United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR PHILIP MARSHALL (of Counsel) Instructed By: Mr R Williams Messrs Leo Abse & Cohen Solicitors 40 Churchill Way Cardiff CF1 4SS
For the Respondent	MR PETER OLDHAM (of Counsel) Instructed By: Mr O Warnock Messrs Eversheds Solicitors Holland Court The Close Norwich NR1 4DX


 


MR JUSTICE HOLLAND:

Introduction

1. This is an appeal from a decision of a Chairman, Mr. J. Bird, sitting alone at Cardiff at an Employment Tribunal, which decision together with Extended Reasons was sent to the parties on the 30^th April 2001. The issue is entitlement to the national minimum wage.

The Facts

2. The Applicant (and present Appellant) is Miss Julie Walton. From April 1998 to November 2000 she had been employed by the Respondents, Independent Living Organisation Ltd, as a carer. A written statement of particulars of employment is dated 20^th April 1998. This includes the following:

"Clause 4: Your rate of pay will vary according to the assignment you are undertaking. This may be at an hourly, daily or weekly rate. Your manager will advise you of your rate of pay prior to each assignment.

5: Your hours of work will vary according to the assignment you are allocated … there is no obligation on you to provide a minimum number of hours in any day or week. However, once engaged on an assignment, you are required to complete it and devote your full attention and abilities to the needs of the client to ensure the satisfactory provision of such services."

3. In the event the Applicant was assigned to the care of Miss Elaine Jones. She is an epileptic with a poorly controlled condition. In the result she needed assistance at hand as and when she 'fitted' and her activities were limited to those that could be carried out in a safe environment. During the day she was able to attend to some of her own domestic and hygienic needs but she needed a carer for washing, ironing, shopping, preparation of meals and supervision of medication. At night she had no needs save for assistance as and when there was a nocturnal fit – we infer that such did not frequently occur. To provide the appropriate care the Respondents required the Applicant to 'live in' for three days at a time, with the next ensuing three days off (her place being taken by another carer). During those three days the Applicant was continually in residence with Miss Jones, day and night. The remuneration was agreed at £31.40 per day and her accommodation and meals were free.
4. It is common ground that during each 72 hour stint the Applicant's care alternated between the active and the passive. In August 1999 an assessment was made of the Applicant's average working day and she and her manager agreed that within the 24 hours, some 6 hours 50 minutes would be spent by way of average in active caring; during the balance of the day caring amounted to being available to react to untoward situations and of course, to keeping Miss Jones company. Those further hours included rarely disturbed sleeping hours and periods during which the Applicant could relax, watch television or otherwise look after herself, albeit remaining on the premises.

National Minimum Wage Act 1998

5. Relevant to this matter are the following:

"Section 1(1). A person who qualifies for the national minimum wage shall be remunerated by his employer in respect of his work in any pay reference period at a rate which is not less than the national minimum wage.

2(1). The Secretary of State may by regulations make provision for determining what is the hourly rate at which a person is to be regarded for the purposes of this Act as remunerated by his employer in respect of his work in any pay reference period.

(2) The regulations may make provision for determining the hourly rate in cases where:-

(a) the remuneration, to the extent that it is at a periodic rate, is at a single rate;

(b) the remuneration is, in whole or in part, at different rates applicable at

different times or in different circumstances;

(c) the remuneration is, in whole or in part, otherwise than at a periodic rate or rates;

(d) the remuneration consists, in whole or in part, of benefits in kind.

(3) The regulations may make provision with respect to-

(a) circumstances in which, times at which, or the time for which, a person is to be treated as, or as not, working, and the extent to which a person is to be so treated;

(b) the treatment of periods of paid or unpaid absence from, or lack of, work and of remuneration in respect of such periods.

17. Non-compliance: worker entitled to additional remuneration

(1) If a worker who qualifies for the national minimum wage is remunerated for any pay reference period by his employer at a rate which is less than the national minimum wage, the worker shall be taken to be entitled under his contract to be paid, as additional remuneration in respect of that period, the amount described in subsection (2) below.

(2) That amount is the difference between-

(a) the relevant remuneration received by the worker for the pay reference period; and

(b) the relevant remuneration which the worker would have received for that period had he been remunerated by the employer at a rate equal to the national minimum wage.

