17 Jul 2018
Employers in the care sector recently learned that workers are not entitled to the National Minimum Wage during a ‘sleep in’ shift unless they are actually working.
The ruling marks a dramatic turnaround as the judge declared that all previous cases addressing the issue had come to the wrong decision. Now, employers will not need to make ‘extra payments’ to their employees who are ‘available for work’ while sleeping rather than actually working through a night shift.
Previous cases put employers in an extremely difficult financial situation, they ruled that NMW was payable for every hour of a sleep in shift, regardless of whether they were working or not.
This meant employer’s faced the reality of increasing employees’ pay to ensure NMW was correctly paid, a particularly pertinent issue considering the number of employers recently named and shamed. It also threatened employers with a significant back pay that could have stretched back up to 6 years.
What does the new ruling mean?
This potential for back pay liability has now been quashed. Andy Willis, head of legal & advisory at Croner, states: “The decision the Court came to was based on the National Minimum Wage Regulation 1999, that states there are two different types of time work: one where the worker is actively working, and one where the worker is merely available for work. Where the worker is available for work, the only hours that count are those when the worker is awake for the purposes of working, even if the worker, by arrangement, sleeps at work and has been provided with suitable facilities for sleeping.”
If a worker sleeps at or near work for the purpose of performing tasks if called upon, they are now only entitled to receive NMW for when they are actually called to work. Hours spent asleep will not require NMW payments, according to the Court.
There is still the possibility that the employee involved in this case will hit back against the decision, which may mean another reversal in the Court’s decision. This decision does not change workers right to the NMW if they are actually working a night shift.
For example, a recent case with a night watchman found that by the nature of being at the workplace, the worker was in fact working. The case also opens up questions surrounding the National Minimum Wage, leaving the Government in a somewhat awkward position. The original guidance has already been adjusted once to fit case law judgements, but it is very possible that this position could be changed again to reflect the latest Court of Appeal’s decision.
If you have a query regarding the National Minimum Wage, or are experiencing a HR issue, speak to an expert 01455 858 132.
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