation that is in breach of NMW legislation you  could contact the National minimum wage helpline who enforce the NMW on behalf of the Government.  The Government are committed to penalising anyone who contravenes minimum wage and  since  the 6th April there is an automatic penalty for companies who are not paying their workers NMW.

Kind regards

Linda Brennan
National Minimum Wage Team
Department for Business, Enterprise and Regulatory Reform

From: Clive Hurst []
Sent: 21 April 2009 12:31
To: Brennan Linda (ER)
Subject: Agents making deductions which clearly breach the National Minimum Wage!

Dear Linda,

Thanks for your response.

Your department has previously claimed that where an agent negotiates the workers fee then the agent is the employer. That where the agent does not negotiate the workers fee, the agent is not the employer. I have had numerous conversations with Paul Sellers at the TUC on this issue too.

I took two employment tribunal cases, on the strength of this absurd claim by your department. I spent a lot of my own time and money trying to get a tribunal decision that confirmed your departments legal stand on this issue. One of the cases went to appeal and the judge laughed your departments claims out of the court and totally rejected such absurd assertions by your department. Click: Clive Hurst Appeal 22Jun04.

Quite clearly your department had sent me on a fool’s errand by claiming the agent would be deemed to be the employer if the agent negotiated rates of pay. I only wish the judge had put in print the statements he made to me in court… Since 2004 (five years ago) I have been seeking to get this issue addressed by the NMW unit at BERR (DTI); without success.

I even took part in the 2006 Low Pay Commission consultation, see attached report which was published in 2007. It is quite clear to me that the Low Pay Commission agreed with me, otherwise they would not have highlighted the issue in their report. I attach my 2008 submission to the LPC, which I understand will be published in the later part of next month.

Just a matter of months ago I was told by Equity (union) solicitors that an action against an employer or agent would fail, where the agent made deductions (book fees) which left the worker with little or no pay.

I have to tell your department that I am sick and tired of being fobbed off with excuses. I therefore request a meeting with your department and EAS. We need to sort this problem out once and for all. All workers should have the right to receive at least the NMW; clearly those in my industry are not getting the NMW, when working through an agency of the employers choosing.


From: Brennan Linda (ER) []
Sent: 21 April 2009 08:30
Subject: RE: Student Films - Low Pay No Pay?

Mr Hurst

I refer to your recent email to Steve Keeler of the Employment Agency Standards here at BERR which has been passed to the National Minimum Wage (NMW) policy team for consideration.  Apologies for the delay in replying but I have been away from the office over the Easter period.

Your query refers to the NMW legislation and a workers right to the minimum wage after deductions from an employment agency. Under the NMW legislation there is no legal basis that an agency worker should not be paid the NMW.  The NMW Act 1998 applies to agency workers and it is the person who actually pays the agency worker who is responsible for ensuring that the worker receives the NMW. (Section 34 NMW Act 1998 refers). 

The NMW Regulations 1999 do permit certain deductions to be made, however, it is the pay that is actually received by the worker which needs to be at least the NMW.  From 6 April any employer who fails to comply is subject to an automatic penalty.

A separate issue would be where a company acts as an employment agency, placing an individual with a client.  In this situation the normal NMW rules/legislation will apply (including s34 NMWA).  The NMW position would depend on various factors including whether or not the end client or the agency was regarded as the employer, when the fee was paid, whether or not it was paid by a deduction or a payment from wages and if it was connected to the employment itself.

Ultimately it is the employer who must pay at least the NMW rates.

If further clarification is required on any aspect of the minimum wage you can contact the National Minimum Wage Helpline.  The helpline also deals with complaints about non-payment.  The helpline can be reached at 0845 6000 678.

Linda Brennan
National Minimum Wage Team
Department for Business, Enterprise and Regulatory Reform