Royal Mencap Society v Tomlinson- Blake & Shannon v Rampersad and another (T/A Clifton House Residential Home) [2021] UKSC 8

https://www.supremecourt.uk/cases/docs/uksc-2018-0160-judgment.pdf

On 19 March 2021, the Supreme Court ruled that sleep-in care workers are only entitled to be paid the National Minimum Wage (NMW) when they are awake for the purposes of working, not when they are permitted to sleep.

The judgment was delayed due to the tragic passing of Lord Kerr, who presided over the appeal hearings last February with warmth, respect and sharp wit.

Key findings

 A sleep-in care worker, that is to say an individual who is expected to sleep during their shift and only be woken infrequently, is only entitled to the NMW when they are woken for the purposes of work.

As summarised by Lady Arden at [45]: “If the employer has given the worker the hours in question as time to sleep and the only requirement on the worker is to respond to emergency calls, the worker’s time in those hours is not included in the NMW calculation for time work unless the worker actually answers an emergency call. In that event the time he spends answering the call is included. …. It follows that, however many times the sleep-in worker is (contrary to expectation) woken to answer emergency calls, the whole of his shift is not included for NMW purposes. Only the period for which he is actually awake for the purposes of working is included.

Background

Regulation 32 of the National Minimum Wage Regulations 2015 (NMWR 2015) states:

(1)        Time work includes hours when a worker is available, and required to be available, at or near a place of work for the purposes of working unless the worker is at home.

(2)        In paragraph (1), hours when a worker is ‘available’ only includes hours when the worker is awake for the purposes of working, even if a worker by arrangement sleeps at or near a place of work and the employer provides suitable facilities for sleeping.

There are similar provisions in the earlier 1999 Regulations, and in respect of salaried hours work.

Nearly 20 years ago, the Court of Appeal held in British Nursing Association v Inland Revenue [2002] EWCA Civ 494 (“BNA”) that nurses who manned a 24 hour telephone line at night from their homes, who were permitted to sleep between calls, were “working” for the purposes of the NMW throughout their shift. The “sleep” or “at home” exceptions did not therefore come into play.

This set in motion a train of litigation, culminating in the widespread practice, enforced by HMRC, of paying many sleep-in care workers the NMW for the entirety of their shift.

The Court of Appeal judgment in the present case in July 2018 reversed the direction of travel, and today the Supreme Court has arguably gone further.

Supreme Court judgment

The SC held that BNA can no longer be regarded as good law. In three separate judgments, half of their Lordships (Lady Arden and Lord Kitchin) would overrule BNA, with the other two (Lord Carnwath and Lord Wilson) adopting a narrower approach and holding that it should no longer be regarded as authoritative.

Lady Arden held that the EAT and CA in BNA failed to draw a basic distinction between working and being available for work. She held at [57]: “If the worker was only available for work, his activity was distinct from working and, as Lord Kitchin holds, he could not also be within regulation 3. I agree. The two concepts are clear and do not overlap, though they may not always admit of easy application on the facts.

Lord Carnwath, with whom Lord Wilson agrees, considers that BNA started off on the wrong basis as a result of the parties’ mistaken agreement as to the application of regulation 15(1) NMWR 1999 to home working. He held at [82]: “the Court of Appeal (following the employment tribunal) could not properly have held that the employees were working for the whole of the period of their shifts.

Lord Kitchin held at [87] that the “work” and “availability for work” provisions cannot be interpreted separately from one another: “In particular, in the case of a sleep-in worker, as I have defined her, the application of the exception in regulation 15(1) cannot be avoided by arguing that she was performing time work when she was permitted to sleep and was sleeping. The drafter regarded a sleep-in worker as being available for work rather than actually working, but the time in the hours she was permitted to sleep is only treated as time work when she was, and was required to be, awake for the purpose of working.”

What, then, constitutes being “awake for the purposes of working”? At [48] Lady Arden defines this as follows: “the worker must have some duties to perform, such as helping with distributing breakfast to the residents of a home if requested by the day staff or waiting for a call to assist.

Their Lordships do not find that being asleep at work can never justify pay at the NMW. Lord Kitchen finds at [99] that “having a nap” between intermittent tasks is not necessarily inconsistent with a person “working” for NMW purposes. Workers can take some comfort in the fact that, like Underhill LJ in the Court of Appeal, their Lordships do confine the ruling to sleep-in workers. Underhill LJ made repeated references in the CA judgment to sleep-in workers being “expected to sleep” throughout their shifts. Lord Kitchen adopts this definition of a sleep in worker [85].  Lady Arden also places reliance on expectation of sleep.  Helpfully for some workers, she states at [75] “an employee can be employed to be available for work and be permitted to sleep and yet not be a sleep-in worker for the purposes of regulation 15(1). The arrangements covered by regulation 15 are only those where the principal purpose and objective of the arrangement is that the employee will sleep at or near the place of work, and responding to any disturbance during the time allocated for sleep must be subsidiary to that purpose or objective.” (emphasis added)

Implications

  • Back pay

Care providers worried about huge back pay claims will breathe a sigh of relief. The up-to-6-year back pay bill could have reportedly cost the industry £400 million.[1]

  • Payments for sleep-in workers going forward

Employers seeing today’s judgment as an opportunity to reduce sleep in worker pay as a result of the judgment should exercise caution. Attempts to vary contracts of employment unilaterally could result in costly constructive unfair dismissal claims and damage employee relations.

