'Sleep-in' workers must be awake and actually working for National Minimum Wage (NMW) purposes 

Last year, the Employment Appeal Tribunal heard several sleep-in cases on how the NMW should be calculated where workers are required to sleep-in at their place of work and be available for work if needed. The judgments handed down held that for NMW calculation purposes, working time must include when a worker is expected to be at a particular place and available to work, with the inclusion of time spent sleeping.

The rulings led to HMRC’s investigation of social care providers for underpayment of the NMW in respect of ‘sleep-in’ shifts. This posed particular difficulties to both the care and social housing sectors due to the cumulative financial liability they faced for penalties and arrears of wages. HMRC waived its financial penalties for a limited period of time to enable employers in the care sector and elsewhere to review their remuneration systems and pay any arrears of wages owed.

Having analysed the legislation and reports of the Low Pay Commission, the Court of Appeal in its judgment of Royal Mencap Society v Tomlinson-Blake (published on Friday 13 July 2018) has reversed the decisions on previous cases by ruling that only the hours during which a worker is required to be awake for the purpose of working count when calculating the number of hours worked for NMW purposes. It, of course, remains the case that workers and their employers can, if they choose, agree an allowance for time spent sleeping at the premises.

This is a win that can save the UK care and social housing sector billions both in backdated and future pay. However, we expect Unison will appeal to the Supreme Court on behalf of the workers so the situation may yet change again. Furthermore, this case is arguably fact-specific so slightly varied scenarios may lead to different findings.

We will keep you updated in respect of any future developments in this area.