By Jill Evans, Law Content Analyst, CIPD
Court cases decided in employers’ favour can sometimes leave organisations feeling no better off.
The Court of Appeal recently had to decide, in Royal Mencap Society v Tomlinson-Blake, whether care assistants sleeping overnight at their workplaces, to be on hand for those they care for, were entitled to the National Minimum Wage (NMW) for the whole period, as they claimed, or just when they were awake and working. The court decided the NMW only applied “when the worker is required to be awake for the purposes of working”. In other words, the workers are not entitled to the NMW when they’re asleep.
The decision is pivotal. At stake was an estimated £400 million owed in back pay by care sector organisations to their night-time workers in nursing homes and other residential establishments. But the story does not end there as trade union Unison, which represents the claimant in the case, has asked the Supreme Court if it can appeal the Mencap decision which it considers to be “completely wrong”.
How did this all come about? When the working time regulations were introduced 20 years ago, it was clear that the NMW only applied when sleep-in workers were awake and working. Usually workers have been paid a flat rate for time asleep, and paid in line with the NMW when working.
But case law over the ensuing years has indicated that time asleep could be counted for NMW purposes, although cases have gone both ways on the issue. This culminated in July 2017 in the Employment Appeal Tribunal deciding in the Mencap case that sleep-in time could be eligible for the minimum wage, depending on a range of factors, including the purpose of the sleep-in worker and their degree of responsibility. But having to apply a multi-factorial legal test to decide each case only raised further uncertainty over when the NMW applied.
The government consolidated the regulations and revised its NMW guidance in 2015, at the same time increasing the penalties for non-payment. The 2017 EAT judgment potentially exposed hard-pressed care sector organisations not only to greater HMRC fines, but to underpayment of wages claims stretching back over six years. In response, the government introduced a Social Care Compliance Scheme last year and modified HMRC enforcement of the regulations in the sector. The scheme is likely to be suspended in the light of the latest judgment.
The employer in the case welcomed the CA decision because it removed uncertainty, but regretted that “many hardworking care workers were given false expectations of an entitlement to back pay and must be feeling very disappointed. Dedicated care workers deserve a better deal”. It said it felt obliged to pursue the case because it feared that bankruptcies resulting from the back payments would jeopardise the care of vulnerable people.
Many care sector providers have been paying a higher rate for night work since the EAT judgment last year, and don’t plan to stop now in the light of the latest decision, partly due to a tightening labour market. Mencap is calling on government to legislate so that the care sector is “properly funded and its workers are paid what they deserve in the future”.
So, for the moment, it seems there are no winners in this case.
