In a decision of particular importance to care providers, the Court of Appeal has considered whether employees sleeping in at their employers’ premises while ‘on call’ are entitled to be paid the National Minimum Wage for the entire shift.

Royal Mencap Society v Tomlinson-Blake [2018] EWCA Civ 1641

Facts

The employee was a ‘sleep in’ care worker at residential accommodation operated by Mencap. During the day, she was paid an hourly rate in accordance with her entitlement to the National Minimum Wage (NMW). During the night, she was paid a flat-rate allowance plus one hour’s pay, to reflect the possibility that she might be woken up. In practice, however, this rarely happened. She claimed that she was entitled to be paid the NMW for the entirety of the sleep-in shift; her claim was upheld by the employment tribunal.

In 2017 the Employment Appeal Tribunal (EAT) held, in three conjoined cases, that the question of whether someone was working during sleep-in shifts was “multi-factorial” (see our summary of this decision). In the Mencap case, the EAT upheld the decision of the employment tribunal that the care worker was performing work, and therefore entitled to be paid the NMW, throughout her shift even when she was asleep. Statutory guidance on the NMW was revised to make it clear that in certain circumstances, such as when there was a statutory requirement for a worker to be present on the premises overnight, individuals sleeping in could be regarded as ‘working’ for the purposes of their entitlement to the NMW.

The Mencap appeal was joined with another case (Shannon v Rampersad) to be heard by the Court of Appeal.

Court of Appeal decision

The Court of Appeal has upheld Mencap’s appeal, finding that sleep-in residential care workers are only entitled to be paid the NMW when they are awake and working. While such workers are asleep, they are available for work but not actually working and therefore not entitled to be paid the NMW. The Court rejected the ‘multi-factorial’ approach established by the EAT in favour of a ‘common-sense’ approach that sleep-in workers are only entitled to the NMW while awake and performing their duties.

Consequences

This decision will be of enormous significance to employers, particularly those in the care sector, who employ sleep-in staff and who were potentially facing claims for very large arrears of pay. HMRC temporarily suspended enforcement action last year in response to concerns over the impact of financial penalties and arrears of pay on social care providers. A Social Care Compliance Scheme was introduced by HMRC to assist providers in identifying what they owed to workers. Providers who elected to take part in the scheme may well have made payments to their workers that would no longer be required in light of the Court of Appeal’s decision in this case.

It is rumoured (but not yet confirmed) that this decision will be further appealed to the Supreme Court.