No more working while you sleep-in

This is a case which will have a significant impact, particularly on the Care and Nursing sector. 

What was this case about?

In this case, Ms Tomlinson-Blake was a support worker for Mencap, working as part of a team who provided 24 hour care support to the Local Authority.  As part of that role she performed “sleep-in” night shifts at the shared home of two vulnerable adults for whom she provided care. This enabled the Local Authority to comply with its Regulatory Requirement to have someone present 24 hours a day.  She was required to be present at their home overnight and to keep a “listening ear” out, and respond in the case of any emergencies, but was otherwise allowed to sleep during the shift.  The case revealed that call out’s were rare with only 6 in 16 months.  She was paid an allowance of £29.05 per night for the sleep-in shift.  She argued she should have been paid the National Minimum Wage for all of the hours of her sleep-in shift on the basis that she was on call and therefore working throughout that time. 

Background

The legislation relevant to this case is set out in the National Minimum Wage Act 1998 and the National Minimum Wage Regulations 2015 (“NMWR 2015”).  Both of these pieces of legislation provide exceptions to when National Minimum Wage must be paid. The key exception for these purposes is set out in Section 32 of the NMWR 2015: 

“32. Time work where worker is available at or near a place of work

(1) Time work includes hours when a worker is available, and required to be available, at or near a place of work for the purposes of working unless the worker is at home.

(2) In paragraph (1), hours when a worker is “available” only includes hours when the worker is awake for the purposes of working, even if a worker by arrangement sleeps at or near a place of work and the employer provides suitable facilities for sleeping.”

The earlier decision of the Court of Appeal in British Nursing Association v Inland Revenue held that the even though sleeping, someone in Ms Tomlinson-Blake’s position was working throughout the entirety of their shift and entitled to the NMW for the whole shift, not just when they were awake and physically working. 

Why is this important?

For employers ensuring compliance with the NMW Regulations is important for a number of reasons:
(i)     Liability for unpaid/under-paid wages;
(ii)    Enforcement action by HMRC;
(iii)   Criminal sanctions
(iv)   Reputational damage caused by being on a public list of those who have not paid the NMW

Employers generally strive to ensure compliance with the NMW Regulations and pay in full for sleep-in shifts. 

What did the Supreme Court find?

The Supreme Court took into account the report from the Low Pay Commission, which had been instrumental to the construction of the NMW Act 1998 in the first place. The report had recommended that sleep-in workers should not receive the NMW for their hours on shift but should instead receive an allowance for their time, at a level to be agreed between the employee and the employer. Section 32 had been enacted to implement that recommendation.  

The Supreme Court found that the approach used by the Court of Appeal in British Nursing Association v Inland Revenue was incorrect and over-ruled it. Logically it could not be right that a person was considered to be working when they were clearly expected to be asleep.  Instead, it was necessary to look at what the employee is required to do while on sleep-in shift and to draw a distinction between time when an employee was “available to work” i.e. on call, and when they were “awake for the purposes of working” i.e. awake and responding to a call.

If they have to keep a “listening ear” out and respond only in the case of emergencies, then they might be “available to work” but not actually performing work and as a result the exception set out in Section 32 would apply and they would not need to be paid the NMW for the shift. Instead an allowance for their time would be the appropriate way to pay them.

The only time which should be paid at NMW rate was time when the employee was “awake for the purposes of working” i.e. for time spent awake and assisting in the event of an emergency.

Lady Arden found that this was the case no matter how many times the sleep–in worker had to get up during the night to respond to calls i.e. the shift would not convert to a waking night shift just because they got up a certain number of times.  

No guidance was given on the level of allowance which would be appropriate for sleep-in shifts. This is something to be agreed between the employer and employee, although the Supreme Court did note that the LPC had recommended that the Government provide guidance on the appropriate size of allowances to prevent abusive practices by employers.

What does this mean for employers?

This case is generally good news for employers as it will reduce the cost of employing carers to perform sleep-in shifts.  However, there is no guidance on the correct level of allowance for sleep-in shifts.  In any event, Employers should avoid pricing their sleep-in shifts so low that they become undesirable so that employees do not want to do them.

In the meantime, it will be even more essential to have a Sleep-in and Waking Night policy in place where a combination of shifts are to be worked, to set out clearly what is expected in each type of shift and to ensure employees understand how their pay will be calculated.  Employers should also highlight to employees who receive an allowance for  performing sleep-in shifts the importance of recording any time that they do spend responding to a call.

It is important to note that this case did not consider aspects covered by the Working Time Regulations.  Time spent on a sleep-in shift will still count towards calculations of hours worked for the purposes of the Working Time Regulations (for example when calculating statutory rest breaks and 48 hour working week), even though they will not count for the purposes of National Minimum Wage pay calculations.