(3) In subsection (2) above, "relevant remuneration" means remuneration which falls to be brought into account for the purposes of regulations under section 2 above."

The Complaint

6. This appears from the ET1 of the 20^th November 2000:

"I have been employed by Independent Living Organisation Limited, providing one to one care for designated handicapped clients of my employee since 13^th April 1998. My hours of work are variable however I provide care and supervision during all of the clients waking hours usually 14 hours per day. My pay statements do not specify the hours I have worked or are being paid for within each week.

Using the pay week commencing 4^th November 2000 as an example, I worked 42 hours (14 hours per day) and was paid £110.00 gross (£2.62 per hour).

My employer has failed to pay my entitlement under the National Minimum Wage Regulations 1999 and meet their obligations under the National Minimum Wage Act 1998, and has therefore made an unlawful deduction from my wages.

I make my application under the provisions of the National Minimum Wage Act 1998, the National Minimum Wage Regulations 1999 and S.23 Employment Rights Act 1996."

We interpose: although nothing turns upon it the invocation of Section 23 Employment Rights Act 1996 is arguable. It maybe preferable to regard the claim as one in contract, with jurisdiction accorded by article 6 Employment Tribunals Extension of Jurisdiction Order 1994.

The Tribunal

7. In the event the Tribunal concluded upon the evidence that the Applicant was paid more than the minimum wage and dismissed the complaint. The Applicant appeals, contending that the Chairman misdirected himself as to law. Again we interpose: as will be apparent the decision and the appeal largely turn upon the Regulations made pursuant to Section 21 of the 1998 Act that is, the National Minimum Wage Regulations 1999. It is conventional to set out the relevant Regulations and therefore to review the arguments by reference to such. As is common ground to all concerned, these Regulations are not easy to invoke and follow and accordingly it is convenient to cite the relevant Regulations as and when narrated in the flow of the respective arguments. We hope thereby to contribute to the clarity of the issues.

The Case for the Applicant

8. The case advanced by Mr. Marshall proceeded by the following stages:

a. As to fact, he pointed to the provision for his client's pay, viz., £31.40 per day. Given that she was in the course of her employment and serving the Respondents throughout that period (even when sleeping she had to be on the client's premises and available to give assistance), then the 'day' connotes 24 hours and the resultant hourly pay rate becomes £31.40 ÷ 24 = £1.31 – a figure well below the relevant national minimum single hourly wage rate of £3.70, see Regulation 11 of the 1999 Regulations.

b. He submitted that this approach could be sustained by proper construction of the following Regulations. Thus

(1) He invoked:

Regulation 3: In these Regulations 'time work' means-

(a) work that is paid for under a worker's contract by reference to the time for which a worker works and is not salaried work …

10(i) The pay reference period is a month or, in the case of a worker who is paid wages by reference to a period shorter than a month, that period.

Pausing there: the Applicant was, he submitted, engaged in time work, that is, by way of her contract she was paid by reference to time, with the pay reference period being a day.

(2) He submitted that the 'the day' should be taken to include the full 24 hours and invoked.

Regulation 15(1) … time work includes time when a worker is available at or near a place of work for the purposes of doing time work and is required to be available for such work …

(3) He acknowledged:

Regulation 15(1A) In relation to a worker who by arrangement sleeps at or near a place of work and is provided with suitable facilities for sleeping, time during the hours he is permitted to use those facilities for the purpose of sleeping shall only be treated as being time work when the worker is awake for the purpose of working.

He queried the impact of this provision given that his client was, as it were, on standby whilst sleeping but pointed out that it could only serve to reduce the hours of time work during each day on duty to, say, 14 (as suggested in the ET1) and £31.40 ÷ 14 = £2.24 per hour, still significantly below £3.70.

(4) He then invoked as sustaining this method of calculation, Regulation 14, the terms of which need not be cited.

c. He submitted that the Chairman misdirected himself by not following this forensic line so as to conclude that his client was being paid £1.31 an hour, alternatively £2.24 an hour and in any event much less than the national minimum wage.

