Supreme Court to hear appeal evidence on sleep-in shifts this week

In a landmark, and highly anticipated case, against Mencap, the Supreme Court will this week (12 & 13 February) hear arguments over whether time spent during sleep-in shifts can count towards working time for the purposes of the National Minimum Wage; the second case of Shannon v. Rampersad doesn’t appear to have made it to this level following a failure to crowdfund the appeal. The Court of Appeal previously ruled that only time spent awake and working had to be counted; however, the Supreme Court will make a final determination on the issue. A more detailed account of the two cases provides an explanation of the complexity of the issues involved.
In Royal Mencap Society v Tomlinson Blake the employee provided care for vulnerable adults in their home. This involved working in the afternoon and evening and then the following morning. Between these two regular shifts, she was also required to work a ‘sleep-in shift’ between 10pm and 7 am. She had no specific duties during that shift, but she was required to remain in the house, be alert to any requests from help from the service users and to respond to any incident that might arise. In the course of 16 months, the Tribunal found, she was required to intervene on six occasions. She was provided with her own bedroom with a shared bathroom and was generally expected to get a good night’s sleep on the occasions when she wasn’t needed to respond to an incident. She was paid £29 per nine-hour sleep-in shift. The core question is whether each hour in that shift should count towards her minimum wage entitlement.
The impact of the ruling could be significant due to an estimated sector-wide liability of £400m if all time spent during sleep-ins is found to be working time for National Minimum Wage purposes. Given the significant funding crisis already facing the sector, and the current Government’s apparent lack of an imminent solution, the financial viability of the sector could be brought into considerable doubt. Mencap alone has stated that it has a £20m liability and is at risk of insolvency if required to pay it.
James Sage, Head of Royds Withy King Social Care team, specialists in advising care providers, said:
“For many years, care providers have paid staff carrying out sleep in shifts on the basis that the National Minimum Wage was not payable for the time spent asleep. This was consistent with HMRC guidance at the time. It also reflected the sleep-in rates paid by many local authorities, which were often as low as £30 and barely covered providers’ costs of providing the service.
“However, from 2012, employment tribunals challenged this position and found that sleep-in shifts were working time and subject to the National Minimum Wage, only for the Court of Appeal in the Mencap case to decide differently in 2018.
“The confusion and uncertainty has caused considerable anxiety for care providers, who we all rely on to provide essential services to the most vulnerable in society, through no fault of their own.”
Despite the Court of Appeal ruling that only time spent awake and working is subject to the National Minimum Wage, HMRC has insisted that providers remain part of its Social Care Compliance Scheme, which was set up to encourage providers to voluntarily declare their non-compliance to HMRC.
James goes on to say:
“If the Supreme Court reverses the Court of Appeal decision, HMRC will be armed with all of the necessary financial information to enforce repayment from providers. However, many providers will simply not have the resources to pay so the Government needs to plan for alternative solutions to ensure the financial viability of the sector, which cannot be allowed to fail.
“We expect the Supreme Court to agree with the Court of Appeal decision that it was not Parliament’s intention for time spent asleep to be subject to the National Minimum Wage. If it doesn’t there will be a lot of work and sleep-less nights ahead for providers before they can finally put the issue of sleep-ins to bed once and for all.”
However, the Supreme Court is not bound by any of the earlier case law and what there is, is complex and contradictory. Following the discussion, the Supreme Court is entitled to ignore all previous precedents. The central question, the five Justices will have to decide, is whether they think it makes sense to regard someone who is expected to sleep through the night as working rather than simply making themselves available for work, but as Minimum Wage Regulations do not provide for an overarching definition of what constitutes work, what the final decision will be is anyone’s guess.
The Supreme Court is likely to make its decision in late spring/ early summer 2020.