The Supreme Court has today (19 March 2021) handed down judgment in the cases of Royal Mencap Society v Tomlinson-Blake and Shannon v Rampersad (t/a Clifton House Residential Home). You can read the full judgment on the Supreme Court website.

In a very clear decision, the Supreme Court found that it is only time spent awake and working during a sleep-in that counts as working time for National Minimum Wage (NMW) purposes. Today’s judgment, therefore, puts an end to many years of uncertainty.

Introduction
It is important to highlight that the issues considered by the Supreme Court raise questions of statutory interpretation and not a moral or ethical question of when workers should be entitled to a wage.

While the Supreme Court’s decision means UK care providers no longer face a potentially catastrophic financial outcome that could have jeopardised the care of thousands of people, the issue of the long-term stability of the UK social care sector remains. Central government needs to increase its investment in the social care sector, to enable providers to remunerate staff appropriately for the work they do. We believe that the sector should continue to lobby for a regulated minimum rate for time spent sleeping to be set. The rate could be decided by the Low Pay Commission (LPC) to make it fair for care providers and employees.

The Supreme Court’s reasons
The Supreme Court found that the LPC recommendations when the NMW Regulations were introduced were fundamental to how the regulations should be interpreted.

The Supreme Court highlighted that the recommendation made by the LPC in its First Report, was that “sleep-in workers should receive an allowance and not the NMW unless they were awake for the purposes of working. The LPC drew no distinction between workers who are working and those who are available for work and […] it did not contemplate that a person in the position of a sleeper-in could be said to be actually working if he was permitted to sleep.”

The judgment confirms that the Government was bound to implement those recommendations unless it provided reasons to Parliament for not doing so, which had not happened.

We believe that this has always been the strongest argument in this case. In fact, in 2014, we made submissions to the Government on behalf of a number of umbrella bodies for the care sector as part of the Consultation on the 2015 National Minimum Wage Regulations where we wrote:

“We do not believe that would have been Parliament’s intention when drafting Regulation 15(1A) [now Regulation 32]. That provision was, in our view, designed to ensure that where a worker who sleeps at or near a place of work and is provided with facilities for sleeping and is permitted to use those facilities for sleeping, they are only carrying out time work when the worker is awake and carrying out duties. […] We believe our interpretation of Parliament’s intention is reflected by the Low Pay Commission’s recommendations made at the time the legislation was introduced. We, therefore, consider that it is clear from the Government guidance that the intention behind Regulation 15(1A) was to ensure that somebody working a sleep-in would not be entitled to the minimum wage for every hour of that sleep-in.“

The Supreme Court confirmed that it is clear the drafting of the legislation reflected the intention set by the LPC. There are two separate concepts – actual work and availability for work.

Regulation 32 provides:

“(1) Time work includes hours when a worker is available, and required to be available, at or near a place of work for the purposes of working unless the worker is at home.

(2) In paragraph (1), hours when a worker is 'available' only includes hours when the worker is awake for the purposes of working, even if a worker by arrangement sleeps at or near a place of work and the employer provides suitable facilities for sleeping.”

The Supreme Court confirmed that: “Regulation 32(2) provides in relation to time work that only hours spent awake for the purposes of working are hours when the worker is 'available', and this is so even if the employer has arranged for him to sleep. […]  

Further, specifically on the issue of sleep-ins, the Supreme Court said: “Having regard to the purpose of regulation 32(2), which […] implement the LPC recommendation about sleep-in shifts, the contemplation of the regulations in relation to time work is that a sleep-in worker cannot actually be working for NMW purposes if the arrangement is that he is to be present and sleep on the premises during his hours of work subject only to emergency calls. Accordingly, regulation 32(2) should be treated as applying to all such workers doing time work.”

The Supreme Court has therefore decide that if the employee is undertaking a sleep-in and the only requirement on the worker is to respond to emergency calls, the worker’s time in those hours is not included in the NMW calculation for time work purposes unless the worker actually answers an emergency call. Only the time the worker spends answering the call is included for NMW calculations.

The judgment also helpfully confirmed that “to be available for work a person must be both awake and awake for the purposes of working and not simply awake”.

What about live-in care?
The Supreme Court set out some helpful comments on unmeasured work arrangements. Reading these, we remain of the view that the unmeasured work route and implementation of Daily Average Agreements remains the best route for live-in care.

What should providers do now?

  • If you have been updating employees about the case as it has progressed through the courts, it would seem sensible to now communicate the final decision to them and your proposed approach going forward. How you communicate to your employees the outcome of the judgment will be crucial to how the employees feel about this.
  • Assuming you are currently paying NMW for sleep-ins and this is being funded by commissioners, you will need to seek assurance that funding will continue so that you do not have to change payment arrangements.
  • Review your sleep-ins to assess what payment arrangements you want to and are able to commit to going forward.

As highlighted above, for care sector umbrella bodies, we would advocate for concerted collective action to ensure a minimum rate for sleep-ins with appropriate funding to ensure its delivery.

For more information

If you require further advice on this issue, please contact your usual contact in our employment team or speak with Matthew Wort or Anna Dabek.