In the fourth part of our series on contract management pitfalls, we look at the risks arising out of varying the terms of construction contracts.
The most common approach to sleep-in shifts across the care sector has been to pay a flat rate for a sleep in shift, rather than pay an hourly rate for each hour of the sleep in shift. Many providers then reviewed their approach in light of developments in case law. In particular the cases of Whittlestone and Esparon, concluded that where a care worker worked a sleep in shift, they were entitled to the NMW for each hour of the sleep-in shift.
A new Employment Appeal Tribunal (EAT) case, Shannon v Rampersad & Rampersad T/A Clifton House Residential Home UKEAT/0050/15/LA, has just been published which reaches a different view giving a ray of hope for the underfunded care sector on this issue.
The Claimant, Mr Shannon, was employed as a salaried worker at Clifton House - a registered residential care home. Clifton House was regulated and inspected by the Care Quality Commission. Under their statutory obligations, there was no prescribed ratio of care staff required at all times at the home, but the care provider had a responsibility to ensure that staffing levels were appropriate in order to meet the needs of the service users.
The Claimant was employed as a night worker with permanent accommodation in a flat within Clifton House. The Claimant was paid a salary of £50 per week, rising eventually to £90 per week. The Claimant was contractually required to be in the flat from 10pm until 7am, but was able to sleep during those hours. Where needed, the Claimant was required to respond to any request for assistance from another night care worker on duty at the home. In practice, the Claimant was very rarely asked to assist the night care worker. The Claimant also had a day job as a driver with another company.
Following the Claimant’s dismissal from his employment at Clifton House in October 2013, he made a claim for £239,490, being the NMW for his full night on-call hours since the National Minimum Wage Act came into force on 1 April 1999.
The EAT agreed with the findings made by the Employment Tribunal in this case and confirmed that the Claimant was not entitled to the NMW for all hours of the night shift, but only those hours when he was awake and actually carrying out care duties and therefore working.
It was agreed between the parties that the Claimant was engaged in salaried hours work, as defined in Regulation 4 of the National Minimum Wage Regulations 1999 ("NMWR"). In considering whether the Claimant was entitled to be paid for every hour of the sleep-in, the Tribunal was therefore required to consider Regulation 16 of the NMWR (which is equivalent to Regulation 15 on time work considered in Whittlestone and Esparon).
Regulation 16 includes the exemption (as did Regulation 15 on time work) that if a person is engaged on salaried work and they sleep at their place of work and are provided with facilities to do this, only the time when they are awake for the purposes of working will count for the purposes of the NMW. The Tribunal found, which was accepted by the EAT, that this exemption applied and therefore only those times when the Claimant was awake for the purposes of working counted as working hours. This conclusion is different to the decision in Whittlestone where the EAT stated that the exemption only applies for work that would not otherwise count as time work. It is worth highlighting that Whittlestone was considered in this case with the EAT concluding that the particular facts of Whittlestone meant that the worker was simply working by being present, whereas here the Claimant was only required to respond to call for assistance on rare occasions and only time spent when the Claimant was awake for the purpose of working counted as salaried hours in accordance with Regulation 16(1A).
It is also worth highlighting that the Tribunal and the EAT considered the argument used in Esparon that the requirement to undertake night shifts was because of the statutory regulations concerning staffing in care homes. The conclusion in this latest case is that the Claimant's attendance at the premises throughout the night shift was necessary in order for Clifton House to comply with its statutory obligation, but it appears to us that the Judge distinguished this from the statutory duty on the Claimant to undertake care duties during this time. They concluded that the statutory obligation was met by having a waking and sleeping-in member of staff (the Claimant) employed during the night. This seems to draw a distinction between the Claimant being required to be present and carrying out work.
- This case dealt with the 1999 NMW Regulations. It will be equally relevant to the 2015 NMW Regulations which came into force in April 2015.
- This case will also be relevant to situations where a worker is working time work. It highlights the possibility of courts interpreting the legislation in relation to time work, and time spent asleep at a place of work where a person can be called on to perform duties, differently than the EAT has in Whittlestone and Esparon, and therefore concluding that time someone can spend sleeping is not working time for which care workers are entitled to receive the NMW.
- The case again highlights the importance of the arrangements for sleep-ins being clear in relation to what is required of the care worker when on a night shift. The arrangements should make clear that when undertaking a sleep-in care workers are not required to carry out contractual duties, unless asked for assistance and mere presence does not of itself mean that the worker is working.
- The Regulatory obligation to ensure that appropriate staffing levels are in place is not necessarily sufficient to automatically draw a conclusion that any worker required to be present at the service is actually working. Even in those circumstances it is possible to argue that only time when the worker is awake and actually performing work, is the only time for which NMW is payable.
- Once again it does not appear to have been considered whether due to the method of payment, the Claimant was working unmeasured time, as opposed to salaried work. However, this does not appear to be a point which was argued at the EAT.
What should care providers do?
There is now finally an EAT case, which takes into account the previous decisions, and which concludes that employees carrying out a sleep-in duty are only working when actually awake and performing work for salary work purposes. Providers therefore now have a recent decision, albeit one on particularly unique facts, to support the standard approach to sleep-in shifts across the care sector.
Unfortunately, the decision does not provide any certainty and could be appealed. The logic behind rejecting the Whittlestone decision is not clearly explained and there are therefore conflicting EAT authorities. Our advice therefore remains to:
- Check whether employee’s average pay over a pay reference period is above NMW when taking into account every hour of a sleep-in. Being mindful of the increase in the NMW on 1 October to £6.70 and the likely increase to £7.20 for staff aged 25 or over from April 2016.
- Where you are not confident that is the case:
- Ensure you have a clear policy in place in respect of night work which highlights the difference between waking nights and sleep in shifts – explaining what a person working a sleep in shift is free to do.
- Consider to what extent you are required contractually or from a regulatory perspective to have staff “working” as opposed to being present to deal with emergencies.
- In light of the extent of the risks consider structuring your arrangements so as to enable you to argue that your employees undertaking sleep-ins are working unmeasured time, making use of daily average agreements.
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