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Mencap Wins Appeal - National Minimum Wage and Sleep-ins

The decision

The Court of Appeal has today announced that Mencap have successfully challenged the previous Employment Appeal Tribunal decision on the critical issue of payment during sleep-ins.

Care workers who sleep overnight as part of their duties will not be entitled to the National Minimum Wage (NWM) unless they are awake and working.

Mencap challenged the previous EAT decision arguing that the sectors estimated £400m back pay liability was unaffordable and would fundamentally damage the sector beyond repair.

The Court of Appeal’s decision has confirmed that care providers do not owe this liability as there is no back pay due.

Lord Justice Underhill, sitting with two other senior judges, carefully analysed the relevant legislation (the National Minimum Wage Act and Regulations as well as the Reports of the Low Pay Commission) and then analysed the previous case law authorities on the issue.

In terms of the legislation, he concluded that:

 “on a straightforward reading of the Regulations…workers sleeping in under arrangements of the kind identified above will only be entitled to have their sleep-in hours counted for National Minimum Wage purposes where they are, and are required to be, awake for the purposes of performing some specific activity” (para 47).

After then evaluating the case law authorities he held:

I believe that sleepers-in… are to be characterised for the purpose of the Regulations as available for work … rather than actually working… and so fall within the terms of the sleep-in exception in Regulation 15 (1A/32 (2)); and we are not bound by authority to come to any different conclusion. The result is that the only time that counts for NMW purposes is time when the worker is required to be awake for the purposes of working.” (para 86).

What next?

Many care providers have been paying enhanced NMW rates during sleep-ins to prevent increasing liability should the appeal not have been upheld.

Mencap has released a statement (https://www.mencap.org.uk/advice-and-support/stopsleepincrisis) confirming that they support care workers and intend to continue to pay sleep-ins at a higher rate.

We now call on the Government to fulfil its responsibilities by legislating so that all carers are entitled to this, and their employers are funded accordingly.”

Potential issues now arising:

Many Care Providers may have changed their working arrangements and employment contracts to pay enhanced or NMW rates during sleep-ins and are unsure how to proceed in light of this decision.

Alternatively, they may have joined the Social Care Compliance Scheme launched by HMRC to disclose and pay liability and do not know whether they must continue.

We await further announcements following this landmark decision and will report further on these matters as developments progress.

If you would like to discuss this decision further, don’t hesitate to contact our Employment Team

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

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