Why disregarding the minimum wage constitutes modern slavery

The National Minimum Wage (NMW) Act 1998 remains contentious, especially after the introduction of the NMW (Amendment) Regulations 2025, as it draws the legal line in the sand between employment and slavery, as highlighted by a recent case.  

The claimant was born in the Philippines in 1990 and travelled to the UAE in the employ of a diplomat and his family, after which she was relocated to London. Her three months of employment in the UK involved extreme exploitation, verbal abuse, threats and isolation, as she was effectively forced to work eighteen-hour days, with no breaks or rest days. Her movements were strictly controlled, as the family retained custody of her passport and frequently locked her inside the flat when they were away. She was further isolated by being denied access to a SIM card or the household Wi-Fi, while her compensation was almost non-existent, falling far below the statutory NMW.

It was concluded that, as she had been a victim of human trafficking and suffered from PTSD, she was granted leave to remain in the UK in 2015. The High Court awarded over £146,000 in ‘punitive’ damages in a “default” assessment, including £85,000 for false imprisonment and injury to feelings, £35,000 for psychiatric injury, and £15,000 in exemplary damages. Given the resurgence of modern slavery and human trafficking cases, this ruling renders “sub-clinical distress” a litigable tort in forced labour cases, potentially reaching the highest band of compensation.  

While the NMW Act allows for a “current rate” uplift in a standard Employment Tribunal, the Judge ruled that this does not automatically apply to a claim brought in tort. If a claimant sues for “servitude” or “negligence” rather than a straight breach of contract, they may only be entitled to the wage rates that existed at the time the work was done. This presents a claimant with a strategic choice between pursuing a statutory (i.e., for higher money) or a tort claim (for general damages, including PTSD).

Cases of severe harassment and abuse can result in a “loss of earnings” that can extend far beyond the period of employment, due to traumatic psychological damage or unwarranted references. Thus, HR departments should actively monitor ongoing workplace conflicts to safeguard against claims under the new Employment Rights Act and NMW (Amendment) Regulations. 

Aitch

I'm Aitch, the Founder and CEO of CIGMA Accounting Ltd. As a Chartered Management Accountant and as a CIMA member, I've spent more than 16 years helping businesses, entrepreneurs, landlords, and individuals with tax planning, accounting, and HMRC compliance. As a chartered accountant in London, I'm passionate about making complex tax matters easier to understand and helping clients make confident financial decisions. Over the years, I've advised start-ups, SMEs, established companies, and high-net-worth individuals across a wide range of tax and accounting matters. My expertise includes Corporation Tax, Self-Assessment, Capital Gains Tax, Inheritance Tax planning, R&D tax relief, capital allowances, international tax, and resolving complex HMRC compliance issues. Whether clients need a business accountant, tax accountant, or strategic tax advisor, my focus is always on delivering practical advice that creates long-term value. One of my specialist areas is Making Tax Digital (MTD). I've worked extensively with businesses preparing HMRC's digital reporting requirements, helping them move to cloud accounting, improve financial processes, and adopt technology that makes compliance more efficient. I regularly speak at Making Tax Digital roadshows, industry events, and educational sessions in collaboration with Zoho Books, sharing practical insights into digital accounting, tax legislation, and the future of the profession. Many business owners looking for the best accounting firm in London are not simply searching for an accountant they're looking for trusted advice, responsive support, and long-term value. That's the approach I've taken in building CIGMA Accounting. My team and I work closely with businesses across London and the UK, providing accounting services, tax advisory, bookkeeping, payroll, VAT, company accounts, and strategic tax planning tailored to each client's goals. Through this website, I share practical guidance on UK taxation, Making Tax Digital, HMRC updates, Corporation Tax, Self-Assessment, and business finance. My aim is to provide reliable, straightforward information that helps business owners understand changing regulations, reduce compliance risks, and make informed financial decisions with confidence.

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