Sleep-ins – should they form a part of the National Minimum Wage calculation?

The background to the Mencap sleep-in case

The long awaited appeal by Mencap has now been considered by the Employment Appeal Tribunal (EAT). This appeal is based on the way care is provided, predominantly in the social care sector but also has an impact on healthcare providers too. In recognition of the importance to the sector, this appeal was heard by Mrs Justice Simler, the President of the EAT, and brought together three separate appeals. Mencap operate their sleep-ins in common with most social care providers and pay a mostly flat rate sleep-in payment. They were unsuccessful in arguing that the hours during sleep-in shifts were not to be taken into account in calculating the National Minimum Wage.

The facts of the Royal Mencap Society case are straightforward and common throughout the social care sector. Mrs Tomlinson-Blake was a care worker, caring for adults with learning disabilities (in this case, autism) and she received a flat rate payment of £22.35 plus one hour’s pay (£6.70) for a nine hour sleep-in shift. Mrs Tomlinson-Blake contended that her pay therefore fell below the National Minimum Wage and whilst it did not feature in the appeal itself, it is likely that her wages each month (or pay reference period) fell below the National Minimum Wage when taking into account the number of hours contained within her sleep-ins as well as ordinary shifts.

Mrs Tomlinson-Blake was successful in the Employment Tribunal and Mencap appealed. The EAT found that the following were all factors which properly led to the conclusion that Mrs Tomlinson-Blake was “at work” even when asleep (and so those working hours all form a part of the minimum wage calculation):

• Mencap’s obligation to have someone on the premises in accordance with the Health and Social Care Act 2008 (Regulated Activities) Regulations 2014, Regulation 12;
• Mencap’s requirement to have someone present to fulfil their obligations to the Council;
• the responsibility on Mrs Tomlinson-Blake to be present, keep a listening ear and use her professional judgement whether to interfere.

The EAT rejected Mencap’s appeal. Her sleep-in time was part of her working time. The EAT concluded it could not provide the “bright line” clarity sought, instead reasserting that the question of whether sleep-ins (across all industries and sectors) should be taken into account in the minimum wage calculation is a multifactoral decision and takes into account:

• the employer’s purpose (such as having someone present due to regulatory or contractual requirements);
• the extent to which the worker is restricted to staying on the premises;
• the level of responsibility of the worker; and
• the immediacy of the need for the worker to provide services or intervene.

Comment

This appeal was eagerly awaited to provide clarity about sleep-ins. These industry wide arrangements have existed throughout the sector for decades and pre-date the introduction of the National Minimum Wage in 1999.

Even though the EAT was taken to guidance materials describing the intention of the Minimum Wage Regulations (it was argued they were not intended to interfere with already long standing and industry wide sleep-in arrangements), this argument was rejected. In short, the Regulations and guidance could have been drafted to properly reflect arrangements in the social care sector but were not. Even the latest (2016) guidance reflected past case law (summarised in Mencap), rather than assert the long standing industry standards.

This appeal judgment does not create the simple single answer as to whether sleep-ins should “count” or not. Unless there are further appeals, it highlights that standard practices throughout the social care sector will continue to be scrutinised and challenged. Social care providers should carefully consider their own arrangements for sleep-ins. Those arrangements may only be a reflection of industry standard practices or ones inherited from other providers and local authorities, but they should still be reviewed.

When reviewing arrangements (and this can be practical arrangements for sleep-ins, not just what is paid), providers should keep in mind that this appeal judgment does not simply state that each and every hour of a sleep-in should attract the latest National Minimum Wage rate. The assessment of the minimum wage is itself a calculation by reference to the “pay period”.

In reviewing the sleep-in, some issues to consider are:

• what are the obligations (statutory and contractual)?
• what is the purpose of the sleep-in?
• can alternative provisions be made?
• what would be the consequence if the staff were not in attendance?
• what is the pay reference period?
• what payments are made to staff throughout that pay reference period?

Read the full judgment here, and contact us if you’d like further guidance.