Case update (1): National minimum wage – (not) sleeping on the job

Summary:  Is a ‘sleep-in shift time work’ for the purposes of the National Minimum Wage Regulations (NMW Regs)?

No, and nor can it be ‘work’ in any other sense in the NMW Regs, holds the Supreme Court in Royal Mencap Society v Tomlinson-Blake and another case available here.

Background:  The NMW Regs provide that workers are entitled to be paid for hours when they are not actually working but where they are “available, and required to be available, at or near a place of work for the purposes of working“.

However, this is subject to two exceptions, the first of which is when they are at home because their home is near the workplace. The second is the sleep-in exception.  In this case, 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.

Sleep-in shifts are standard practice in the care industry, with workers required to sleep on the premises in case they are required in an emergency. Often such shifts are paid at a fixed flat rate, with additional pay for any time spent actively working.

There has long been debate about the correct pay for sleep-in shifts, primarily whether workers should be paid the national minimum wage (NMW) for the entire time spent at the workplace even when sleeping, or only for time spent awake and working.

A decision of the Court of Appeal in 2002, British Nursing Association v Inland Revenue, held that workers were working (for the purposes of the NMW Regs) during a night shift, even though the work was intermittent and they were permitted to sleep.  However, in general, the case law on when the sleep-in exception applies has been inconsistent and this has now been addressed by the Supreme Court.

Facts:  In the first case, the employee, Mrs Tomlinson-Blake, was a care support worker employed by the Royal Mencap Society, 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.

The employee was required to be present at the vulnerable adults’ home overnight and to keep a “listening ear” out, and respond in the case of any emergencies.  The employee did not have any tasks to perform during a sleep-in shift and was positively expected to sleep during this time and had her own bedroom in the house. The need to intervene was real but infrequent (there had been about six occasions in the preceding 16 months when it had arisen). If nothing happened, she would sleep throughout.

The employee was paid an allowance of £29.05 per night for the sleep-in shift. She argued she should have been paid the NMW for all of the hours of her sleep-in shift on the basis that she was on call and therefore working throughout that time.

In the second case, the employee was Mr Shannon, an on-call night care assistant. He provides care for up 16 elderly residents at a registered residential care home from 10pm to 7am. Again, whilst he was able to sleep during those hours, he had to respond to any requests for assistance for which he received free accommodation and set pay per week. His claim was that the sleep-in hours should be counted as salaried hours work for NMW purposes.

Earlier decisions

In the first case, the Tribunal and the EAT held that the employee was actually working throughout the shift and so entitled to be paid the NMW for the entire shift.   However, the Court of Appeal overturned the EAT’s decision. The Court held the employee was only entitled to be paid NMW for the hours they were actually awake and working. In particular the Court took into account the Low Pay Commission’s 1998 report which recommended that sleep-in workers receive an allowance and not the NMW, unless they were awake for the purposes of working.

In the second case, the Tribunal, EAT and the Court of Appeal dismissed the employee’s claim.

Supreme Court decision

The Supreme Court unanimously dismissed the appeals and found that the employees were not working during the sleep-in shift but rather “available for work”, and so only entitled to the NMW for hours during which then were awake and working. In reaching this decision, the Supreme Court considered it significant that the law on this had been brought in to implement recommendations of the Low Pay Commission (which had been accepted by the Government), including that:

“For hours when workers are paid to sleep on the premises, we recommend that workers and employers should agree their allowance, as they do now. But workers should be entitled to the National Minimum Wage for all times when they are awake and required to be available for work”.

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 a ‘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”.

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.  If the employee only has to keep a “listening ear” out to respond in the case of emergencies, then they might be “available to work” but not actually performing work and as a result the exception in the NMW Regs applies 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 Supreme Court 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.

Implications:  This Supreme Court decision provides much needed certainty for employers about their NMW obligations during sleep-in shifts. The decision means employers do not have to pay NMW arrears to their sleep-in workers and also limits the cost of wages for such shifts going forwards. However, some uncertainty does remain as no guidance has been given on the correct level of payment for these shifts and will be left to employers to price, taking into account employee relations with staff and the need to remain competitive.

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 also important to bear in mind with this decision is that it only relates to the question of whether an individual is working for the purposes of the NMW Regs. It does not change the position under the Working Time Regulations 1998, under which it is already well-established that sleep-in staff are regarded as ‘working’ and therefore entitled to adequate rest breaks in accordance with that legislation.