In the case of Royal Mencap Society v Tomlinson Blake, the Employment Appeal Tribunal (EAT)held that the whole time a worker was on a sleep-in shift was working time for the purposes of the National Minimum Wage (NMW) and not just the time they were disturbed for an emergency.
It also held that a multifactorial evaluation was needed to determine whether a worker was working for the full sleep-in shift, including:
- Regulatory reasons for the employer to have a worker sleeping in (i.e. is it a legal requirement someone be present?);
- The level of restrictions on a worker’s activities during a sleep-in (i.e. would they be disciplined for leaving their post?);
- The degree of responsibility a worker had during a sleep-in shift in respect of the duties they would be expected to carry out; and
- The immediacy of the requirement to carry out duties in an emergency or incident.
While the EAT stated that each case would be sensitive to its own facts, it is now estimated that it will cost the care industry £400m. The Court of Appeal is due to rule on the decision later this year.
In July 2017 the Government announced it would temporarily waive all historic fines for not paying the NMW in the care sector for sleep-ins up to July 26, 2017. However, all underpayments to employees must still be paid.
In November 2017 a new Social Care Compliance Scheme (SCCS) was introduced, which gives employers in the care sector who sign up to the scheme up to a year to identify how much is owed to their workers. At the end of the review the employers will then have up to three months to pay workers any arrears due.
So, while the Government has limited the fines payable for not paying the NMW, it appears to have done nothing to limit the back-pay. A huge liability could hit the industry unless the Mencap decision is overturned.
When the legislation was originally considered the Low Pay Commission prepared a report for Parliament in which it recommended that sleep-ins fall outside the NMW unless “a worker was “awake and required to be available for work”. The Government accepted its report in full, yet the judge did not take the commission’s report into account.
The Government’s own original guidance stated that the NMW would not be paid for sleep-ins unless a worker was awake and required to work.
It is important to remember this is not just a case of business versus individuals. A number of disabled people receive direct payments from local authorities and then arrange for their support themselves including through workers providing sleep-in help. They will be personally liable for the back-pay.
For more information on the issues raised, contact Edward at [email protected] or on 0113 205 6716.