In a case of huge significance for the care sector, the Court of Appeal (“CA”) has decided that care workers carrying out “sleep-in” shifts are not entitled to the national minimum wage (“NMW”) for the whole shift, but only when they are required to be awake and working.

In so ruling, the CA has overturned various earlier decisions of the Employment Appeal Tribunal (“EAT”) and contradictory guidance from HM Revenue & Customs which would have exposed the care sector to claims for arrears of pay worth hundreds of millions of pounds.

Legal background

There are undoubtedly employees who sometimes sleep on the job, but for many workers this is actually part of their role. There are various jobs in which individuals will work night shifts while sleeping for part or all of the time, particularly in the care sector. 

An important question is the pay to which a worker is entitled when sleeping during a shift. Under the National Minimum Wage Regulations 2015, this depends on whether the individual is actually working throughout the period, or is just on call by being required to be available for work:

  • If a worker is working by simply being present at the workplace, he or she will be carrying out “time work” and so entitled to be paid the NMW for the whole of this time, even if sleeping.
  • If a worker is required to be available at or near their place of work for the purposes of working, the NMW rate is only payable for hours when the worker is awake for the purpose of working. In this case, time spent sleeping does not need to be paid at the NMW rate, even if the worker sleeps at the place of work using facilities provided by the employer.

The critical question is whether the worker is still working while asleep, or simply available and ready to work if required. This makes a big difference to the amount that needs to be paid to a night worker.

The Mencap case

The claimant was a care support worker employed by the Royal Mencap Society. She provided care to two men with autism and learning difficulties in their home, working some day shifts and some “sleep-in” shifts.

The claimant did not have any tasks to perform during a sleep-in shift and was merely obliged to remain in the house and be available if needed – for example, if one of the men was ill or needed help. She was positively expected to sleep during this time and had her own bedroom in the house. The need to intervene was real but infrequent – there had been about six occasions in the preceding 16 months when it had arisen. If nothing happened, she would sleep throughout.

For a nine-hour sleep-in shift, the claimant was paid a flat rate of £22.35 plus one hour’s pay of £6.70, totalling £29.05. She claimed that the whole of the shift, including time asleep, was “time work” and so she was entitled to be paid the NMW for the entire period.  

EAT decision  

The EAT considered that there was no bright-line distinction between those “working when asleep” and those available for work, and there needed to be a “multifactorial evaluation”. The starting point was always to consider whether the individual was actually working during the period. If so, they would be engaged in time work and entitled to the NMW while asleep. This issue should be looked at in light of the contract and its context. The fact that a worker had little or nothing to do during certain hours did not mean he or she was not working.

On the basis of this reasoning, the EAT found that the claimant was working and entitled to the NMW while on a sleep-in shift. Mencap appealed this decision to the CA, where it was joined with an appeal against an earlier decision of the EAT that an on-call night care assistant in a residential care home was not entitled to the NMW during periods when he was on the employer’s premises but could be asleep.

The CA’s decision

The CA overturned the EAT’s decision in Mencap, finding that the claimant was only “available for work” and not actually working, while on a sleep-in shift. As such, she was only entitled to the NMW when she was required to be awake and working. The CA dismissed the appeal in the second case.

In reaching this conclusion, the CA took particular note of the first report of the Low Pay Commission (1998) to which the Secretary of State was bound by the National Minimum Wage Act 1998 to have regard. That report illustrated clearly that the Commission had never intended “sleep-in” shifts to be eligible for the NMW.

Commentary

Although it may seem counterintuitive to argue that someone can be working while asleep, all the cases, including this one, confirm that this can be true – and if someone is working, they are entitled to be paid the NMW. The decisions are, as always, fact sensitive.

It was a 2002 Court of Appeal decision that started a number of problems in this area (British Nursing Association v Inland Revenue [2002] EWCA Civ 494). Staff working for the British Nursing Association provided a 24-hour emergency nurse booking service and the night shifts were worked from their homes. They had detailed instructions about answering the phone within four rings and being available to answer calls throughout the shift, but subject to that they could sleep between calls. The CA found that there was no question that workers doing essentially the same work during the day shift were working, even if there was a temporary lull in calls. This analysis applied to the night shift too.

The CA in Mencap, while agreeing with this reasoning, said that the situation in the present case was different. On the facts, the claimant in Mencap was expected to sleep, as opposed to expected to work but allowed to doze in quiet periods.

So, there will be cases where care workers doing night shifts are working, even if they can catch some shut-eye in slack periods. But the Mencap case establishes that the standard sleep-in shift, where the individual is expected to sleep the majority of the time but has to be available “just in case”, is time when someone is merely “available for work” and so not entitled to the NMW.

This is very welcome news for the care sector in particular, which was facing claims for arrears of pay worth hundreds of millions of pounds going back up to six years. Some providers would undoubtedly have been forced to close if required to pay staff the NMW for these historic shifts.  

Bankrupting care providers with large back pay claims would not have been a good outcome for anyone, but Mencap accepts in its statement on the CA’s judgment that this will be disappointing for hardworking care workers who may have been expecting back pay and who “deserve a better deal”. Unison, the trade union which backed the claim, has said that it is considering seeking leave to appeal to the Supreme Court.

Royal Mencap Society v Tomlinson-Blake and another case – judgment available here