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.
Misconception 1: Following the European Court of Justice case of Tyco, my care workers are entitled to be paid for the time they spend travelling from home to their first appointment and from their last appointment back home.
This is not the case. This case has expanded the definition of working time under the Working Time Regulations. The Working Time Regulations do not cover pay, which is governed by the National Minimum Wage Regulations. If your workers are paid by hourly rates or are salaried, travelling between their home and a place of work is excluded when calculating if the National Minimum Wage (or the National Living Wage for workers aged 25 years and above from April 2016) has been paid.
You should still check your contract wording on this as it may be that your care workers or union representatives may try to argue that their contract entitles them to be paid for this time. It is therefore a good idea to review your contract wording and to consider introducing a travel time policy to clarify the position. The Tyco judgement does mean that this working time should be included when calculating:
- Whether the average working week of 48 hours over a 17 week reference period limit has been exceeded;
- Holiday pay for any employees who accrue their annual leave according to the hours they work (for example, zero hour employees);
- If the worker has had their rest breaks. Workers are entitled to a daily rest break of 20 minutes if they work for 6 hours in a day, a daily rest period of 11 hours’ uninterrupted rest per day and a 24 hour uninterrupted rest period per week or 48 hour uninterrupted rest period over 14 days.
Misconception 2: I need to pay my workers for every hour of a sleep-in.
The cases of Whittlestone and Esparon concluded that where a care worker works a sleep-in shift they were entitled to the National Minimum Wage (“NMW”) for each hour of the sleep-in. These cases relate to time work (hourly paid employees) and salaried work.
However a recent case, Shannon v Rampersad and Rampersad t/a Clifton House Residential Home reached a different view. In this case the Claimant was a salaried worker at a residential care home, Clifton House. Clifton House was regulated by the Care Quality Commission. The care provider had 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. He received a salary of £50 per week which rose to £90 per week. The Claimant was contractually required to be in the flat from 10pm until 7am, but was able to sleep during these hours. He was required to be available 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 workers.
Following the termination of the Claimant’s employment he made a claim in relation to the NMW for his full night on call hours dating back to when the NMW came into force.
The Tribunal found that the Claimant was not entitled to the NMW for every hour that he had been required to be available.
This case 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.
A number of providers pay a flat rate for sleep-ins. Arguably, because this flat rate is calculated according to market rates and/or the complexity of care etc., this is an unmeasured payment method. If a person is working unmeasured time you are able to enter into a daily average agreement with them which specifies the average amount of time they will actually spend awake for the purposes of working each sleep in. If this contains a realistic average and is found to be valid, it means that when calculating if the NMW has been received, only the hours specified in the daily average agreement will count.
Misconception 3: I must pay my care workers an hourly rate for their travel time.
Travel time between appointments must be taken into account when calculating if the NMW has been received. This does not mean that you need to pay a separate hourly rate in relation to travel time. The NMW is calculated by taking all of the eligible pay and dividing it by all of the eligible working hours in each pay reference period. This means that if your hourly rate in respect of contact time is higher than the NMW the excess can be used towards accounting for travel time.
Misconception 4: I pay my workers an additional £2 per hour for working at the weekends. This will be taken into account when calculating if the NMW has been received.
This is not the case. Employers should not rely on enhanced rates of pay to achieve compliance with NMW. Any allowances or payments that are not attributable to the employee’s performance, for example higher rates for anti-social hours or London weighting will not count when calculating if the NMW has been received. However, if these payments are consolidated into standard pay or are attributable to the performance of the worker in carrying out the work (for example a performance bonus), they will count towards the National Minimum Wage.
Misconception 5: I’m safe because I make a calculation at the end of each month and make a top up payment to my staff to make sure that the NMW has been complied with.
There is some risk attached to this as a payment to settle any proceedings which might be brought before a Court or Tribunal will not form part of a worker’s remuneration when calculating if the NMW has been received. If top-up payments need to be made regularly, there is a strong case that pay rates are at considerable risk creating non-compliance with the NMW regulations.
Misconception 6: There is no help for employers when trying to understand the complexities of the NMW.
Anthony Collins Solicitors and UKHCA have drafted a National Minimum Wage Toolkit which explains the general principles and sets out particular scenarios and how it would apply. Whilst we would still suggest that you seek specific advice in relation to your particular circumstances, this guide is a useful starting point and is available free from here.
Disclaimer: Whilst every effort has been made to ensure the accuracy of this article, advice should be taken before action is implemented or refrained from in specific cases. No responsibility can be accepted for action taken or refrained from solely by reference to the contents of this article.
This article was first published on the UKHCA website - www.ukhca.co.uk
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