Court of Appeal Rules on Sleep-ins

In a significant ruling, the Court of Appeal has determined care workers who work ‘sleep-ins’ are not entitled to be paid the national minimum wage for every hour of a sleep-in.

Background

In 2017, the Employment Appeal Tribunal (EAT) considered a number of claims regarding support workers for vulnerable adults who stayed at their place of work during night shifts, known as ‘sleep-ins’. The question for the EAT was whether those employees working sleep-in shifts were entitled to be paid the national minimum wage for each hour of that shift under the National Minimum Wage Regulations (the Regulations). At that time, it was common practice for such workers to be paid a small fixed allowance for sleep-ins which equated to an average hourly rate of less than the national minimum wage.

In considering how such shifts should be dealt with under the Regulations, the EAT developed a “multi-factorial” approach, finding that the facts of each case needed to be examined including the details of the arrangements regarding the sleep-in and the terms of the employment contract. Taking into account these factors, where workers were working merely by being present at the employer’s premises they would be considered ‘working’ and entitled to be paid minimum wage for each hour of the shift. However, where workers were simply provided with sleeping accommodation and were on-call, they would be ‘available for work’ and fall under an exemption in the Regulations which meant they were only entitled to be paid the minimum wage for those hours they were awake and performing their duties.

The EAT considered that the support workers fell under the category of ‘working’ rather than ‘available for work’ and so were entitled to be paid the national minimum wage for each hour of the sleep-in. This decision was appealed to the Court of Appeal.

Court of Appeal Decision

In an unexpected turn of events, the Court of Appeal rejected the approach of the EAT and found that time spent by care staff asleep was not time in which they were working. Under a ‘common-sense’ reading of the Regulations, the court determined that time spent at a sleep-in should always be considered time spent ‘available for work’ so that workers are only entitled to be paid for time when they are awake and performing their duties.

Comment

This ruling will be welcomed by many employers within the care sector who were concerned about the potentially significant financial implications of making back payments to affected staff and whether they should join the Social Care Compliance Scheme in order to manage such payments.

However, although permission to appeal was denied by the Court of Appeal, it is still open to the Claimants to apply for permission directly to the Supreme Court, so it may be that the issue of national minimum wage for sleep-ins has yet to be finally determined.

If you would like to discuss this case further, please contact your usual contact in the Employment and Pensions team.

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