In a highly anticipated case, the Supreme Court has decided that care workers carrying out sleep-in shifts are only entitled to the National Minimum Wage (NMW) for the hours they are awake and working.
The decision, which focused on the statutory framework for the NMW, has provided welcome clarity on the law in this area. Aside from the legal implications, wider social concerns remain about funding of the care sector, which we explore further below.
Facts and background to decision
Under the National Minimum Wage Regulations 2015 (NMW Regulations), a worker’s pay depends on whether the worker is actually working, or whether they are simply ‘available’ to work.
The key issue in this case was how the hours of a sleep-in shift should be characterised for the purposes of the NMW Regulations.
The claimant was employed by the Royal Mencap Society (Mencap) as a care support worker. She provided care to two men with autism in their home and worked a mixture of day shifts and night sleep-in shifts. During the sleep-in shifts, she was allowed to sleep and was required to assist the men under her care if required. She had no set duties during the night. There had been about 6 occasions in 16 months that she had been woken up to provide support during the sleep-in shift. She was paid a flat rate totalling £29.05 for each sleep-in shift.
She claimed that she was entitled to the NMW for the full duration of each sleep-in shift (including the time she was asleep). Both the Employment Tribunal and the Employment Appeal Tribunal agreed with her.
On appeal, the Court of Appeal found that the claimant was ‘available’ for work but not actually working during sleep-in shifts. Because of this distinction, she was only entitled to NMW for the periods she was actually required to work (for example, if one of the men woke up and needed assistance during the night).
Supreme Court decision
The Supreme Court unanimously agreed with the Court of Appeal. The decision held that hours only counted for NMW purposes when a worker is ‘awake for the purposes of working’ and not simply ‘awake for their own purposes’.
The Supreme Court also overruled a long-standing 2003 decision of the Court of Appeal in British Nursing Association v Inland Revenue. That decision found that call centre workers who slept during night shifts and answered the phone as and when it rang were ‘working’ for the duration of the night shift.
The Supreme Court’s approach was guided by the work of the Low Pay Commission (LPC). The LPC is an independent body that advises the government on NMW matters. If the Secretary of State chooses not to implement the LPC’s proposals, it must report to Parliament to explain why. The Supreme Court was persuaded by the fact that the LPC had specifically reported that employers should pay sleep-in workers an agreed allowance and pay the NWM only for periods when workers are awake and required to work.
What does this mean for the care sector?
The judgment will clearly have significant implications for the care sector. It is widely understood that a contrary judgment would have crippled many care providers, resulting in redundancies and a severe gap in care provision for service users. The Supreme Court expressly overruling the British Nursing decision suggests the judgment will have wider repercussions across other sectors.
Organisations across the care sector have urged the government to commission a review of the NMW legislation and pledge appropriate financial support to the sector. Mencap itself emphasised that it contested the case because of the “devastating unfunded back pay liabilities facing providers across the sector” and recognised that a “thorough and meaningful review of the social workforce” was needed. There is likely to be increasing pressure on the government to act given the spotlight that Covid-19 has shone on the care sector. However, government appetite for reform in the near future seems unlikely given the pandemic-induced pressure on government spending.
What does this mean for employers?
Employers considering changes to hours / pay arrangements following the judgment should tread carefully and be alive to the employee relations issues that might follow. For example, employers who currently pay the NMW for sleep-in shifts and plan to vary staff contracts to reflect the judgment run the risk of damaging staff morale and constructive unfair dismissal claims. Employers should make sure that workers are properly paid in line with the NMW, particularly for the periods that any sleep-in workers are ‘awake for the purpose of work’.
We regularly act for a range of clients in the care sector and would be delighted to assist with any queries you might have. You can find contact details for our employment law specialists here.
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 March 24, 2021.