National Minimum Wage bill to exclude armed forces

In February 1998, as the UK's National Minimum Wage Bill reached its final parliamentary committee stages, it was announced that the armed forces would be excluded from the legislation.

At the end of January 1998, the Low Pay Commission (LPC) completed its oral hearings on the forthcoming National Minimum Wage (NMW) in sessions with the Equal Opportunities Commission, Commission for Racial Equality and UNISON, public sector union which is the UK's largest union. The LPC will now have to consider more than 400 pieces of written evidence, along with the results of hearings with companies, employees, trade unions and other bodies. The LPC's findings are expected to be published later in the spring of 1998, along with a recommendation for a NMW rate (UK9711177F).

While wishing to set a minimum floor for wage rates, the Government is also concerned that the LPC recommends a level for the minimum wage that does not undermine its "welfare to work" programme (UK9707143F). According to the Department of Trade and Industry (DTI), this means that "it is crucial the minimum wage is set at a level which does not restrict employment opportunities for those looking for work."

At the first reading in November 1997 of the NMW Bill (UK9712190N), which sets the framework for the introduction of the NMW, the armed forces and crown employees were to be included. However, by February 1998, an amendment excluding armed forces personnel from the NMW was tabled by the DTI. The move followed assurances from the Department that legislation would apply universally. The change in policy was signalled during the committee stages of the Bill, when ministers withdrew two clauses that extended its provision to crown employees and members of the armed forces. They said that the decision was taken because of the "unique position" of the armed forces in that, where they were on duty for 24 hours a day, it would not be possible to guarantee a minimum hourly rate. Civilians employed by the forces will be covered by the legislation. Some argue that the DTI backed down after the intervention of Prime Minister Tony Blair, who agreed that exempting the armed forces would be in line with existing practice for other domestic legislation. It also follows the example of USA minimum wage legislation.

Others in the Government argued that this move would set the tone for further exceptions from the basic rate to be announced later in 1998. The legislation already exempts volunteers, prisoners, share fishing workers, teenagers under the school-leaving age and certain categories of self-employed people.

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