The Court of Appeal announced in July 2018 its ground-breaking decision in the case of Royal Mencap Society v Tomlinson-Blake, overturning the Employment Appeal Tribunal's (EAT) decision and ruling that employees on sleep-in shifts are not entitled to be paid the national minimum wage for all of their shift, only the part of the shift where they are required to be awake.
This decision will be a relief to employers, as the sector was facing a £400 million bill for back pay of national minimum wage payments to employees, and millions of pounds of increased wages in the future. Many care providers and charities had warned they would become insolvent.
HM Revenue and Customs (HMRC) introduced its Social Care Compliance Scheme so that employers could disclose any non-compliance, ensure employees were properly paid, and avoid fines. It now remains to be seen how HMRC will deal with the scheme and what will happen to those who have already signed up and made payments.
The Court of Appeal’s decision may be surprising, but it relies on recommendations of the Low Pay Commission’s First Report, published in June 1998, that “the only time that [sleeping in] would count for [national minimum wage] purposes should be ‘when they are awake and required to be available for work'.”
Employees may feel aggrieved that their commitment is not being properly recognised, as sleeping at someone’s house or being close enough to respond in a caring situation is a large responsibility. The fact they are working a 'shift' means they are not in control of their free time, which should arguably be reflected in their pay.
The trade union Unison has confirmed it wishes to appeal to the Supreme Court, so the sector will continue to face uncertainty until this has been heard. Employers would be advised to sit and wait to see the outcome, and start planning now in case the EAT’s decision is reinstated.
Simon DeMaid is employment law partner at Howes Percival
