Workplace Law news
The Court of Appeal has today ruled that care providers do not have to pay workers the minimum wage throughout ‘sleep-in shifts’.
This on going claim was made by a care worker of Mencap and had gone in favour of the claimant at the employment tribunal (ET) and employment appeal tribunal (EAT). These decisions had led Mencap to warn that many care providers risked going out of business if they had to pay sleep-in workers in this way
This eagerly awaited judgment will met by the care sector with a huge sigh of relief. Care providers should now review how they remunerate those working sleeping night shifts in light of this judgment.
The claimant was employed by Mencap as a care support worker. She worked a mix of day shifts and overnight ‘sleep-in’ shifts at two residential properties, providing care to individuals with learning difficulties who lived there.
She was obliged to remain at the homes throughout the night shift to be on-call for residents. The claimant had only been required to get up on six occasions in the previous 16 months. Otherwise, she was able to sleep all night.
As was common practice, the claimant received a flat allowance for the whole sleep-in shift. But she claimed that she should be paid at least the minimum wage for the full duration of each sleep-in shift, whether or not she had to attend to a resident or got to sleep all night.
The ET and EAT judgments found that because the claimant could not leave site at night she was deemed to be ‘working’ for minimum wage purposes and so entitled to be paid throughout.
The Court of Appeal judgment overturns the previous decisions. This will be a relief to care providers and those in need of care. Mencap had estimated that the cost across the sector of complying with the earlier judgments would be substantial, including an estimated £400m in underpaid wages that current and former workers could obtain.
Even as the ink dries on today’s judgment, there is plenty for care providers to think about before acting upon it, such as:
- You may have an existing contractual obligation (written or verbal) to pay your workers an hourly rate throughout a sleep-in shift. Today’s judgment itself does not allow you to get out of this obligation. The usual rule that a contract cannot be amended without both employee and employer agreeing continues to apply.
- There is a long history of cases on when the minimum wage is payable in respect of ‘on-call’ work and this is yet another. Many of these cases are ‘fact specific’, as pointed out by the Court of Appeal when justifying not following authorities cited by the claimant. Careful analysis of the similarities and differences between your sleep-in arrangements and those in the Mencap case will need to be carried out to check that this case does apply to your business.
- It is not clear where this judgment leaves employers who signed up to the social care compliance scheme with HMRC. This allowed employers to work with HMRC to identify what they owe workers for sleep-in shifts and avoid potential fines from HMRC for not paying the minimum wage. Can employers sign out of the scheme? Could signing up in the first place be taken to be an admission that you were obliged to pay the minimum wage during sleep-in shifts? We await clarification from the government on this.
- Employers who have settled claims, actual or threatened, based on the earlier judgments may now regret doing so. Whether any settlement payment can now be clawed back will depend upon the wording of the settlement agreement.
- The case could be appealed to the UK Supreme Court, who will have the final say.
For hard pressed care providers, today’s judgment will be a relief. But there is plenty to think about before it will become clear the extent to which this judgment benefits your organisation.
Ben Stepney is a Senior Associate in the Employment Team at Thomson Snell & Passmore LLP, a law firm (firstname.lastname@example.org)