The Case for the Respondents

9. The response from Mr. Oldham was:

a. The Applicant was not engaged in time work. True, her pay was specified as a rate per day but that did not reflect time as a material component. £31.40 is not meaningfully divided by 24, nor by 14, nor by 6 hours 50 minutes. Whatever the genesis of the sum (as to which there was no evidence), it had to relate to factors other than or in addition to time.

b. How then was this work to be categorised? The answer lay in:

Regulation 6: In these Regulations 'unmeasured work' means only work that is not time work, salaried hours work or output work including in particular, work in respect of which there are no specified hours and the worker is required to when needed or when work is available.

He interposes: within the ambit of each stint (which in any event is 72 hours not 24), this is particularly apt at defining the Applicant's commitment.

c. If then we are concerned with unmeasured work, then the following become relevant.

"Regulation 27

Unless the condition in regulation 28(1) is satisfied, the unmeasured work worked by a worker in a pay reference period shall be the total of the number of hours spent by him during the pay reference period in carrying out the contractual duties required of him under his contract to do such work.

28

(1) The condition referred to in regulation 27 is that there is an agreement in writing between the worker and his employer, made at any time before the beginning of the pay reference period, determining the average daily number of hours the worker is likely to spend in carrying out the duties required of him under his contract to do unmeasured work on days when he is available to carry out those duties for the full amount of time contemplated by the contract.

(2) The condition in paragraph (1) is not satisfied if the employer cannot show that the average daily number of hours determined is a realistic average.

(3) Unless otherwise agreed the agreement referred to in paragraph (1) has effect solely for the purpose of determining the amount of unmeasured work the worker is to be treated as having worked for the purpose of these Regulations and does not vary the worker's contract."

Submits Mr. Oldham, on the evidence there was a daily average agreement viz that which arrived at 6 hours and 50 minutes in August 1999; further or alternatively it should be inferred that a fresh calculation done for the purpose of Regulation 27 would yield a like period.

d. With this material, Regulation 14 would produce £31.40 ÷ 6.83 hours, = £4.60 per hour – a wage rate markedly in excess of that prescribed as minimum.

The Law

10. Before us two authorities were cited: Wright v. Scottbridge Construction Ltd (2001) IRLR 589 and British Nursing Association v. Inland Revenue (2001) IRLR 659. Both are decisions of this Tribunal: and both relate to the impact of Regulation 15 in a 'time work' situation. We have read such with interest but to no great effect given that in neither was the current issue, 'unmeasured work' or 'time work', raised by the relevant parties (perhaps surprisingly in Wright's case) so that nothing in either judgment is truly germane.

Judgment

11. We have no hesitation in dismissing the appeal so as to uphold the Tribunal's decision. Thus, we accept the submission of Mr. Oldham that the Applicant was not engaged on time work. True, her pay was expressed to be by the day but, that indication aside, everything points to 'unmeasured work' being the appropriate categorisation. £31.40 is plainly not a time computed figure, whether measured by reference to 24 hours, to 14 hours or some other and lesser number of hours. The uncertainty as to what number of hours it could refer to in itself militates against time work. On the other side of the coin, the scope of unmeasured work as to be ascertained from Regulations 3, 27 and 28 aptly matches the incidence of duties undertaken by the Applicant in her 72 hour stints and the Respondents can point to the existence of a Regulation 28 'daily average' agreement (as was found as a fact by the Chairman) that serves to provide a measure of otherwise unmeasured work for the purpose of the Regulations.

In Conclusion

12. We should add that whilst we have noted the potential impact of a finding in favour of the Applicant, we have in no way allowed that to influence us. As was pointed out by the Chairman, a finding that in law the Applicant was engaged in time work, whether for 24 hours or 14 hours per day would mean a statutory non-negotiable entitlement to at least £88.80 or £51.80 per day and on the material put before the Tribunal as to funding for this type of community care the probable ending of this type of employment as being priced out of the market. At the outset of the hearing before us we forewarned Mr. Marshall that these were the apparent longer term implications of his case and, noting that he was union supported, asked whether he could throw light on the position. He said simply (and that is no criticism) that he was instructed to press the appeal whatever the consequences. Happily from the point of view of like clients and their carers, the law has led us to dismiss the appeal and we note with satisfaction that the compliance officer of the Inland Revenue, having independently taken the view that this work was to be categorised as 'unmeasured', is not minded to adopt the 'time work' contention.