The Employment Appeal Tribunal ("EAT") delivered its judgment last week on a group of cases heard as a collective appeal on the issue of workers' sleep-in shifts and the National Minimum Wage ("NMW").
This issue has caused difficulty in recent years, particularly in the care sector, where it is common practice for workers to be paid a fixed allowance per "sleep-in", rather than an hourly rate.
The National Living Wage ("NLW") introduced a higher NMW rate (currently £7.50 per hour) for workers over the age of 25 last year. The fixed allowance paid to care workers for "sleep-in shifts" will often fall well short of NWL, leaving employers open to possible employment tribunal claims for back-pay for NMW, enforcement action by HMRC and even criminal proceedings.
It was therefore hoped that the EAT would provide some much-needed clarity on this area. However, the Judge emphasised the importance of a multifactorial approach of cases of this nature and said that each case will turn on its own facts.
Whether NMW is payable "depends upon the facts"
The EAT Judge did not therefore create any general rule on the matter, but identified some factors which might help employers to work out whether "sleep-in" time should be paid at NMW:
- If an employer is obliged by law to have an employee present on the premises for any reason, then this may suggest that the worker is in fact working by simply being present, and therefore should be paid at NMW.
- Equally, if the worker would risk facing disciplinary action if they slip away for a while, because their continual presence is essential under their contract of employment, then this also points towards the possibility that they should be paid NMW.
- The degree of responsibility that the worker has, and the immediacy of the requirement to provide assistance in an emergency, are also relevant factors in deciding whether the worker is entitled to NMW. The case of Wray v JW Lees & Co (Brewers) Ltd UKEAT/0102/11/CEA was referred to. In this case the EAT made a distinction between a pub landlord who was required to sleep at the property to deter burglaries, but who had no real responsibilities other than to call the emergency services; and the responsibility falling on a manager in a hotel or a night-sleeper in a home for the disabled.
A "multifactorial approach" to be adopted
The EAT indicated that a multifactorial approach should be adopted, and that no individual factor should be determinative.
The case of Royal Mencap Society v Tomlinson Blake, considered by the EAT in the conjoined appeal provides a good case-study of how this approach should work in practice.
The case involved Mrs Tomlinson Blake who was a highly qualified and extensively trained care worker. As part of her role, she was required to carry out a "sleep-in" shift between the hours of 10pm and 7am at the property two vulnerable adults. The local council was obliged to provide support and care for these adults under a support plan and contracted with Mencap (Mrs Tomlinson Blake's employer) to provide some of that support. The support plan provided for 24-hour support to the adults at their home. During the night, Mrs Tomlinson Blake was able to sleep and was provided with her own bedroom. However, she was obliged to remain in the house throughout the night and keep a listening ear out, in case she was needed, for example, if one of the men was unwell or distressed, or to deal with any emergencies. In reality, the occasions on which Mrs Tomlinson Blake was called upon during the night shifts were few and far between.
Mrs Tomlinson Blake claimed that she was at work simply by being present in the house during her sleep-in shift, whether or not she was awake, and that she was entitled to NMW for the whole of the shift, rather than the allowance of £29.05 that she was paid. The employer argued that the obligation was to be "available" for work at her place of work and that she was not entitled to NMW for time when she was asleep.
The Employment Tribunal agreed with Mrs Tomlinson Blake and found that NMW was payable for the whole of the night shift. It was relevant that Mrs Tomlinson Blake had to be present in the house for the proper performance of her night-shift duties and in order to enable the employer to comply with its legal obligations to provide an appropriate level of care for the service users. There were responsibilities to undertake, even though the frequency of the actual activity was low and Mrs Tomlinson Blake was entitled to sleep. The tribunal found this was far removed from a person being on call, where that individual could do whatever they wished provided that they remained capable of being contacted and capable of responding to contact.
The EAT agreed with the Tribunal's findings and endorsed the approach adopted by the Tribunal in determining whether this worker was entitled to NMW. The EAT judge emphasized the importance of not treating any particular factor as being determinative. In this case, Mencaps' regulatory obligation to have someone on the premises, the obligation on Mrs Tomlinson Blake to be present for the whole of the shift and to exercise her professional judgement to determine whether or not to intervene and if intervention was necessary to do so straightaway were all relevant factors and part of the multifactorial approach that should be applied to these types of cases.
Unfortunately, the Judgment does not provide an easy answer and it is unlikely that this case will be the end of this issue. Mencap have indicated that they are planning to appeal the decision, not because they are against paying their employees "properly", but because of the need for clarity. John Cowman, Director of Services at Mencap has written in his blog "This judgment could leave the organisation in financial crisis, at worst leading to insolvency and at best we may have to consider moving out of providing services altogether, which would create huge job uncertainty for our colleagues. Unless we get clarity on what the law is telling us to do, and providers get the proper funding, the sector and everyone who relies on it is at serious risk. We are sleepwalking into a complete collapse of social care for some of the people who need it most"
Payment of NMW also remain high profile in other areas. "Labour Tsar" David Metcalf was appointed in January 2017 as founding member of the Low Pay Commission to crack down National Minimum Wage abuses. HMRC continue to "name and shame" employers for failing to pay NMW. Hermes have been in the press this week as it has been reported that HMRC are stepping up their inquiry into the low pay of delivery drivers at the firm.
Employers should carefully consider the individual circumstances of their workers and apply the multifactorial approach outlined above in order to establish whether NMW is payable. It may be that a change in working practices needs to be adopted in order to minimise risk.
Chloe Ricciardi is a Senior Associate at Ashfords LLP who specialises in Working Time issues.