In a significant case for the care sector, the Court of Appeal has decided that care workers carrying out so-called 'sleep-in' shifts are not entitled to the national minimum wage for the whole shift, but rather only when they are required to be awake and working.
In so ruling, the court has overturned various earlier decisions of the Employment Appeal Tribunal (EAT) and contradictory guidance from Her Majesty's Revenue and Customs, which would have exposed the care sector to claims for arrears of pay worth hundreds of millions of pounds.
Although there are employees who sometimes sleep on the job, for many workers this is part of their role. In various jobs individuals work night shifts while sleeping for part or all of the time, particularly in the care sector.
An important question relates to the pay to which a worker is entitled when sleeping during a shift. Under the National Minimum Wage Regulations 2015, this depends on whether the individual is working throughout the period or is just on call by being available for work.
If a worker is working by simply being present at the workplace, they will be carrying out so-called 'time work' and are therefore entitled to be paid the national minimum wage for the whole of this time, even if sleeping.
If a worker must be available at or near their workplace for the purposes of working, the national minimum wage rate is payable only for the hours in which the worker is awake for the purpose of working. In this case, time spent sleeping need not be paid at the national minimum wage rate, even if the worker sleeps at the workplace using facilities provided by the employer.
The key question is whether the worker is still working while asleep, or is simply available and ready to work if required. This has a significant effect on the amount that a night worker must be paid.
In Royal Mencap Society v Tomlinson-Blake the claimant was a care support worker employed by the Royal Mencap Society. She provided care to two men with autism and learning difficulties in their home, working a mixture of day shifts and sleep-in shifts.
The claimant had no tasks to perform during a sleep-in shift and was merely obliged to remain in the house and be available if needed (eg, if one of the men was ill or needed help). She was expected to sleep during this time and had her own bedroom in the house. The need to intervene was real but infrequent, having arisen on six occasions in the preceding 16 months. If nothing happened, she would sleep throughout the night.
For a nine-hour sleep-in shift, the claimant was paid a flat rate of £22.35 plus one hour's pay of £6.70, totalling £29.05. She claimed that the whole of the shift, including time asleep, was time work; therefore, she was entitled to be paid the national minimum wage for the entire period.
The EAT considered that there was no bright-line distinction between those working when asleep and those available for work, and that there needed to be a multifactorial evaluation.
The starting point was to consider whether the individual was working during the period. If so, they would be engaged in time work and entitled to the national minimum wage while asleep. This issue should be considered in light of the contract and its context. The fact that the worker had little or nothing to do during certain hours did not mean that they were not working.
On this basis, the EAT found that the claimant was working and entitled to the national minimum wage while on a sleep-in shift. Mencap appealed the decision to the Court of Appeal, where it was joined with an appeal against an earlier EAT decision which held that an on-call night care assistant in a residential care home was not entitled to the national minimum wage during periods in which he was on the employer's premises but could be asleep.
The Court of Appeal overturned the EAT's decision in Mencap, finding that the claimant was only available for work and not actually working while on a sleep-in shift. As such, she was entitled to the national minimum wage only when she was required to be awake and working. The Court of Appeal dismissed the appeal in the second case.
In reaching this conclusion, the court noted the first report of the Low Pay Commission (1998) to which the secretary of state was bound by the National Minimum Wage Act 1998 to have regard. The report clearly illustrated that the commission never intended for sleep-in shifts to be eligible for the national minimum wage.
Although it may seem counterintuitive to argue that someone can be working while asleep, all cases, including this one, confirm that this can be true – and if someone is working, they are entitled to be paid the national minimum wage. As always, the courts' decisions are fact sensitive.
A 2002 Court of Appeal decision created a number of problems in this area (British Nursing Association v Inland Revenue (2002) EWCA Civ 494). Employees working for the British Nursing Association provided a 24-hour emergency nurse booking service and the night shifts were worked from their homes. The employees had detailed instructions about answering the phone within four rings and being available to answer calls throughout the shift; however, they could sleep between calls. The Court of Appeal found that there was no question that workers doing essentially the same work during the day shift were working, even if there was a temporary lull in calls. This analysis applied to the night shift too.
While agreeing with this reasoning, the Court of Appeal stated that the situation in Mencap was different. On the facts, the claimant in Mencap was expected to sleep, rather than expected to work but allowed to sleep in quiet periods.
As such, there will be cases where care workers doing night shifts are working, even if they can sleep during slack periods, but Mencap establishes that the standard sleep-in shift – where the individual is expected to sleep most of the time but must be available "just in case" – is time when someone is merely available for work and therefore is not entitled to the national minimum wage.
This is welcome news for the care sector, which was facing claims for arrears of pay worth hundreds of millions of pounds going back up to six years. Some providers would have been forced to close if required to pay employees the national minimum wage for these historic shifts.
Bankrupting care providers with large back pay claims would not have been a good outcome for anyone, but Mencap's statement on the Court of Appeal's judgment accepts that this will be disappointing for hardworking care workers who may have been expecting back pay and who "deserve a better deal". Unison, the trade union which backed the claim, has asked the Supreme Court for leave to appeal.
For further information on this topic please contact Bethan Carney at Lewis Silkin by telephone (+44 20 7074 8000?) or email (firstname.lastname@example.org). The Lewis Silkin website can be accessed at www.lewissilkin.com.
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