Sleep ins

Care Providers finally had some good news with the long-awaited decision in the Mencap Court of Appeal case confirming that they will no longer be required to pay back an estimated £400m in back pay to care staff who previously undertook sleep-in shifts.

The Court of Appeal ('CA') has ruled conclusively that 'the only time that counts for national minimum wage purposes is time when the worker is required to be awake for the purposes of working'. As such, sleep-in staff are no longer entitled to be paid the national minimum wage ('NMW'), on average, for every hour spent on sleep-in shifts, even when such hours are spent sleeping.

Last year the Employment Appeal Tribunal ('EAT') ruled that care staff who undertook sleep-ins should be paid the NMW, even if they spent the entirety of those shifts asleep, meaning that providers were ordered to pay carers who had previously undertaken such shifts anytime in the last six years. This was a further crushing blow to a sector already struggling with local authority cuts, an ageing population and the national living wage.

In this case, the CA undertook a thorough examination of previous case law, the reports of the independent Low Pay Commission (which advises the Government on the NMW and recommends the rates that should be paid) and the NMW Regulations 1999 and 2015 ('NMW Regs.'), which set out, along with the NMW Act 1998, the provisions relating to the NMW.

The analysis of the NMW Regs. was of much interest to commentators, as the EAT in the previous Mencap case had held that they were of no assistance to the question of whether a worker was 'working' for NMW purposes and did not solve the problems of that appeal, something which, on reflection, seems rather odd. The CA clearly disagreed with such an approach and used both the NMW Regs. and the Low Pay Commission's recommendations ('LPC recommendations') as a central tenet for their argument that a sleep-in worker is only working when awake.

In reviewing the NMW Regs. in particular, the CA surmised that a worker who is, and is required to be, (a) available for the purposes of working (b) at or near his or her place of work is entitled to have the time in question counted as time work for NMW purposes unless:

  1. he or she is at home (the 'at home exception') ; or
  2. the arrangment is that they will sleep (and be given facilities for doing so), in which case only those hours will count when they are, and are required to be, awake for the purpose of working (the 'sleep-in exception').

On the face of it, the NMW Regs. had made a specific carve-out in respect of sleep-ins.

Now, the sleep in exception only applies in cases where the worker is required to be available for the purpose of working ('available for work' for short) and not in cases where the worker is 'actually working' (as defined by Regs. 3 and 30 of the NMW Regs.). In the previous Mencap case, the EAT had concluded that sleep-in workers were 'actually working' and therefore they avoided having to consider the two exceptions set out above. Given the position here, it was necessary for the CA to ask first into which of those two categories a worker who is sleeping in falls.

The CA held that this was, however, an 'unnecessarily elaborate approach', regarding as self-evident the intention of the NMW Regs. to deal with the position of sleep-in workers - in short, the fact that they were dealt with as part of the 'available for work' provisions means that they were to be regarded as 'available for work' rather than 'actually working'.

The CA held that it would be incorrect, in a context which distinguishes between 'actually working' and being 'available for work' to describe someone as 'working' when they are positively expected to be asleep throughout all or most of their shift. The CA held that such conclusion would have been necessary on the basis of the NMW Regs alone, but that this conclusion was further reinforced by the fact that it gave effect to the LPC recommendations.

Turning to relevant case law, the CA identified that there were a large number of cases pertinent to the issue of sleep-ins and considered the most relevant cases and their findings in the judgment, firstly identifying the start of the problems in the case law with the CA's decision in 2002 in the case of British Nursing Association v Inland Revenue, where it had been held that BNA nurses working a night shift from their homes and required to answer telephone calls, were actually working throughout their shift.

Further case law was analysed, including the cases of Scottsbridge [2003] and Walton [2003] but perhaps the most important decision forming part of the CA's analysis of the relevant case law was that of the EAT in the 2008 case of Burrow Down Support Services v Rossiter. In this case, R worked for BDSS between November 2001 and July 2006. He attended work from 10pm to 8am, two nights a week. His job involved ensuring the security of the work premises (a care home for people with learning difficulties) and monitoring health and safety. Apart from a quarter of an hour for a handover and an hour to help with breakfasts he could sleep, except where his duties required him to be awake, for example if he needed to investigate noises or deal with anything untoward. He was paid £20 per night for being present, with a separate payment made for when he was awake and working. The EAT, relying on the earlier cases of British Nursing Association and Scottsbridge, held that R was entitled to be paid NMW for the whole of his shift.

In the view of the CA in the latest Mencap case, Burrow Down was wrongly decided, with the CA stating that its reasoning was contrary to the clear meaning of the NMW Regs. and reinforced by the LPC recommendations, Burrow Down having been based on the EAT's understanding of the British Nursing Association decision and, more particularly, Scottsbridge (which concerned a Nightwatchman at a construction site). The CA then proceeded to take go through the Scottsbridge decision and pointed out that the facts of this case could not, as had previously been the case, be easily applied to the care sector, noting subtle but important differences such as the fact that sleep-in workers are given a proper bed in an area set aside for sleeping and do not have significant duties at either the start or end of a shift (beyond mere handover). As a result, the cases could be distinguished.

The CA concluded that there had been a number of decisions of the EAT concerning the NMW rights of workers required to sleep in, mostly but not wholly in the care sector and most of which had followed Burrow Down (for example the leading cases of Whittlestone, Slavikovska and the previous decision in Mencap), on the basis that the workers in question were 'actually working'.

However, since it was now the opinion of the CA that Burrow Down had been wrongly decided, on the premise that it had wrongly decided that sleep-in cases fall into the 'actual working' category, as opposed to the 'available for work' category, this difficult and troublesome case-law can now be put to one side.

Accordingly, the CA were not bound by the aforementioned cases and could properly conclude that sleep-in workers should be characterised (for the purposes of the NMW Regs.) as 'available for work', rather than 'actually working', and therefore could fall within the sleep-in exception. The result is that the only time that counts for NMW purposes is time when the worker is required to be awake for the purposes of working.

It is regretful however that the CA declined to deal with the well-reasoned argument put forward by Care England (an intervener in the case) that the sleep-in shifts undertaken by Mencap's worker (Tomlinson-Blake) constituted 'unmeasured work', with the one hour's pay she received per night constituting a "daily average agreement". This had been a potential solution put forward to providers by practitioners before the CA's decision, although, with the exception of live-in care (relying on the case of Walton), it remains largely untested.

In conclusion, Mencap's argument that the NMW Regs. were clear in that sleep-in staff were not working whilst asleep won the day and finally removes the uncertainty amongst providers over sleep-in shifts.

However, although this latest decision is to be celebrated by providers and welcomed by local authorities it is NOT the end of the story. Urgent clarity is now needed on enforcement action for back payment by HMRC to ensure that no provider will face further action. The Government must also urgently update its guidance on sleep-ins.

As my clients and those who have attended my recent talks on the sleep-ins crisis and HMRC's Social Care Compliance Scheme ('SCCS') will be aware, I had previously advised providers to await the outcome of the Mencap CA case before deciding to enter into the SCCS.

Those providers who have entered into and paid substantial pay arrears to staff for sleep-ins undertaken in the last six years will now surely be asking: Will they get this money back? How will they get it back? Who will pay it back and when? These are serious questions which need answering sooner rather than later. The emphasis is now on both the Government and HMRC to provides the answers to these burning questions.

Providers must also be warned, before popping open the champagne, that there remains a possibility for a further appeal to the Supreme Court and so the sleep-ins row might not be over just this space.