Sleep-in workers and minimum wage entitlements

6 August, 2018

The Court of Appeal has delivered its interpretation of national minimum wage (NMW) laws and their application to sleep-in workers in Royal Mencap Society v Tomlinson-Blake [2018] EWCA Civ 1641. The ruling also considered the case of John Shannon v Jaikishan and Prithee Rampersad (t/a Clifton House Residential Home).

Overturning an earlier Employment Appeal Tribunal decision, the Court determined that sleep-in workers are only entitled to be paid NMW for the time when they are required to be awake for the purpose of working.

The law on the national minimum wage is set out in the National Minimum Wage Regulations 2015. Generally if a worker is required to be available for work, the national minimum wage is payable irrespective of whether the worker is actually awake. However if a worker has an arrangement to sleep at or near their workplace and is provided with suitable facilities for sleeping, the national minimum wage is only payable for the time when the worker is awake for the purpose of working.

The Mencap case

Ms Tomlinson-Blake was a care worker who provided care services to two men with autism and substantial learning difficulties. Under the terms of her employment contract, she was expected to sleep during her night shifts but could be woken up to work if needed. She was paid a flat rate for this work. Generally, Ms Tomlinson-Blake had uninterrupted sleep during these shifts: she had only been required to provide care during the night on 6 occasions in the previous 16 months.

The Employment Tribunal found (and the Employment Appeal Tribunal agreed) that Ms Tomlinson-Blake was actually working for the whole period of her night shifts. This meant that the sleep-in exception outlined above did not apply and she was therefore entitled to receive the national minimum wage for her whole shift.

The Court of Appeal disagreed with this analysis. Although Ms Tomlinson-Blake was required to keep a “listening ear” out during the night, she was only in fact available for work when asleep rather than actually working. Accordingly, the national minimum wage was only payable in respect of that time when Ms Tomlinson-Blake was actually required to be awake for the purpose of working.

Who benefits from this outcome?

From a tax perspective, Mencap and other care providers have gained much-needed clarity from this decision. Previously, HMRC had demanded the income tax due on back pay for sleep-in workers. For this, the potential tax liability across the social care industry had been estimated to amount to £400 million. If care providers were required to meet this liability, the consequences for service delivery could have been severe.

Whilst relieved to avoid this expenditure, Mencap expressed its sympathy for sleep-in workers in a statement following the ruling. Its chair, Derek Lewis, said that “dedicated care workers deserve a better deal”. Mr Lewis also called on the Government for new legislation in this area.

The union Unison has indicated it may appeal to the Supreme Court. It has also echoed Mencap’s calls for legislative change in the approach to sleep-in workers’ pay.

Please contact our Employment team if you require guidance on minimum wage requirements in respect of on-call or standby time.

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