Supreme Court rules sleep-in shifts are not time work for National Minimum Wage purposes

• The Supreme Court has released its ruling that ‘sleep in shifts’ are not to be considered ‘time work’ for the purposes of the National Minimum Wage (‘NMW’) Regulations.
• This means that carers who have to stay overnight at their workplace are not entitled to the NMW for the time while they are asleep.
• Earlier judgements which held that sleep-in shifts did attract the NMW were overturned by the Court of Appeal who held "the only time that counts for NMW purposes is time when the worker is required to be awake for the purposes of working".
• The judgement by the Supreme Court confirms that the decision in British Nursing Association v HMRC should be dismissed and the suggestion that a worker could be 'working' even if they are not required to be awake was incorrect.

In its decision the Supreme Court set out the following;

• The phrase "awake for the purposes of working", which is used in the definition of 'time work', is not to be divided up into 'awake' and 'for the purposes of working'. The phrase is whole and therefore the number of hours worked excludes the hours when the worker is permitted to sleep. Unless they are ‘awake for the purpose of working’, any time spent asleep cannot consequently be 'time work'.
• At the point where the worker is actually called upon to undertake duties when on a sleep-in shift, that time will be considered as 'time work' and is subject to the NMW.
• To determine the meaning of the regulations, the Supreme Court concluded that the Low Pay Commission (LPC) did not intend to set out in its reports that those who were permitted to sleep could be deemed to be working when they first reported to government before the release of the 1999 regulations. The LPC recommended an allowance be paid and the NMW if they were awake for the purposes of working.
• Under the Minimum Wage provisions, a decision as to whether a person is 'working', does not need to take into account that a worker is at their employer's direction or required to follow instructions.

The full judgement can be found here

Aspire comment:

Whilst the ruling will be disappointing for those who work in the care sector, the outcome will be welcomed by employers, many of whom feared that the NMW liabilities would bankrupt the sector.

HMRC have updated their guidance today following the publication of the ruling. It states that they will provide updated guidance shortly in relation to the calculation of NMW when staff are permitted to sleep between duties.

There are many factors to consider when paying the NMW. It is vital that you take action to ensure that you are correctly paying the NMW or NLW that is due – do not wait for a HMRC enquiry. If you are concerned about whether you are meeting your NMW/NLW obligations as an employer, to ensure you are compliant with your obligations and avoid the financial and reputational risk of being on the next name and shame list, give Aspire a call on 0121 445 6178.