We now know what the short-term holds for public procurement at the end of the Brexit transitional period.
So after two days of legal argument, the Supreme Court have now retired to reach their decision in the joined cases of Tomlinson-Blake v the Royal Mencap Society and Shannon v Rampersad. We don’t know when we will get judgement but expect it to be early summer at the earliest. So which way will the Supreme Court go?
It is very hard to call but we are cautiously optimistic that they will accept the argument put forward by Mencap that the National Minimum Wage (NMW) regulations seek to achieve a “bright line” such that in all cases where someone is required to sleep at a place of work and are provided with suitable facilities for sleeping, they are only working when they are awake and working.
During the hearing, Lord Wilson recognised the importance of having clarity for employers in what should be paid given the potential criminal sanctions if the NMW is not paid. The “multi-factorial test” put forward on behalf of Tomlinson-Blake that would have to be applied would make it very hard for any provider to have clarity as to how the NMW regulations would be interpreted in their circumstances.
My feeling is that the judges will want to get through the uncertainty created by the lower courts in various decisions over the years and take a straight forward interpretation of the Regulations, reflecting the intention of parliament at the time. However, they have lots of previous confusion in the cases to wade through so I am afraid we need to wait and see where they end up.
A number of comments were made that could suggest support for the sleep-in workers position. For example, Lord Kitchin recognised how the arguments on behalf of Mencap would mean a worker who expects to be disturbed six times a night would still only be entitled to be paid for their disturbance time. This highlights one of the gaps in the legislation that the courts have effectively been seeking to fill.
If the decision goes in Mencap’s favour, hopefully, the judgement will be sufficiently clear to bring the whole debate to an end, rather than create a new test to be considered. Providers will then need to address their future approach to payment for sleep-ins. Ensuring they remain competitive in the market but working within the financial envelope available.
My view is that the Low Pay Commission should be tasked with recommending a minimum payment for sleep-ins.
If the decision goes against Mencap, it will mean care providers having to assess their payments to workers over the last six years with the potential of HMRC enforcement action against them if there is a shortfall in NMW. The six years will run from a future date – either the date of a Notice of Underpayment being served on the employer or the date a provider joins any new social care compliance scheme that may be established. All eyes would turn to HMRC to see whether and when they will establish a new compliance scheme.
It would also mean an immediate need to ensure NMW is paid for all sleep-ins moving forward, and for funding to be found for that. Providers may wish to engage with their commissioners now to see if they will commit to funding NMW for sleep-ins if the judgement goes against Mencap.
For further advice regarding National Minimum Wage issues please contact Matthew Wort.
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