National Minimum Wage and 'sleep-in' shifts: What do you need to know?

22 March 2021

Treatment of "sleep-in" shifts for national minimum wage (NMW) purposes is an area that can often cause confusion. Does the full sleep-in shift constitute 'working' for the purposes of the NMW? Alternatively, is the worker only 'working' for NMW payment purposes when they are awake to carry out any relevant duties? The point is particularly significant in the care sector where sleep-in duties commonly arise.

On 19 March 2021, the Supreme Court ruled in the combined judgment in Royal Mencap Society v Tomlinson-Blake and Shannon v Rampersad t/a Clifton House Residential Home that under the NMW sleep-in provisions, an individual who is expected to sleep during their shift and only be woken infrequently (a sleep-in care worker) is only entitled to the NMW when they are awake for the purposes of work. As summarised by the Supreme Court:

“If the employer has given the worker the hours in question as time to sleep and the only requirement on the worker is to respond to emergency calls, the worker's time in those hours is not included in the NMW calculation for time work unless the worker actually answers an emergency call. In that event the time he spends answering the call is included. …. It follows that, however many times the sleep-in worker is (contrary to expectation) woken to answer emergency calls, the whole of his shift is not included for NMW purposes. Only the period for which he is actually awake for the purposes of working is included."

In this article, we take a look at this judgment and what it means for employers.



Why the previous confusion?

Under the NMW legislation, salaried hours workers and time work workers are regarded as working when they are available at or near a place of work, other than their home, for the purpose of doing work and are required to be available for such work except where a worker by arrangement sleeps at or near a place of work, and is provided with suitable facilities for sleeping. In those cases, only time when the worker is awake for the purpose of working is treated as salaried hours work or time work – regulations 27 and 32 National Minimum Wage Regulations 2015.

In July 2018, the Court of Appeal in these cases overturned a number of tribunal and EAT judgments (including these cases) which had increasingly found that in certain circumstances a worker, even though provided with sleeping accommodation and expected to be sleeping for most of the shift, was nevertheless "working" when sleeping merely by being present at the employer's premises ('the pre-July 2018 cases'). Some pre-July 2018 cases in which workers were considered to be 'working' even when sleeping included where:

  • the employer is under a statutory or contractual duty to have a worker on the premises at all times;
  • the worker is unable to leave the premises at any time during the shift; and/or
  • the worker has a degree of responsibility for personally performing duties when needed and making judgments about what is required over and above merely having to call out emergency services.

The pre-July 2018 cases had significant implications for many care providers operating on very tight margins. Not only did many employers need to adjust their pay arrangements going forward, they faced significant back-pay claims as well as potential HMRC enforcement notices and financial penalties of up to £20,000 per employee.

What has the Supreme Court ruled?

As the Supreme Court states "only the period for which [the worker] is actually awake for the purposes of working is included". Quite simply the only time that counts for NMW purposes is the time when the worker is required to be awake and actually carrying out work. Time spent sleeping or awake but not working does not count. Like the earlier Court of Appeal judgment, in reaching its conclusion the Supreme Court relied heavily on the First Report of the Low Pay Commission (LPC) published in June 1998 which states:

"For hours when workers are paid to sleep on the work premises, 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 also stated that the effect of the sleep-in provision cannot be avoided by saying that a sleep-in worker is performing "work" when sleeping with the permission of and by arrangement with the employer. Earlier cases such as the Court of Appeal judgment in British Nursing Association v Inland Revenue [2002] had been wrongly decided as they failed to draw a basic distinction between working and being available for work.

What did this mean for claimants in these cases?

Both Mrs Tomlinson-Blake's and Mr Shannon's claims failed.

  • Royal Mencap Society v Tomlinson-Blake concerned a highly qualified care support worker who provided care for two vulnerable adults. She worked a pattern of two day shifts for which she would be paid a salary with an intervening sleep-in shift for which she received a flat rate. She was paid an additional hourly rate for any time she was woken to perform duties. During the sleep-in shifts she had no specific tasks to carry out and was expected to sleep in an allocated private bedroom, but had to remain on the premises in case her help was needed. In the 16 months before her claim she was called upon in the night on six occasions.

    The tribunal and EAT held that the care worker was 'working' for NMW purposes for the entirety of the sleep-in shift as: 1) the employer was under a legal obligation to have someone at the premises under statute; 2) and under its contract with the local authority, she was required to remain at the premises throughout the shift and; 3) use her professional judgment to determine when intervention was needed in the night and to respond appropriately and promptly.

    The Supreme Court has agreed with the Court of Appeal that the tribunal and EAT were wrong. The care worker slept by arrangement at her place of work and was provided with suitable facilities for doing so. It follows that she is to be treated as being available for work during those hours and not actually working. As such the sleep-in exception applies. The result is that only those hours during which she was required to be awake for the purpose of working count for NMW purposes.
     
  • Shannon v Rampersad t/a Clifton House Residential Home concerned an on-call night care assistant who lived in the top floor flat of a 16 person residential care home. Mr Shannon, was the son of a friend of the home's owner and also worked as a driver for a separate employer. He was given a rent and utilities free flat in the residential home together with a £90 weekly payment. In exchange, he was required to be in his flat from 10:00 pm to 7:00 am (unless otherwise agreed) and required to respond in case the qualified night care worker on duty requested assistance (rare in reality).

    In the circumstances of this case, the Supreme Court, as did the tribunal, EAT and Court of Appeal, all agreed that Mr Shannon could only be considered to be working if and when he was called on to assist the night care worker.

Limit to the Supreme Court ruling

This judgment is limited to circumstances where workers are primarily 'expected to sleep' throughout their shifts with responding to any disturbance during the time allocated for sleep being subsidiary to that purpose or objective. The judgment does not mean that being asleep at work can never require pay at the NMW rate.

There is a difference between those employed to work night shifts who are expected to be awake and working ('waking night workers') and those employed to cover a sleep-in shift who are expected to be sleeping but available to deal with the occasional emergency. Having a nap between intermittent tasks is not necessarily inconsistent with a person 'working' for NMW purposes. For example, a night watchman with periodic patrolling duties throughout the night would be working throughout the shift even if permitted to sleep for short periods between patrols.

What does this mean for employers?

The NMW does not apply to 'sleep-in' shifts unless the worker is required to be awake for the purpose of working.

  1. Back pay claims relief for care providers

    Care providers working on small margins concerned about their back pay liabilities will be relieved, while often low paid sleep-in workers will be disappointed. While the issue is a contentious one from an employee perspective, the potential damage that might have been caused to care providers as a result of a potentially huge cost of backdated claims cannot be ignored. Hopefully the industry can now move forward. The potential back pay bill could have reportedly cost the industry £400 million.
     
  2. Payments for sleep-in workers going forward

    Many care providers have already improved pay for care workers undertaking sleep-in shifts. Care providers should be cautious of seeing this judgment as an opportunity to reduce sleep in worker pay. When the Court of Appeal judgment was released, Mencap issued a statement saying that they, and many other providers, had been paying improved sleep-in rates and have continued to do so. Commercially, to secure and retain reliable and quality overnight care, it may be necessary to continue to do so. Any steps to reduce care worker existing remuneration packages carry legal and practical risk.
     
  3. 'Waking night' carers

    'Waking night' carers who are expected to be awake for most of the night but might be permitted to nap between their duties are very likely to still benefit from the NMW throughout their shift.

If you have any questions relating to this insight or about employment law in general, contact Connie Cliff or Jane Fielding.


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