In this case the EAT found that a care worker required to sleep at a service user's premises was found to be working and entitled to the NMW for the whole period on shift, so even when asleep.
The Care Worker was employed by Mencap to sleep at a service user's home in order to be available to assist the service user if an incident occurred. She was paid a flat rate of £29.05 for the 9 hours she was on shift. She also worked during the day and received £6.70 an hour for that work. The NMW Regulations provide that all workers must receive the NNW or National Living Wage (NLW) as an average for all hours worked in each pay period, for example, over a month if paid monthly.
The Care Worker had her own bedroom and was required to keep a "listening ear" out during the night in case her support was required. She was otherwise free to sleep or use her time as she wished, but she could not leave the premises. She was required to intervene on six occasions in a 16 month period. The EAT found that she was entitled to be paid an amount equivalent to the NLW for the whole period she was on shift, including when she was asleep. It found that the onus was constantly on her to use her professional judgement to decide if she needed to intervene, she was therefore required to be at a place of work and available for working even when no work was available; she was, in reality, paid to be present at work.
The EAT commented that each situation requires a multi-factorial approach, no one single factor is likely to be determinative and the relevance and weight of particular factors will vary with, and depend on, the context and circumstances of the particular case. The EAT has provided useful guidance on the type of factors that would suggest a worker is paid to be present and therefore should be paid even when asleep. These include;
• If the employer's purpose in engaging the worker is in compliance with a contractual or regulatory obligation;
• If the worker's activities are restricted by the requirement to be present and the worker would be disciplined if they left the premises;
• If the worker is responsible to take action.
The case was heard alongside two others. One involved a care worker where there was a CQC requirement to have enough suitably qualified, competent and experienced staff present. There was therefore a waking worker at night who was paid for all hours worked and a sleeping worker who was paid an allowance and not for the hours he or she was asleep. The EAT did not make a decision on the NMW point but did comment that the fact that the worker was required to be at the premises all night did not necessarily mean he was entitled to NMW. Unfortunately there will be no further consideration of that case as the appeal was lost on matters unconnected to the NMW point.
The third case involved workers required to sleep at a caravan site in case of emergencies. The EAT has asked the tribunal to consider the matter again to examine all of the facts before it can be determined whether the worker should be paid for each hour at the caravan park even though the workers are asleep.
What does this mean for employers?
This judgement is consistent with previous EAT and some Court of Appeal cases but is nevertheless a very significant case for the Care Sector, because not only may it mean increased cost in wages, there is also huge scope for claims for back pay dating back six years. The failure to pay NMW carries criminal penalties and fines including, the potential for 100% uplift on arrears of back pay.
Employers should now consider taking the following steps:
• Review all contracts to see if there is a risk that workers are not being paid the NMW;
• Consider making changes to payments going forward including considering if pay can be averaged out so that the worker receives NMW as an average over all hours worked to include the hours at work during a sleep in;
• Consider if the Local Authority will pay more. The Care Act requires Local Authorities to “promote the efficient and effective operation of a market in care and support services”. The statutory guidance states local authorities should seek evidence that “service providers deliver services through staff remunerated so as to retain an effective workforce” and that “remuneration must be at least sufficient to comply with the national minimum wage legislation for hourly pay or equivalent salary”. One option for organisations may be to seek amendments to their contracts with Local Authorities and/or a judicial review of contracts.