Wage Costs Could Spiral If Court Of Appeal’s Decision Is Overturned

The Supreme Court will hand down its long-awaited ruling this week (19 March) in a case which examines the issue of what rate of pay applies to 'sleep in' shifts.

The case is being monitored carefully by some businesses, especially care homes, which fear that as a result of the ruling, they could face huge backdated claims for underpayment and fines for breaching National Minimum Wage (NWW) rules.

In Mencap v Tomlinson-Blake, the Court of Appeal said that under the NMW regulations, workers are either available for work or actually working.

Those who provide sleep in cover are only available for work and, therefore, only have to be paid at appropriate NMW rates if they have to get up during the night to help a patient or do some other work. They don't have to be paid at NMW rates when they are in bed or resting.  

The Supreme Court heard the case over a year ago and will hand down its ruling on Friday.

Siobhan Mulrey, an employment law specialist at law firm Irwin Mitchell said: “This is an important case and organisations on very tight budgets, such as care homes, welcomed the clarity provided by the Court of Appeal. If the Supreme Court reverses this decision, many will be exposed to claims that they have underpaid staff.

“Individuals who are not paid the correct NMW for the hours worked can recover up to six years underpayments. More significantly, HMRC can impose huge fines on employers who have breached the NMW of up to £20,000 for each underpaid worker.”