The Supreme Court has held in Royal Mencap Society v Tomlinson-Blake that employees are not entitled to the national minimum wage (NMW) for the full duration of their sleep-in shift.
Following this decision we would like to invite you to a webinar to discuss the impact on the care sector on Monday 22 March at 2pm with Angela Buxton, People Director of Mencap, Emma Burrows and Rebecca McGuirk.
It agreed with the Court of Appeal's previous decision in Mencap that they are only entitled to the NMW when they are awake and carrying out duties, rather than being available for work.
The decision will come as a relief to care providers and provides welcome clarity in the sector which has been in a state of uncertainty on this issue for several years. The threat of extensive back-pay claims has now disappeared. In a 2018 survey undertaken by VODG, Trowers & Hamlins and Agenda Consulting 68% of care providers responding said that paying the back pay due would threaten the viability of their organisations. This threat has now gone.
A bit of background
In Mencap the claimant slept by arrangement at her place of work whilst on her sleep-in shift. She was expected to respond to the needs of the people she supported and to respond to and deal with emergencies that might arise.
The case was heard by the employment tribunal and the EAT before going to the Court of Appeal in 2018. While previous courts had taken the view that sleep-ins could be time work, bearing in mind various circumstances, including the requirement to be present for particular hours, The Court of Appeal disagreed. As the claimant slept by arrangement at her place of work, and was provided with suitable facilities for doing so, the Court of Appeal held that she was to be treated as being available for work during those hours and not actually working. As a result the sleep-in exception applied; only those hours during which she was required to be awake should be paid at the NMW.
In the other NMW and sleep-in case which formed the appeal to the Supreme Court (Shannon v Rampersad (t/a Clifton House Residential Home) the EAT (agreeing with the Employment Tribunal) found that a night care assistant in a residential care home was not "working" for the purpose of calculating the NMW simply by being "on-call" in his flat on the premises. He was required to be in a staff flat known as the studio from 10pm until 7am and to respond to any request for assistance by the night care worker on duty at the home, but could sleep if he was not required. In practice, he was very rarely asked to assist. The EAT held that only those hours when he was "awake for the purpose of working" counted towards the NMW.
The Court's decision
The decision from the Supreme Court is very clear. It sets out that it is necessary to draw a clear distinction between whether an individual is actually working or is only available for work. If the latter, it will only be the time that the individual is actually working which counts towards the calculation of the NMW.
In coming to its decision, the Supreme Court, like the Court of Appeal before it, referred to the recommendations of the Low Pay Commission (LPC) in its First Report published in June 1998, which the government largely accepted. It concluded that the report was an important aid to the interpretation of the NMW Regulations, which deal with the calculation of the NMW. The Report, which refers to those required to be on-call who sleep on their employer's premises, states:
"For hours when workers are paid to sleep on the premises, we recommend that workers and employers should agree their allowance, as they do now. But workers should be entitled to the National Minimum Wage for all times when they are awake and required to be available for work."
The Court concluded that the objectives of the provisions of the NMW Regulations designed to deal with the calculation of hours for sleep-in work are those identified by the LPC. This meant that work should normally include time for which a worker was required to be available for work at the place of work. However, in the Court's view "(by implication) that would not apply if the worker was not at the place of work but at home (the home exception). It would also expressly not apply to workers who were required to be on call and to sleep at their employers' premises".
The Supreme Court clearly states in its decision that, "To be available for work a person must be both awake for the purposes of working and not simply awake for his own purposes. This meant that the hours that he is permitted to sleep do not form part of the calculation of his hours for NMW purposes (unless he is woken for work reasons)."
In the course of its judgment, the Court undertook an analysis of previous sleep-in case law in which it has been held that workers on night shifts, are performing work (as opposed to being available to work) throughout their shifts. In considering these decisions it considered that the basic distinction between whether an employee was working or merely available for work had not been properly addressed.
What to consider now
While the legal certainty surrounding sleep-in payments will be welcomed by care providers, it may leave those who have been paying the NMW for sleep-ins facing tough choices.
Now that the law has been clarified, will commissioners be prepared to continue contributing or covering the cost of sleep-ins? It's near the end of the financial year and decisions may be made very quickly by commissioners to stop payments. Where does that leave care providers?
Choosing to stop paying staff for sleep-ins now may mean acting in breach of what has become a contractual entitlement and so the tricky issue of getting staff consent to cease making these payments will have to be tackled. How does a care provider tell staff that it will no longer pay the same for sleep-ins, by top-ups or separately?
There's also the important issue of staff morale. In a sector already facing chronic recruitment and retention problems, anything which reduces the pay of social care workers will make it difficult for providers to find motivated staff who feel valued for the work they do. What remains clear is the need for public dialogue to help resolve the funding of care services in the future, and to ensure that recruitment does not suffer. So while the legal position is now very clear, this knotty issue is still contentious.