Don't sleep on National Minimum Wage compliance..

The recent and much-anticipated Supreme Court judgment in the case of Tomlinson-Blake v Royal Mencap Society addressed the issue of whether workers carrying out overnight ‘sleep-in’ shifts in the care sector should be paid the National Minimum Wage for the entire duration of those shifts, including sleeping time.

The judgement held that a care worker was not entitled to be paid the NMW for all the time that they were on a ‘sleep-in’ shift, only the time that they were awake and actually working. This was met with a large sigh of relief by the care sector saving an estimated £400m bill, but will also have broader impacts.

The Court emphasised the distinction in the Regulations between carrying out ‘actual work’ on the one hand and being ‘available for work’ on the other:

As part of the Mencap ruling, the Supreme Court overruled the decision in British Nursing Association v Inland Revenue [2003] ICR 19 in which the Court of Appeal found that workers were working (and should therefore be paid NMW) throughout the night shift even though the work was intermittent and they were permitted to sleep.

Aligned to this, the Court also overruled the decision of Scottbridge Construction Ltd v Wright [2003] IRLR 21 where a night-watchman responsible for answering the phone and security alarms on overnight shifts was viewed to be working throughout the shift, even if he could sleep.

Given this ruling was issued by the Supreme Court, this is the end of the litigation journey for care workers unless the Government changes policy in the future, at a time when pay and care are at the forefront of peoples’ minds.

The decision further highlights the notorious complexity that NMW undoubtedly brings with it.

Uber and NMW

The Uber case was less about the technicalities of NMW and more about employment status and whether a worker should be entitled to NMW (amongst other things). This case shines a light on the importance of employment status for legal purposes and that employment status for tax and employment law remain distinct from each other.

However, in our article 'Are there Uber consequences for the gig economy' we mention that part of the Supreme Court ruling is that the drivers are working from the moment they logged onto the Uber App.  Following the ruling, Uber confirmed it will pay at least NMW when the drivers are on journeys. 

One of the appellants in the employment status case is already reported to be challenging that NMW should also be paid for ‘waiting time’ between journeys.  If the case is taken to court it will be interesting to see which of the above cases the courts decides takes precedence.  There seems to be more to come on this matter!

Next steps

HMRC are currently undertaking many NMW reviews and key focus areas remain, including:

• Salary sacrifice;
• Deductions from pay for goods and services
• Payments for uniform/equipment
• Administration charges for AEOs
• Time in lieu policies
• Monthly paid, worker categorization, and pay reference periods
• Accommodation

Managing NMW compliance can be critical for the business for many reasons and can help ensure a compliant and attractive reward strategy is established.

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