As expressed in the judgment, the decision is particularly significant in an area that carries penalties and potential criminal sanctions.
When determining whether or not NMW has been paid, one must calculate the total remuneration in a pay reference period and the number of hours worked in that period. It is therefore necessary to understand which hours count as working time for which NMW is payable and which do not.
This decision relates to time work. Time work includes work that is paid for under a worker’s contract by reference to set or varying hours but which is not salaried under Regulation 30 NMW Regs 2015. (Similar considerations would apply, however, to determining how many hours “work” need to be taken into account in ascertaining whether a worker’s salary covers minimum wage.)
The Multifactorial Approach
The EAT heard three appeals together as they broadly related to the same issue of entitlement to NMW for workers who were permitted to sleep during the periods for which they were claiming.
In her judgment, Simler P observed that the first question for consideration under Regulation 30 NMW Regs 2015 is whether a worker is working by being present at the workplace even during periods where they are permitted to sleep. It was emphasised that the fact that an employee has little or nothing to do during certain hours does not mean that he or she is not working.
In order to decide whether the person is working the EAT determined that a multifactorial approach must be taken. The judgment stressed that no single factor is determinative and the weight each factor carries (if any) will vary according to the facts of the particular case.
Simler P held that alongside consideration of the employment contract, the following were the factors that an employer should take into account:
- The employer’s particular purpose in engaging the worker – this may be relevant to the extent that it informs what the worker might be expected or required to do. By way of example it could be considered whether the worker’s presence is necessary for the employer to comply with any regulatory or contractual requirements.
- The extent to which the worker’s activities are restricted by the requirement to be present and at the disposal of the employer, In this regard, it may be relevant to consider whether the individual could be disciplined if they left their post during the shift.
- The degree of responsibility undertaken by the worker. Under this test, one might, for instance, consider whether the worker is just present to call for assistance or to undertake duties himself.
- The immediacy of the requirement to provide services if something untoward occurs or an emergency arises, for example it may be relevant to determine whether the worker is the individual who decides whether to intervene and then intervenes or whether they are woken as and when their assistance is needed by another worker.
Applying the Test to the Cases
The three conjoined cases were:
Royal Mencap Society v Tomlinson-Blake
The claimant was a care support worker and her duties included a sleep-in shift for which she was paid a flat rate allowance.
The tribunal had held that the whole of the sleep-in shift was time work and the claimant was, therefore, entitled to NMW. This was upheld on appeal.
The determining factors considered were that Mencap had both a regulatory and contractual obligation to have someone on the premises, and the claimant had a continuing responsibility throughout the shift to be at her post and listen out in case she was needed to deal with any incidents. If she had absented herself she could have been subjected to a disciplinary process.
Mr and Mrs Frudd v The Partington Group Ltd
The claimants who were on-site wardens at a caravan park where they lived. They were paid a flat-rate per call-out whilst on call at night in respect of emergencies.
The Tribunal had held that this was not time work and the claimants were only entitled to NMW whilst awake and working.
The EAT remitted the case for a fresh hearing on the basis that the Tribunal had made its decision by reference to previous cases but gave no reasons or explanation for its decision and, crucially, it failed to apply the requisite multifactorial approach. In particular the EAT commented that that the Tribunal should have considered the Respondent’s purpose in employing the Claimants and whether it was necessary for the Claimants to be present throughout the shift to meet the Respondent’s obligations to its customers.
Focus Care Agency Ltd v Roberts
The claimant was a care worker who worked a sleep-in shift during which he could sleep but could be woken to help out a ‘waking night worker’ in the event of an emergency. The ‘waking night worker’ had primary responsibility for the service user.
The Tribunal held that the time on a sleep-in shift was time work for which the claimant was entitled to NMW. However in any event, the claimant was entitled to a higher rate of pay under the terms of his employment contract as the employment contract failed to distinguish between rates of pay for sleep-in shifts and included as part of the Claimant’s job description ‘sleeping-in duties at night’.
The EAT upheld the Tribunal’s decision that the terms of the contract did not express a distinction in pay for the night-shift work despite Focus Care Agency’s assertion that this had been agreed orally. The fact that the Claimant was unaware of his rights meant that the oral agreement was not an effective variation of the contract.
The EAT did not, therefore, need to consider whether these facts would have given rise to the obligation to pay NMW but, as an aside, Simler P did express criticism of the Tribunal for failing to apply the multifactorial approach.
Practical Considerations for Employers
This judgment fails to offer any comfort to employers who use sleep-in workers, where there had been hope that the Employment Appeal Tribunal might row back from what seems to be the current trend of sleep-ins constituting working time. Increasingly it looks as though many employers will need a radical reconsideration of their sleep-in and pay arrangements in order to be NMW compliant. From this perspective, it is – at least – helpful that the Employment Appeal Tribunal have comprehensively addressed and summarised the key factors to be taken into account.
The issues raised in the Focus Care case also serve as a salient warning to employers to ensure that their employment terms do not inadvertently create entitlements to pay over and above National Minimum Wage.
This information is necessarily of a general nature and doesn’t constitute legal advice. This is not a substitute for formal legal advice, given in the context of full information under an engagement with Bates Wells.
All content on this page is correct as of May 5, 2017.