One of our partners Ashfords LLP was acting on behalf of Clifton House Residential home and successfully defended the claim that Mr Shannon entitled to have the entirety of the hours between 10pm and 7am counted as salaried hours work for National Minimum Wage purposes for 365 days a year. The arrears that he claimed on that basis were calculated to amount to almost £240,000.
The Court of Appeal dismissed Mr Shannon's appeal and upheld Mencap's appeal thus finding that in both of these cases, the time that counts for National Minimum Wage purposes is limited to the time when the worker is required to be awake for the purposes of working.
In 2015, the Government issued updated guidance to employers to reflect the pattern that had emerged from previous case law on this matter. The rulings previously suggested that time asleep could, in some circumstances, amount to “working time.” . The Government recognised these legal developments placed a new strain on employers, particularly those in the social care and housing sector. Most of these organisations had historically paid sleep-ins by way of an allowance less than the NMW (in reliance on earlier Government guidance).
As such, the Social Care Compliance Scheme was set up to support these employers in understanding their liabilities. HMRC indicated that it would waive fines in respect of non-compliance found to have occurred prior to July 2017 and suspended HMRC enforcement activity concerning payment of sleep-in shifts until October 2017. It is understood that the general practice of residential care providers is now to pay the NMW for all hours of the shift, but many have been unable to meet their back pay liabilities, and have been lobbying the government for assistance.
In light of the Court of Appeal judgment, all this may change again! We will keep you updated on any further developments in this case and how it may affect future practices.