Two recent cases have rekindled the debate about when time spent at work but sleeping, counts as working time for the purposes of the rules on National Minimum Wage. Below, we review these decisions and what they mean for employers.
In Esparon v Slavikovska a care worker successfully claimed that each hour of a sleep-in shift counted towards the time for which she should receive the minimum wage. A key factor that influenced the outcome was that her employers were required to have a suitable person on the premises, to comply with care home regulations.
In Whittlestone v BJP Home Support Ltd, a care worker successfully argued she had been underpaid in respect of sleep-overs. Key factors were that she was required by her contract to sleep-over, an express term of her contract stated that failure to do so would result in disciplinary action and there was evidence that she could not, as the judge put it, 'slip out for a late night movie or for fish and chips'. A further feature of the Whittlestone case is the finding that time spent travelling between assignments (Mrs Whittlestone had a number of service users to visit during a day) also counted as working time for minimum wage purposes.
What the law says
National minimum wage legislation gives all workers a right to receive a minimum hourly rate of pay calculated by dividing their total pay including flat rate allowances (but not shift premiums) by the number of hours worked in the pay reference period (eg. a month). In determining what counts as working time, regulations 15(1A) and 16(1A) state that workers who are provided with sleeping facilities at their place of work are only entitled to be paid for the time they are awake for the purposes of working. Understandably, many employers have taken this to mean there is no entitlement to minimum wage for hours spent sleeping but it is important to note that this exception only applies if the worker is at or near a place of work 'on call'. In other words, if the worker is working a sleep-over, the above regulations do not come into play at all and all of the time is counted as working time for minimum wage purposes.
What does this mean in practice?
Whilst the case law is confusing, there are broadly four types of working arrangements involving sleeping that tribunals have identified:
1. Where the worker is able to sleep and not working at all, nothing counts as working time
Examples of this are:
- a driver required to stay in overnight accommodation from the conclusion of one job in order to pick up another job nearby;
- a pub manager required to live on the pub premises for security purposes but free to come and go.
2. Where the work consists of physically being there albeit able to sleep, all hours on the premises count as working time
Examples of this include:
- the night watchman required to be on his employer's premises during specified night hours;
- the care home worker whose presence overnight is required to comply with health and safety and fire regulations;
- Miss Slavikovska whose presence overnight was required to comply with care home regulations.
3. Where the sleep-over is part of the core duties, all hours on the premises count as working time
Examples of this include:
- the care home worker who worked two shifts of equal length, one in the night time when they could sleep, and one in the day time and was not paid an additional attendance allowance for the night shift;
- the care home manager with a rent free apartment on site contracted to work 4 days a week to provide 24 hour a day on site cover;
- Mrs Whittlestone, whose contract specified she would be disciplined if not available for on call duties.
4. Where the worker is on-call, only hours the worker is awake for the purpose of working counts as working time
Examples of this include:
- housekeepers in sheltered accommodation whose contracts provide for core hours plus on-call time outside those hours;
- a part time care assistant occupying a flat on-site working 8 core hours and 77 on-call hours.
The significance of the Whittlestone decision is that the EAT there found the distinction in earlier cases between core hours and on-call hours unhelpful - in their view what matters is whether the sleep-over is properly to be regarded as work or not. If it is, all hours count towards the minimum wage. Going forward therefore it may be more difficult to argue a case falls within category four above.
Implications for employers
The implications for employers whose workers fall into category 2 or 3 above who have been excluding sleep-over hours from their calculations could be considerable. Flat rate allowances for shift work count towards total pay but if the averaged out hourly rate is less than the minimum wage there is potential for multi-claimant unlawful deduction from wages claims going back several years (for which there is no tribunal upper limit) and breach of contract claims may be brought before the courts.
Employers should review their working arrangements and assess which category their staff fall in to (on the facts, particularly their contract terms) to determine whether sleeping hours should be taken into account for national minimum wage purposes.