As the end of 2020 beckons, we take a look at what progress the Sterling market has made in its preparations for the end of the London Interbank Offered Rate (LIBOR) on 31 December 2021.
In February 2019, the Supreme Court announced it would hear an appeal against a landmark ruling made in the case of Royal Mencap Society v Tomlinson-Blake.
Whilst providers await the hearing (unlikely to take place before the winter), the Courts have reached a decision in another case, Frudd v Partington Group, that provides some more guidance on how the National Minimum Wage applies to the night shifts in the meantime.
The claimants were wardens and receptionists at a caravan park during the summer season. Their shift pattern included a “day-time shift” for which they were paid an hourly rate and an “on-call shift” from the conclusion of the “day-time shift” until the start of another “day-time shift” the following day. The purpose of being on-call was to deal with customer enquiries or requests for assistance.
The claimants originally argued at the Employment Tribunal stage that they were working for the whole time of their “on-call shift”. The Employment Judge, however, made a distinction between:
- the end of their “day-time shift” and 10 pm, which in the Employment Appeal Tribunal (EAT) judgment was referred to as “the evening period”;
- 10 pm until 7 am, which in the EAT judgment was referred to as “the night period”; and
- the period from 7 am until the start of another “day-time shift”, which in the EAT judgment was referred to as “the early morning period”. The claimants also had other working arrangements in respect of the closed season.
The Employment Tribunal in the first instance found that “the night period” was not time work and did not count as working time for NMW on the basis that after 10 pm, the claimants were not working and were “merely on standby to work”. Only the time spent at call-outs counted as working time.
The claimants did not appeal this finding. On the other hand, in respect of “the evening period”, the Employment Tribunal found that it was time work, making detailed findings as to the requirements placed on the claimants during that period, which included: showing prospective customers around, welcoming late arrivals, giving keys to visitors, conducting evening checks if security guards were not present, dealing with incidents of noise or unruly behaviour and responding to alarm calls, etc. The judge said that the requirement to be on-call during “the evening period” “had a marked effect on the claimants’ leisure time in the evening”. The Employment Tribunal did not directly consider the position in respect of “the early morning period”.
The appeal to the EAT mainly focussed on “the early morning period” and whether it ought to be treated in the same way as “the night period” or “the evening period”.
Firstly, the EAT found that the Employment Tribunal was entitled to distinguish the three periods of on-call time. The EAT was influenced to reach that conclusion by the fact that the contract of employment itself distinguished them to some degree. Secondly, the EAT also commented that the Employment Tribunal’s decision regarding “the night period” and “the evening period” was consistent with the current law. In particular, the EAT commented on “the evening period” and highlighted the range of duties that the claimants had to perform during this time, making it “plainly” obvious that the claimants were working. Finally, in respect of “the early morning period”, the EAT accepted that the Employment Tribunal did not directly consider it as part of its judgment, and the matter has been remitted to the Tribunal for reconsideration.
This case highlights the message that employers don’t want to hear; when it comes to calculating NMW entitlement, one size does not fit all. Good news for a flexible workforce, not such happy news when employing workers whose hours are neither regular nor easy to quantify.
The Judge looked at the merits and details of the case – he noted the “marked effect on their [the claimants’] leisure time” during their evening shifts – and was not afraid to take these and other details into account when making his decision.
We would advise the following in light of the EAT’s decision;
- In relation to sleep-ins, the position remains that duties and tasks employees are expected to undertake are crucial in determining what time counts as working time, and therefore arrangements must be clear that workers on sleep-in shifts have no on-going duties during the night and are expected to sleep;
- Be clear about different periods of work regarding any on-call time; ensure that you set out what “work” is required during those periods and how workers are remunerated for those times, taking into consideration the different ways compliance is calculated in relation to “time work”; “salaried work” and “unmeasured work”; and
- Ensure that any operational arrangements that you have are correctly reflected within the contracts of employment to make the position clear both for the employees/workers and the HMRC.
For more information
We have worked with a significant number of providers reviewing and implementing changes to their working arrangements, contracts of employment and other employment and operational documents, to ensure full compliance with the NMW rules, whilst at the same time minimising the impact on the existing operational arrangements. If you require advice on this issue please contact Anna Dabek.
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