The use of large up-front fees and disproportionate deposits has already resulted in significant cost consequences for one care provider.
The EAT agreed that, based on the facts and the legal arguments adopted by Mrs Tomlinson-Blake and Mencap, the Tribunal was entitled to reach their conclusion, namely that all hours of the sleep-in should count as time worked for National Minimum Wage (NMW) purposes.
The Judgment (available at the bottom of this ebriefing) sets out the legislative provisions considered in paragraphs 5-46, the key facts of the Mencap case at paragraphs 47-50, and the main EAT deliberations and conclusions follow at paragraphs 53-56.
We consider that the main points to take away from this case are:
- The EAT recognised in its Judgment that, for the purposes of calculation, an employee’s hours worked can be categorised by the NMW Regulations as either salaried hours work, time work, output work or unmeasured work. The EAT confirmed that these types of work are not dependent on the duties carried out by the worker, but dependent on the way in which the worker's pay is calculated.
- The EAT noted that ‘time work’ under Regulation 30 is work that is paid for under a worker’s contract by reference to set or varying hours or periods of time, and if payment is made by reference to something other than time, then it is not ‘time work’.
- The question at the heart of the Mencap appeal was whether employees who sleep-in, in order to carry out duties if required, engage in ‘time work’ (under Regulation 30) for the full duration of the sleep-in shift or whether they are working only when they are awake to carry out any relevant duties. The case did not consider the argument as to whether the sleep-in shift, which was paid for as a flat-rate payment (and therefore in our opinion arguably not by reference to time), should be considered ‘time work’ in the first place or whether it should be categorised as ‘unmeasured work’ (under Regulation 44). We believe that this point was not considered on appeal, as the ‘unmeasured work’ argument was not pursued at the initial employment tribunal stage, and therefore could not be advanced in the EAT. This appears to be confirmed at paragraph 51 where the EAT states that Mencap “contended that the obligation on the Claimant during her sleep-in shift was to be “available” at her place of work for the purposes of working and that, as a result of Regulation 32(2) time spent asleep does not count as time work”.
- It is interesting to note, however, that the EAT acknowledged, in paragraph 16, that if work is unmeasured it is Regulation 45 (and not Regulations 30-32 considered in this case), which provides for determining the number of hours of unmeasured work in the pay reference period. The EAT highlighted that Regulation 45 allows the number of hours the worker is likely to spend working in an ‘unmeasured work’ arrangement, to be pre-determined by a written daily average agreement. The EAT further confirmed that ‘the provisions dealing with unmeasured work do not draw the distinction between periods of working and periods of being available for work that is drawn for salaried and time work’.
- In relation to ‘time work’, the EAT explained that the starting point, in considering what time counts as working time, is to consider whether the individual is working during the entire period that they are at work. As the EAT agreed with the Tribunal’s findings that Mrs Tomlinson-Blake was working during the entire period merely by being present (including in the periods where she was permitted to sleep) it concluded that consideration did not need to be given to Regulation 32 (which deals with the exemption in relation to sleeping time). The EAT accepted that mere presence will not always lead to the conclusion that the individual is working, and each case has to be determined on its own facts; however, the EAT highlighted the following potentially relevant factors in determining whether a person is working by merely being present (paragraph 44):
“The employer’s particular purpose in engaging the worker may be relevant to the extent that it informs what the worker might be expected or required to do: for example, if the employer is subject to a regulatory or contractual requirement to have someone present during the particular period the worker is engaged to be present, that might indicate whether, and the extent to which, the worker is working by simply being present.”
“The extent to which the worker’s activities are restricted by the requirement to be present and at the disposal of the employer may be relevant. This may include considering the extent to which the worker is required to remain on the premises throughout the shift on pain of discipline if he or she slips away to do something else.”
“The degree of responsibility undertaken by the worker may be relevant: see Wray & J W Lees at  where the EAT distinguished between the limited degree of responsibility in sleeping in at the premises to call out the emergency services in case of a break-in or a fire on the one hand, and a night sleeper in a home for the disabled where a heavier personal responsibility is placed on the worker in relation to duties that might have to be performed during the night.”
“The immediacy of the requirement to provide services if something untoward occurs or an emergency arises may also be relevant. In this regard, it may be relevant to determine whether the worker is the person who decides whether to intervene and then intervenes when necessary, or whether the worker is woken as and when needed by another worker with immediate responsibility for intervening.”
- The EAT highlighted, at paragraph 55, the following facts in the Mencap case, namely that: Mencap had a regulatory obligation to have someone on the premises; it had an obligation to have someone present at a service user’s residence in order to fulfil its own contract with the council; there was the responsibility on Mrs Tomlinson-Blake both to be and remain present throughout the sleeping shift,to keep a listening ear and exercise her professional judgment to determine whether or not to intervene; the employment tribunal was amply entitled to conclude that Mrs Tomlinson-Blake was performing the role of a carer during the sleep-in shift, whether asleep or not, and therefore find that she was working under Regulation 30.
- Finally, the EAT confirmed that compliance with the NMW is assessed by dividing the total eligible remuneration in the relevant reference period by the number of hours worked. The EAT confirmed, therefore, that the requirement is not for every hour to be actually paid at the NMW rate, so long as the average hourly rate is not less than the NMW.
- We agree with Mencap’s arguments in this case and do not consider that the findings of the EAT are consistent with the Government’s intention when they drafted the legislation. However, the position remains that the current interpretation by the courts of the legislation in relation to time work is that time spent asleep at a place of work - where a person can be called on to perform duties - is working time for which they should receive the NMW.
- There is still a possibility that sleep-ins could be argued to constitute ‘unmeasured work’ (under Regulations 44–50 of the NMW Regulations). The Judgment makes it clear, however, that this could only be the case where the worker is not entitled under their contract to be paid for the sleep-in by reference to the time worked. We consider that an ‘unmeasured work’ argument could be pursued where workers are paid a flat rate and that, arguably, only the agreed realistic average of the hours likely to be spent in carrying out duties whilst working ‘unmeasured work’ will count towards calculation of the NMW. However, this legal argument remains untested.
For more information
For further advice or information concerning sleep-ins or National Minimum Wage issues, and how they might affect your organisation, please contact Anna Dabek or Matt Wort. Also, find out how we help health and social care organisations with employment issues here.
You can view the Judgment here.
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