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Supreme Court rules on national minimum wage for sleep-in workers

  • United Kingdom
  • Employment law

22-03-2021

Overview: calculating the national minimum wage

The calculation of the national minimum wage (NMW) is notoriously complicated. What could be reasonably assumed to be a simple method of dividing remuneration by hours to check compliance with the NMW is complicated by the technicalities of the legislation, including complex rules and exemptions around what is and what is not to be taken into account in the calculation.

Over the years, the courts have regularly wrestled with the application of the NMW legislation, which has often proven difficult to apply practically to a wide range of different arrangements and circumstances.

One area that has often vexed the courts in this area is the extent to which someone who is essentially at work but allowed to sleep for the majority, if not all, of a shift is working for the purpose of the NMW legislation. What are classed as periods of work for which the NMW is payable: is it the whole period of the sleep-in time, or just any period where the worker is awake and actually carrying out work? The often conflicting judgements by the courts on this question has compounded the ongoing uncertainty and drawn distinctions on the finest of lines.

This has caused significant issues for certain businesses, including in the care sector where care providers are often contractually required to ensure a 24-hour presence of care workers on site, but where there are no duties for those care workers to carry out during the night other than keep a “listening ear” out for any required assistance from residents.

The Supreme Court has now provided some much-needed certainty on this issue, in the case of Tomlinson-Blake v Royal Mencap Society, joined with Shannon v Rampersad. Specifically, determining that those who by arrangement undertake sleep-in shifts are entitled to be paid the NMW only for the hours when they are awake for the purpose of working and not for the time spent sleeping.

Background

There are specific rules contained in the NMW legislation around sleep-over shifts. In particular, that for those workers who by arrangement sleep at or near a place of work and where facilities are provided for sleeping, only the hours when the worker is awake for the purpose of working are applicable for the purpose of entitlement to the NMW. There is also a “home” exception in the legislation, whereby a worker, if not actually working but who is available for work, may not count time for NMW purposes if they are at home.

The rules around sleep-over shifts for the purpose of the NMW have developed over time but were originally based on the recommendations made in a report by the Low Pay Commission (LPC), a statutory body set up at the time the NMW was first enacted in 1998 to advise on the related legislation and which has continued to have an ongoing authoritative and influential role.  

In the care industry, it is often the case that workers “sleep-in”, being contractually obliged to spend the night at a care home and are provided sleeping facilities and paid a flat rate for sleep-in shifts, with an uplift in the event they are woken when their assistance is required or otherwise awake and working. That practice is consistent with the LPC recommendations made in 1998 that sleep-in workers should receive an allowance and not the NMW unless they were awake for the purposes of working. Based on the wording of the legislation, that position was believed to have legal validity, until case law started to pave the way for workers working a sleepover shift to claim that they were working for the purpose of the NMW legislation even when asleep, with resulting uncertainty in this area.

Royal Mencap Society v Tomlinson-Blake: Supreme Court decision

The Royal Mencap case concerned a care worker, Ms Tomlinson-Blake, supporting vulnerable adults in their home. Ms Tomlinson-Blake’s shifts included a sleep-in shift overnight. During the sleep-in shift, Ms Tomlinson-Blake was allocated no specific tasks, but was required to remain at the home and to keep a “listening ear” out in case her help was needed and to deal with any incidents during the night. Ms Tomlinson-Blake was provided with her own bedroom and the expectation was that she would get an uninterrupted night’s sleep. Ms Tomlinson-Blake was paid £29.05 for the nine hour sleep-in shift.

The Rampersad case concerned a worker, Mr Shannon, who was employed as an on-call night care assistant with live-in accommodation in a top floor flat at a residential care home. Mr Shannon was required to be in the flat overnight and was able to sleep during those hours, but was required to respond to any requests for assistance by the night care worker on duty at the home. Mr Shannon received a nominal sum plus the rent-free accommodation with all utilities.

The question in both cases was whether every hour spent on shift/on-call should count towards the NMW, even when sleeping.

The Supreme Court agreed with the earlier decisions of the Court of Appeal in the cases. Paying particular attention to the LPC recommendations, together with the wording of the legislation and the previous caselaw in this area (some of which it determined was wrongly decided and should be overruled), it determined that the “sleep-in” exception in the legislation applied to Ms Tomlinson-Blake and the “home” exception applied to Mr Shannon. Based on the wording of the legislation, neither was therefore entitled to the NMW for every hour spent on shift/on-call as claimed. Further, that the approach endorsed by the Employment Appeal Tribunal in the Mencap case, namely moving away from the bright-line approach of the legislation and applying a multifactorial test, was incorrect.  

Comment

It has been reported that the case could have cost the care sector £400 million in backdated pay had the Supreme Court allowed the Mencap appeal. With the care industry still reeling from the effects of the pandemic and many homes and care charities arguing that they simply could not afford the costs of backpay in the event of a successful appeal, the dismissal of the appeals will come with a sigh of relief for care sector employers.

For care workers, this is the end of the road for their litigation, unless the Government intervenes to change sleep-in pay policy across the sector. Nothing in the decision of course changes the fact that sleep-in care workers will continue to be entitled to be paid whenever they are awake and carrying out their duties and the LPC will no doubt continue to carefully monitor employers in this sector.

For further information please contact:

Dominique David
Employment law adviser
dominiquedavid@eversheds-sutherland.com
+44 771 420 0760