The Court of Appeal has provided very clear guidance about when sleep-in staff are entitled to receive the National Minimum Wage (NMW).
In Mencap v Tomlinson-Blake and Shannon v Rampersad (t/a Clifton House Residential Home) the Court of Appeal had to decide whether workers who provided sleep-in cover should be paid at the appropriate NMW rate for every hour of that sleep in shift – even if no work is actually performed.
Background
The detailed rules are now contained in the NMW Regulations 2015 (the Regulations), which consolidate the 20 sets of amending Regulations that emerged between 1999 and 2014. However, the Regulations have not made any substantial changes to the law.
Workers in the UK must receive the appropriate NMW or National Living Wage rate for their age, and these rates are usually increased annually in April. Employers don’t have to pay each hour at the relevant rate, provided the average hourly rate – calculated over the relevant pay reference period (how often the worker is paid) – does reflect the appropriate rates.
The Regulations differentiate between four categories of working time for which workers may be paid:
- Time work (work that is paid by reference to the time that a worker works, such as hourly paid work)
- Salaried hours work (where the worker is paid for a fixed number of hours a year, paid in regular instalments)
- Output work (work paid according to the worker’s productivity)
- Unmeasured work (a residual category which catches any other work).
Each category has its own anomalies and, to add to the confusion, a worker may work on more than one basis during the same reference period and, in those circumstances, separate calculations are necessary.
Sleep-in shifts
Payment for sleep-in shifts has been particularly controversial in the care sector, and this has been an area that has been heavily litigated.
Workers who are not working throughout their sleep-in shifts are only entitled to the NMW for any work they do and, if they don’t perform any work, they do not have to receive the NMW.
Facts
In Mencap v Tomlinson-Blake, Mencap were contracted to provide support and care to vulnerable adults. Ms Tomlinson-Blake and others carers provided 24 hour support to two men in their home. She worked either a day shift or a sleep-in shift.
Sleep-in shifts lasted nine hours and she received a flat rate of £29.05 for this. Ms Tomlinson-Blake had her own room and could sleep during the shift, but was required to keep “a listening ear out” during the night and provide support where needed and to respond to any emergencies. The need was “real but infrequent” and Ms Tomlinson-Blake had only had to intervene on six occasions over a period of 16 months.
The employee argued she should receive the NMW for every hour of her sleep-in shift.
In Shannon v Rampersad, Mr Shannon was offered a job as an “on call night care assistant” by his friend who owned a care home. He lived on site in a flat and had to be available from 10pm to 7am each night. He was rarely called upon to help during the night. Following a TUPE transfer, Mr Shannon claimed that he should have received the NMW for all of his night shifts and that he had been underpaid by £240,000.
Decision
The lower courts had found that Ms Tomlinson-Blake was working throughout her sleep in shifts and should have received the NMW for those hours, but Mr Shannon was not as he was only available for work (and was not working).
Under the Regulations, workers who are salaried or paid by the hour are either available for work or actually working. Where someone is available for work at or near their place of work, they must be paid (even if no work is available) at the appropriate NMW rates unless:
- They are at home, or
- The arrangement is that they will sleep and suitable sleeping facilities are provided.
If so, they are only entitled to receive the NMW for any time they are called upon to work. Therefore, if a worker gets up in the night to help a patient, they must be paid for that time, but not any other time when they are in bed or resting.
The Court of Appeal found that both Mr Shannon and Ms Tomlinson-Blake were only “available” to work during their sleep in shifts (rather than actually working) and only had to be paid the NMW if they were asked to work during that time. It took into account a report by the Low Pay Commission, which recommended that workers who were on call and allowed to sleep at their workplace should not have those hours counted for NMW purposes.
Implications
This decision clarifies the law for “on call” workers expected to sleep at their workplace but does not provide an answer in other cases. For example, the Court approved an earlier case where it was found that nurses operating a night-time call service from their homes were working throughout their shifts, even though they could sleep or relax between calls – British Nursing Association v Inland Revenue.
Similarly, a night watchman in Scottbridge v Wright was also deemed to be working throughout his shift, even though there were significant periods of “downtime” when he had no work to do and could sleep on a mattress in his office.
These cases demonstrate that workers who can sleep at work may still be working throughout their shift and there will always be cases where employers have to decide which side of the line their arrangements fall.
This judgment has been welcomed by businesses that rely on sleep-in workers (particularly care homes). However, there are rumours that this case will be appealed to the Supreme Court and therefore this is unlikely to be the end of the matter. We will keep you posted.
Social Care Compliance Scheme
In 2017, following the Employment Appeal Tribunal decision, the Government set-up the Social Care Compliance Scheme to help social care providers comply with their backpay liabilities. The Government changed its guidance on NMW and sleep-in shifts and argued that any worker who provided sleep-in cover and was responsible for dealing with emergencies etc was entitled to be paid the NMW for the entire shift - even if they were asleep the whole time. Clearly, that guidance is now wrong.
At the same time, HMRC encouraged employers to sign-up to its Social Care Compliance scheme to declare how much they had underpaid staff for sleep-in shifts, in exchange for not receiving stiff penalties of up to £20,000 per worker or being publicly named for underpayment of National Minimum Wage.
Employers could only join the scheme if they repaid underpaid NMW and many simply couldn't afford to do so.
In light of the Court of Appeal’s judgment, it appears likely the scheme will be suspended and possibly discontinued, pending the outcome of any attempt to appeal to the Supreme Court.
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Employment update – July 2018
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