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On-Line Engineering and Design Company Must Pay Full Training Levy

An on-line engineering and design company has failed to convince the High Court that it should not be held liable for the full industrial training levy of 1.5% of the emoluments it pays to its employees. The court rejected the company’s plea that its staff are mainly office-bound at its clients’ premises and cannot therefore be described as ‘site employees’ within the meaning of the Industrial Training Levy (Engineering and Construction Industry Training Board) Orders 2009.

The company had argued that it should only have to pay the training levy at the lower rate of 0.18% on the basis that the majority of its agency and consultancy staff work for the most part in office environments at premises owned or controlled by its clients and could not therefore accurately be described as ‘site’ workers.

However, the court accepted arguments put forward by the Engineering Construction Industry Training Board that the word ‘site’ is clearly understood within the industry and that the meaning contended for by the company was ‘artificial’. Although the relevant regulations did not contain a ‘bright line’ definition of the word, it was not ambiguous and was to be construed in accordance with the general understanding of those working within the industry.

The court understood why the company felt aggrieved by the way in which the levy was applied to its employees and acknowledged that the industry-wide scheme involves  a ‘one size fits all approach’ that does not sit comfortably with the company’s business model. However, it would not be right to strain the language of the scheme in order to accommodate the company and acceptance of its interpretation would have a very wide ranging impact upon the operation of the scheme.