Care home workers carrying out sleep-in shifts do not have to be paid in full for the purposes of the National Minimum Wage Regulations (NMW), according to an important decision handed down by the court of appeal on Friday, which reversed previous case law in this area. However, this may not be the end of the matter as Unison have indicated that they intend to appeal. This decision was also fact specific – there may still be certain situations where subtle distinctions in the facts may lead to a different result.

Background

While previously a flat rate sleepers allowance was considered NMW compliant, in 2015 as a result of the case law, the Government changed their NMW guidance to state that in many cases sleeping time should be paid in full. This approach has significantly increased costs within the care sector not to mention the costs associated with claims for back pay. The HMRC announced in July 2017 that they would not take enforcement action in relation to back pay liabilities prior to this date, and would not start enforcement action on this issue until after October 2017.

Facts

The main claimant in this case, Ms Tomlinson-Blake, a care home worker was required to carry out certain sleep-in shifts (in addition to day shifts) at the home of the vulnerable adult she cared for. During her night shifts where she slept from 10 p.m. to 7 a.m. she received a flat rate of £22.35 together with one hour's pay of £6.70, making a total payment for that nine-hour sleep-in of £29.05. No specific tasks were allocated during the shift, but she was required to remain at the house throughout this shift and to keep a “listening ear” out during the night in case her support was needed. The tribunal found that there were only six occasions over the preceding 16 months when the claimant had to get up to intervene during the sleep-in hours.

Decision

Overturning the judgment of both the tribunal and the EAT, the court of appeal ruled that the claimant was not entitled to be paid in full for her sleeping time. Rather she was to be characterised as being “available for work” within the meaning of Regulation 15(1) of the NMW Regulations (i.e. on call) rather than actually working. As a result, the sleep-in exception in Regulation 15(1A) applied. Therefore only time when the worker was awake and working would count for the purposes of the NMW.

The court also rejected an earlier decision of the Employment Appeal Tribunal which attempted to introduce a multi-factorial test to decide whether sleeping time should be counted for NMW purposes.

The court of appeal did go on to explain that this decision “does not undermine the point of principle first established in the British Nursing Association decision, namely that the at home and sleep-in exceptions only apply in cases where the case falls into the “available for work” rather than “actual work” category. It seems clear that there will be cases that fall over the dividing line here. The court referred to the example of a night watchman that had some duties to undertake in addition to sleeping. In these situations it may be expected that the entire period would be classified as actual work.

Comment

With estimates in the media that the back pay liabilities amounted to £400 million, this decision will be welcomed by a care sector which has been facing significant budget cuts for many years.

Those employers who made contractual commitments to pay full NMW rates for sleep-in shifts must remember that they cannot revert to flat rate sleep-in allowances without amending the employment contract. If there is a strong desire to revert to flat rate allowances it would be worth waiting to see if an appeal will be submitted before taking this change of action. We also recommend taking legal advice to ensure the correct process is followed.