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The differential has a huge impact on workforce costs for the care sector and for all organisations who rely on ‘sleep in’ staff.
The Supreme Court has, today, found in favour of Mencap, and said that only time when workers are awake and working counts towards National Minimum Wage calculations.
In sectors such as the care industry, ‘sleep in’ shifts are commonplace. ‘Sleep in’ shifts are shifts where workers are permitted to sleep whilst at work overnight, but must be available to be woken in order to perform relevant duties if required.
The National Minimum Wage Regulations 2015 (NMW Regulations) provide that a worker who is not actually working may be treated as working if they are available (and are required to be available) at or near a place of work for the purpose of performing work.
However, there are two key exceptions under the NMW Regulations under which these sort of ‘sleep in’ shifts should not be as ‘working time’ for NMW purposes.
1. Where the worker's home is at or near the place of work, the time the worker is entitled to spend at home.
2. Where the worker sleeps at or near a place of work and is provided with suitable facilities for sleeping, time during which the worker is allowed to sleep is not counted.
As the wording of the legislation seemed clear, many in the care sector (and other sectors reliant on 24/7 cover) historically had a practice of paying a fixed payment for sleep in shifts, rather than paying the NMW for each hour of a sleep in.
However, a body of case law developed which cast doubt on whether this was the right approach, beginning with the case of Scottbridge Construction Ltd v Wright . In Scottbridge, the courts held that a night watchman who was permitted to sleep for around 5 hours per night during an overnight shift was required to be paid the NMW for each hour, including the 5 or so hours spent asleep. Further case law over the years only added to this uncertainty. The Supreme Court’s decision in Mencap has been long awaited and hoped to create greater clarity in this area.
In Royal Mencap Society v Tomlinson Blake, the Supreme Court considered whether two care workers, Mrs Tomlinson-Blake and Mr Shannon, were entitled to the NMW for the whole of their ‘sleep in’ shifts or just when they were awake and working.
Mrs Tomlinson-Blake provided care for two men with substantial learning disabilities and who required 24-hour support. Mrs Tomlinson-Blake was required to carry out a ‘sleep in’ shift for a fixed rate and to remain in the private home where the men lived. Mrs Tomlinson-Blake was not obliged to perform specific tasks in the ‘sleep in’ shift but would provide support if an emergency arose or if assistance was required. In the absence of any necessary interventions, she was able to sleep throughout the shift. There were only rare occasions when Mrs Tomlinson-Blake was woken during her sleep-in shift and needed to perform work (around 6 occasions over a 16 month period). Mrs Tomlinson-Blake successfully brought an employment tribunal claim against Mencap, arguing that she was entitled to NMW for all the ‘working’ hours she had spent sleeping.
Mr Shannon worked as an ‘on-call night care assistant’ in a care home, and was provided with free accommodation in a studio flat within the home. He was required to be in the flat from 10pm to 7am. He was able to sleep during those hours, but had to respond to any request for assistance by the night care worker who was awake and on duty at the care home.
As remuneration, in addition to the free accommodation he was paid a flat rate per week during the period of his employment. There were limited occasions where he was required to carry out actual duties during the night. Mr Shannon’s claim for NMW arrears was dismissed by an employment tribunal.
Both Mrs Tomlinson-Blake and Mr Shannon appealed to the EAT, which affirmed the ETs’ decisions. Further appeals were lodged to the Court of Appeal.
The Court of Appeal ruled that the only time that counts for NMW purposes during ‘sleep in’ shifts is the time when the worker is required to be awake for the purposes of working. The Court of Appeal stated that for the remainder of the time, the care workers were treated as being available for work rather than actually working and, therefore, they were not entitled to the NMW when they were asleep. They were only entitled to the NMW when they were actually working.
The Court of Appeal therefore allowed Mencap’s appeal.
The Court of Appeal’s decision came as a welcome relief to the care sector employers and to local authorities, who had struggled to find the additional funds to pay the NMW for sleep-in shifts.
The Supreme Court dismissed the appeal by the employees, finding that time spent sleeping does not count towards ‘working time’ for the purpose of calculating NMW. Only the time when workers are awake for the purpose of working should be counted towards NMW calculations.
In making its findings, the Court said that the NMW Regulations should be interpreted in line with the recommendations of the Low Pay Commission. The Low Pay Commission said that sleep-in workers should receive an allowance or a ‘lump sum’ payment for sleep-in shifts and not the NMW, unless they are awake for the purposes of working.
The Court said that there is a fundamental distinction between ‘working’ and being available for work. For workers who are allowed to sleep during a night shift and are only required to respond when needed, the relevant hours for NMW calculations are the hours when the worker is awake in order to undertake work.
The Court said that the Scottbridge judgment (above) was wrongly decided and is overruled.
The full judgment is available here.
This decision will come as a welcome relief to all organisations relying on ‘sleep in’ staff, and particularly organisations in the care and social housing sectors. The original decisions of the Employment Tribunal and Employment Appeal Tribunal had placed employers in these sectors under huge financial strain. Employers who engage workers on overnight shifts can now be assured that workers are not entitled to count each hour of their sleep-in shift when calculating if they have received the NMW.
This is the final stage of appeal in this long-running litigation, bringing much needed finality to this complex question.
Contributors: Amanda Applegate, Angharad Schell and Sarah Maddock
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at March 2021. Specific advice should be sought for specific cases. For more information see our terms & conditions.
19 March 2021