'Sleep-ins' and the National Minimum Wage: guidance from the EAT
If your organisation relies on staff to be on call overnight, you will know that working out what they should be paid is by no means straightforward.
If your organisation relies on staff to be on call overnight, either to meet regulatory obligations or simply to ensure continuity of service provision, you will know that working out what they should be paid is by no means straightforward.
Where a worker is required to carry out a sleep-in shift should the whole of the shift be counted as working time for the purposes of the National Minimum Wage? Alternatively, are they only working when they are awake carrying out relevant duties?
In the three combined cases of Focus Care Agency Ltd v Roberts; Frudd v The Partington Group Ltd, and Royal Mencap Society v Tomlinson-Blake, the Employment Appeal Tribunal has offered some guidance, which will be particularly useful to employers in the care sector, where these issues most commonly arise.
Unfortunately, this decision confirms that there is no ‘one size fits all’ answer to this common issue but provides a framework which may help you work out the position in relation to your own employees.
A multifactorial approach
As so often in employment claims, the EAT emphasised that each case is likely to turn on its own facts. Multiple factors need to be taken into account when deciding whether a worker is working for the whole of their shift (even if they are asleep) or is working only when they are active.
The decision sets out four potentially relevant factors to be considered:
- The employer’s particular purpose for engaging the worker (for example is there a regulatory or contractual requirement to have a member of staff present?);
- The extent to which the worker is restricted by the requirement to be present and at the employer’s disposal (for example would the worker be disciplined if they left the premises?);
- The degree of responsibility undertaken by the worker and the type of activities they might be asked to perform; and
- The immediacy of the requirement to provide services if something untoward occurs or an emergency arises.
What did the EAT decide?
This case has clarified that it is not appropriate to decide this type of case ‘by analogy’ (that is by comparison with other previous similar decisions). Instead, in every case, employers should carefully apply the ‘multifactorial test’ to its own working practices. This simplifies the law to some extent as previously it was necessary to consider a number of previous cases on this issue that were difficult to reconcile with each other and with any new set of facts and circumstances.
In the first of the three cases under consideration, Focus Care Agency Ltd v Roberts, the EAT held that the care worker’s contract entitled him to receive the same contractual pay for sleep-in shifts as for day shifts and night shifts where he was not permitted to sleep. However, if the employee’s contract had not answered the question, the multifactorial test should have been used to work out his position.
Frudd v The Partington Group Ltd concerned a married receptionist and warden team at a caravan park who were required to be on-call two nights a week. The Employment Tribunal that first heard the case held that they were only working when called out to an incident, as they were free to remain at home for the rest of the time. However, the EAT sent the case back to the original Tribunal to consider the purpose of the out of hours service, whether they were required to remain on the premises, and the nature and extent of what they might be asked to do.
In Royal Mencap Society v Tomlinson-Blake, the case which is likely to be most relevant for care providers, the EAT held the Tribunal was correct to find that a care worker who provided care for two vulnerable adults with local authority assessed care plans specifying 24 hour support, was working for the entirety of her sleep-in shifts. Given previous EAT authorities this was not perhaps surprising. The Tribunal had carefully considered all relevant factors including the employer’s obligation to have someone at the premises under statute and under its contract with the local authority, the requirement that she remain at the premises throughout the shift, and the fact that she was required personally to decide whether any intervention was necessary and to use her professional skills to assist.
What does this mean for me?
This case is a reminder of how important it is to word contracts of employment carefully to make sure they properly provide for sleep-in work.
You will also need to make sure that any special pay practices you have in place for on-call night workers will stand up to scrutiny in light of the new EAT test.
The consequences of failing to pay the NMW/national living wage are severe and your organisation may face enforcement action by HMRC, heavy financial penalties and possible criminal sanctions for the most serious cases, not to mention ‘naming and shaming’ and the resulting reputational damage that might follow. Workers could also bring claims for unlawful deductions from wages or breach of contract.
This case may also have implications for working time in the context of the Working Time Regulations. Confusingly, there is no direct correlation between working time for the purposes of the NMW and working time for the purposes of the WTR. However, it would seem likely that a person deemed working for NMW purposes will also be deemed working for WTR purposes. So, if a worker is found to be working for their whole sleep-in shift, you may not only have an obligation to pay for the extra time but may also be obliged to provide paid breaks or compensatory rest (for example when a worker undertakes a day shift followed by a night shift).
Frustratingly, we still do not have any definitive guidance from the EAT as to whether organisations can adopt an averaging approach when considering NMW compliance.
It is rumoured that at least one of these cases (Royal Mencap Society v Tomlinson-Blake) will be appealed to the Court of Appeal (although this is yet to be confirmed) so this may not be the last word on this complex issue.
This is a particularly fact sensitive area and, as the EAT Judgment makes clear, differences between cases are easy to state but much harder to identify. If you have any concerns please do not hesitate to get in touch and we will be happy to advise you.
Nick Newman (firstname.lastname@example.org) is an Associate in the Employment, Pensions and Immigration Team and is based in Leeds. Nick has extensive experience of advising care providers and employers in other sectors on all aspects of pay and working time. If you have any questions, please do not hesitate to contact Nick or speak to your usual Weightmans advisor.