There is no doubt that care organisations have been financially squeezed in recent years, an issue which was thrown into the public eye after the EAT decision in the Focus cases. This decision, which included the Mencap case, decided that individuals on sleepover shifts were entitled to National Minimum Wage (NMW) for all those hours, whether they were awake or not.
Last week, the Court of Appeal heard the appeal from Mencap and it is safe to say that a lot of employers will be breathing a collective sigh of relief when they learn that the appeal was allowed. The EAT’s decision could have put many smaller organisations out of business as they struggled to cope with increased wages for sleepover shifts and faced potentially forking out for up to 6 years of back pay.
It is worth noting that the appeal of Shannon v Rampersad was also heard by the Court of Appeal. Equally, this case was decided in favour of the employer but it had rather unusual facts so we will focus on the Mencap decision.
What was the case about?
Ms Tomlinson-Blake has been a care worker with Mencap since 2004. She performed her role at two properties for individuals who require 24-hour support in their home at all times. She performed both day and sleep-in shifts, receiving a flat rate of £29.05 for her nine-hour sleepover shifts. Ms Tomlinson-Blake was not allocated any specific tasks during her sleep-in shifts but she did have to stay at the house throughout and keep a listening ear out during the night in case her support is need. She was expected to use her professional judgement in deciding whether to intervene in the event she was roused from her sleep. Over the 16 months before she raised the claim, Ms Tomlinson-Blake had only had to intervene on six occasions during the night.
What was the original decision in the Mencap case and why?
Time work under the NMW Regulations can be split into two categories; actual work and availability for work. Following past case law, both the ET and the EAT had decided that Ms Tomlinson-Blake was actually working for the whole period of her sleep-in shift and therefore all the hours should count as time work for NMW purposes. The ET in particular emphasised the fact the Claimant was required to ‘keep a listening ear’, even whilst asleep. Further, she had to exercise her professional judgment as to when intervention was required.
Why was the appeal allowed?
The Court of Appeal took the view that the ET and the EAT had been wrong to categorise Ms Tomlinson-Blake as actually working for the duration of the sleepover shift. She slept by arrangement at her place of work and was given suitable facilities for doing so. Therefore, she was not actually working but was available for working during those hours.
Where an employee is available for work, there is an exception to whether NMW should be paid for these hours contained within the NMW Regulations. This is the ‘sleep-in exception’ which applies where sleeping facilities are provided and where the worker is positively expected to sleep and not to perform substantive activities but only be available to work if they are called on. The Court of Appeal took a very straightforward reading of the NMW Regulations and read them in line with the Report of the Low Pay Commission, the principles of which are incorporated in the NMW Regulations.
Accordingly, the Regulations and the Report when read together are clear on the fact that workers sleeping in arrangements such as those in Ms Tomlinson-Blake’s case will only be entitled to have their sleep-in hours counted for NMW purposes when they are required to be awake in order to perform some specific activity. It did not matter that the Claimant had to be prepared to be roused or make decisions when she was; she was expected to be asleep for the duration of the night and indeed, for the majority of the time this was the case.
What does this mean for employers?
This will be a welcome decision for any employers who have workers on sleepover shifts, particularly given the uncertainty which has surrounded this issue in recent years.
It is unclear how this decision will interact with the social care compliance scheme that was introduced by the government last year. The aim of this scheme was to ensure that organisations settled any back-pay that was owed to staff for sleepover shifts as a result of the EAT’s decision on NMW. Now HMRC will need to answer questions over whether organisations that have already paid penalties, back pay or compensated through increased wages will be reimbursed for this.
Does this have anything to do with the Working Time Regulations?
What constitutes time worked for NMW purposes is not the same as working time under the Working Time Regulations. These are two separate issues and the Court of Appeal set out clearly in their judgment that they should be treated as such.
Calling the judgment a ‘huge mistake’, UNISON have stated they are considering an appeal to the Supreme Court which means this might not be over just yet.
For those who have already changed contractual terms to reflect the EAT’s judgment, it won’t be as simple as going back to a sleepover allowance rate. Employers would need to seek their employees’ consent which is unlikely to be forthcoming where they have benefited from the change.
It is also worth noting that the Scottish Government has proposed a policy that care workers must be paid the Real Living Wage for sleepover hours. This change is expected to take place during 2018/2019 but no more information has been provided since the announcement was made last year.
If you have any concerns about how this decision might affect your organisation, contact your dedicated Employment Solicitor or HR Consultant today who will be able to help you. We will provide any updates on the social care compliance scheme or a possible Supreme Court appeal as and when they happen.