Is NMW due for sleep-in shifts?

A long saga

After a protracted legal process, the Supreme Court handed down its decision on how “sleep-in” shifts should be treated for national minimum wage (NMW) purposes in March 2021. A sleep-in shift is where someone in a care or security role is at work but is permitted to sleep during their shift if they respond to an emergency when it occurs.

Case facts

The appeal was a conjoined case, where both appellants were carers who argued that they were owed significant arrears of pay because they had been paid a fixed allowance for shifts where they were asleep for the whole time, receiving the NMW only for hours when they were attending to an emergency during the night. The employers conversely argued that this was not working time and the financial implications of paying the NMW for all the hours that the employee was at the employer’s premises would bankrupt the social care sector. For example, S’s arrears claim alone amounted to £240,000. The payment of a fixed allowance and not the NMW for sleep-ins had been a recommendation of the Low Pay Commission back in 1998 when the NMW regulations were being consulted on.

NI risk. The care sector was not solely concerned about the potential wage arrears, but also the 13.8% employers’ NI and potentially pension contributions that would be due on any arrears payments, so the total bill was estimated to be at least £400 million.

The ruling

The Supreme Court dismissed both workers’ appeals, and overturned other key cases, in deciding that the meaning of the sleep-in provisions in the National Minimum Wage Regulations 1999/2015 were such that if the worker is permitted to sleep during the shift and is only required to respond to emergencies they are not working. The hours in question are not included in the NMW calculation for either time work under the 2015 regulations or salaried work under the 1999 regulations  unless the worker is awake and working. New guidance has been issued following the ruling.

Guidance isn’t the law

One of the workers provided a document to the court which had been produced by the Department for Business, Energy & Industrial Strategy (BEIS) in 2015 that indicated that individuals were working during the whole of an overnight shift even when asleep. The judge dismissed this, stating that it was a non-legislative opinion of the BEIS published ahead of the 2015 regulations.

This is a reminder that guidance, even from a government department, is just an opinion, it is not the law. It is for the courts to interpret the intention of the government in laying legislation, and this is not the first time guidance has been found to be at odds with the lawwhen?.

Similar situations. The judge also said that there are other instances when an employee is doing something for the benefit of their employer but is not entitled to be paid, such as travelling to the workplace. Regulation 17 of the National Minimum Wage Regulations 2015 proved crucial as it provides the flexibility for an employer to consider different parts of the time spent at the workplace as worked hours and not worked hours, depending upon what the employee is expected to do once they arrive at the workplace, i.e. are they just available for work or working?