When the Court of Appeal judgment was released Mencap issued a statement[2] saying that they, and many other providers, had been paying sleep-ins at the higher rate and said: “we intend to continue despite the Court’s decision.” They called upon the Government to legislate so that all carers are entitled to this, and their employers are funded accordingly.

Given that the current Government recently increased NHS wages by a measly 1%, legislation to increase the scope of the NMW is unlikely to be forthcoming.  There is a real danger that NHS/local authority funding available for sleep-in carers could be reduced if there is no longer a legal obligation to pay these shifts at NMW levels.

The (independent) Low Pay Commission reports annually. It is likely that they will monitor how the industry reacts to today’s judgment. If we see unscrupulous employers abusing today’s SC’s ruling to justify very low rates of pay for someone having to spend the night away from their home, one would hope that the LPC will make appropriate recommendations. Under the National Minimum Wage Act 1999, the Secretary of State has to report to Parliament if it decides not to implement them.

  • Working time

It is important to note that the judgment only relates to the scope of “work” for the purposes of the NMW. The meaning of “work” for the purposes of the Working Time Regulations has its own separate line of jurisprudence. There is no doubt that that a person on a sleep in shift at work who has to respond immediately is on working time (Jaeger).

  • Home working

Although both Lady Arden and Lord Carnwath expressly acknowledged that the issue of home working was not before the SC, the effect of the ruling that BNA is no longer good law opens the home working issue up to debate.

As stated above, the CA in BNA found that the nurses were “working” throughout their shift, so the “home” or “sleep” exceptions did not come into play. Today’s SC judgement will make it harder for home workers to argue that they are “working” rather than “available for work” at certain times.

As Lord Carnwath notes at [82],  home-working “may well become important in other cases, particularly arising out of the period of the Covid-19 lockdown.”

There is a real risk that those who are using low paid workers currently from their homes may argue that the NMW should not be payable when their workers are not performing duties for the employer. One could envisage, for example, a call centre currently operating remotely as a result of the Covid19 pandemic, seeking to argue that workers are only “available for work” between calls. The “at home” exception would therefore apply. They may therefore decide only to pay their workers for the time spent answering calls.

There are conflicting statements from their Lordships about whether such an argument would succeed.

Lady Arden states at [59]: “The further effect of the home exception is that he is outside the extended meaning of work in regulation 15 and so, for his time to be included in the calculation for NMW purposes, he has to show that he is actually working. He can do this when he is actually performing duties as part of his employment.” (emphasis added)

However, Lord Kitchin later states at [99]: “This does not mean to say that a person cannot be performing time work within the meaning of regulation 3 just because the tasks she is required to undertake are intermittent, however. As Underhill LJ explained at para 56 of his judgment and I agree, there are no doubt many kinds of work which can be and are performed from home and in which tasks only come up intermittently but where a person is still performing time work in the periods between those tasks.” He considers that the busier periods of the night shift in BNA could possibly have fallen in this category. He continues: “Nor is a finding that a person is actually working necessarily inconsistent with that worker making a cup of tea or even having a nap between tasks.” (emphasis added)

We can expect further litigation about the scope of the “home working” exception.

  • “Waking night” carers

Given the points set out above in relation to “expectation of sleep” and working between intermittent tasks, waking night carers who are expected to be awake for most of the night but might be permitted to nap between their duties are likely to still benefit from the NMW throughout their shift.

  • Personal injury claims

Defendants in personal injury claims are likely to argue that the value of long term care packages for individuals who require sleep in care will decrease.

Custom and practice has been to pay the NMW for a whole sleep in shift. It will be a matter for care experts to consider how the market reacts to the SC ruling. As set out above, clients with an existing care package in place cannot simply cut carer wages without financial and practical risk. In order to secure and retain reliable and quality overnight care, it may be necessary to continue to pay NMW rates for a full sleep in shift.

Caspar Glyn QC and Chesca Lord acted for Mr Shannon in the Court of Appeal and Supreme Court.


[1] https://www.theguardian.com/social-care-network/2017/jul/27/employers-cant-foot-400m-care-worker-back-pay-bill-government-must-act-fast

[2] https://web.archive.org/web/20180728075613/https:/www.mencap.org.uk/advice-and-support/stopsleepincrisis