To sleep, perchance to dream – but not to earn the Minimum Wage

Answer

In Royal Mencap Society v Tomlinson-Blake (2018), the Court of Appeal ruled that workers who work overnight sleep-in shifts in the care sector are not entitled to be paid the national minimum wage (NMW) for the entirety of their sleep-in shifts. Rather, they are only entitled to be paid the NMW for hours where they are required to be awake in order to perform a specific activity. 

Background

Under the National Minimum Wage Regulations 2015 (the Regulations), workers are entitled to be paid the NMW for "time work". Time work is work that is paid by reference to the time that a worker works, for example, hourly paid work. All time spent actually working is counted as time work. However, the Regulations state: "Time work includes hours when a worker is available, and required to be available, at or near a place of work for the purposes of working unless the worker is at home". 

The Regulations go on to state that: "Hours when a worker is available only include 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". 

The facts

The claimant, Ms Tomlinson-Blake, was a care support worker who had been employed by Royal Mencap Society (Mencap) since 2004. She was one of a team of care support workers who provided 24-hour care and support to two vulnerable adults at two residential properties. Her work pattern involved working day shifts and also a number of sleep-in shifts. On a sleep-in shift, no specific tasks were allocated to the claimant, but she was obliged to remain at the residence throughout the shift and to keep an ear out during the night in case her support was needed. The claimant was expected to intervene if necessary to provide care and support during the night. If nothing needed to be done during the night, the claimant would be entitled to sleep throughout the shift and was provided with her own bedroom in the residence for doing so. 

The claimant was paid a flat rate of £29.05 for a sleep-in shift. If her sleep was disturbed and she was required to provide support during the night, the claimant was entitled to additional payments. 

The claimant's claim was that she was entitled to have the totality of her hours spent sleeping-in counted as time work for NMW purposes. 

Employment tribunal decision

The case came before the employment tribunal (ET) in 2016. The ET ruled that the whole period of the claimant's sleep-in shifts at Mencap's premises constituted time work within the meaning of the Regulations, irrespective of whether she was sleeping or not. In its decision, the ET observed that the fact that the claimant may have had little or nothing to do during sleep-in shifts and that she was entitled to sleep did not detract from the fact that she was required to be there and on-call to attend if required. In the ET's view, this was far from the situation of a person being on-call where that individual could do whatever he or she wished provided that he or she remained capable of being contacted and responding to contact. The ET therefore held that the claimant was entitled to be paid the NMW for the entirety of her sleep-in shift. 

Employment Appeal Tribunal decision

Mencap's appeal against the ET's decision was heard by the Employment Appeal Tribunal (EAT) in March 2017. The EAT upheld the ET's decision that the claimant was entitled to the NMW for the entirety of her sleep-in shift. 

The EAT held that a multifactorial approach was required to the question of whether an individual on a sleep-in shift was "working", including consideration of:

• the employer's purpose in engaging the worker (eg, a regulatory requirement for someone to be present might indicate that mere presence constitutes working);
• the extent to which the worker's activities are restricted by the requirement to be present;
• the degree of responsibility undertaken by the worker and the duties that might arise; and
• the immediacy of the requirement to provide services if something untoward occurs.

On this analysis, the EAT considered that the claimant was working for the entirety of her sleep-in shift. 

Court of Appeal decision

In a judgment of enormous importance for the care sector, the Court of Appeal overturned the EAT's decision and allowed Mencap's appeal. 

The Court of Appeal held that where a worker is contractually obliged to spend the night at or near their workplace on the basis that they are expected to sleep for all or most of the period, but may be woken if required to undertake some specific activity, then on a straightforward reading of the Regulations those workers will be characterised as being available for work, rather than actually working, and as such fall within the terms of the sleep-in exemption in the Regulations. The result is that they will only be entitled to have their sleep-in hours counted for NMW purposes where they are, and are required to be, awake for the purpose of performing some specific activity. 

Lord Justice Underhill considered this as a matter of principle and acknowledged that previous authorities in this area did not straightforwardly support this analysis. He therefore considered a number of previous cases, in particular Burrow Down Support Services Ltd v Rossiter (2008), which he held to be wrongly decided. He also took into account the report of the Low Pay Commission that led to the Minimum Wage Act. It recommended that the only time that should count for NMW was periods when workers on a sleep-in shift were awake and required to be available for work. In light of this, Underhill held that the Court of Appeal was not bound to come to any different conclusion from that which it had reached on the legislation. The result of this is that the only time that counts for NMW purposes is time when a worker is required to be awake for the purposes of working. 

Comment

This decision is of great importance to employers in the care sector. The potential liability for employers in the sector for back-pay had been estimated at £400 million on the basis of the EAT's decision and threatened the future viability of some care-providers. 

It remains to be seen whether this decision will be appealed to the Supreme Court. 

Anna Martin is a solicitor at Womble Bond Dickinson.