United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	Written submissions
For the Respondent	Written submissions


 


SUMMARY

WORKING TIME REGULATIONS

NATIONAL MINIMUM WAGE

A care worker in a residential home who was provided with accommodation so that she could discharge her duty to be on call for the residents 11 hours a night, 7 nights a week, was entitled to treat those hours as working time for the purposes of the Working Time Regulations, and for periods when she was not actually sleeping to treat them as attracting the national minimum wage.

Employment Tribunal judgment reversed and remitted to the same Employment Tribunal for remedy.


 


HIS HONOUR JUDGE McMULLEN QC

1. This case concerns claims under the National Minimum Wage Regulations and the Working Time Regulations 1999. We will refer to the parties as the Claimant and the Respondent.

Introduction

2. For reasons explained to the parties the hearing originally fixed could not take place and each party consented to the case being decided on written submissions by the three member division.
3. It is an appeal by the Claimant in those proceedings against a judgment of an Employment Tribunal chaired by Employment Judge Lloyd at Carmarthen, registered with reasons on 16 November 2008. The Claimant was represented by an officer of the CAB and the Respondent by a legal consultant. The Claimant claimed constructive unfair dismissal and breach of the two sets of regulations. The Respondent denied the claims on their merits. The Tribunal decided in favour of the Claimant on unfair dismissal. This is not appealed. It dismissed her claims under the regulations and the appeal concerns both of those. Directions sending this appeal to a full hearing were given in chambers by Elias P. He also directed the Employment Tribunal to give Further Reasons. The Employment Judge did so and we are grateful to him.

The issues

4. The Claimant claims she was constructively unfairly dismissed when the flat which she was entitled to occupy on the Respondent's premises was the subject of a notice to quit. It deprived her of the opportunity to discharge her duties which was to be on call between 9 pm and 8 am seven nights a week. That was found to be a fundamental breach of contract which the Claimant accepted. It constituted a dismissal which was held to be unfair. That finding is not disputed.
5. She also claimed that she was paid less than the national minimum wage, as to which she was entitled to be regarded as a salaried hours worker.
6. She further claimed that the Respondent was in breach of the Working Time Regulations in that she was not paid for rest periods having worked at least 6 hours, and that she was not provided with a rest period of at least 24 hours in any 7-day period.

The Regulations

7. The National Minimum Wage Regulations 1999 (NMWR) distinguish between workers who are engaged on time work and salaried hours work. The Claimant submitted she was in the latter category and no submissions were received from the Respondent against this. Regulation 4 defines the following:

"4 The meaning of salaried hours Working Time Regulations

(1) In these Regulations "salaried hours work" means work –

(a) that is done under a contract to do salaried hours work; and

(b) that falls within paragraph (6) below.

(2) A contract to do salaried hours work is a contract under which a worker –

(a) is entitled to be paid for an ascertainable basic number of hours in a year (referred to in this regulation as "the basic hours"); and

(b) is entitled in respect of hours that consist of or include the basic hours, to be paid an annual salary –

(i) by equal weekly or monthly instalments of wages, or

(ii) by monthly instalments of wages that vary but have the result that the worker is entitled to be paid an equal amount in each quarter,

regardless of the number of hours in respect of which the worker is entitled to the annual salary that are actually worked by him (if any) in any particular week or month; and

(c) has, in respect of those hours, no entitlement to any payment other than his annual salary or no such entitlement other than an entitlement to a performance bonus.

(3) A contract that satisfies the conditions in paragraph (2) does so –

(a) whether or not all the basic hours are working hours;

(b) whether or not the worker can be required under this contract to work, or does in fact work, any hours in addition to the total of hours in respect of which he is entitled to his annual salary, and regardless of any payments made in respect of those additional hours.

(4) Circumstances having the result that in practice a worker may not be or is not paid by equal instalments of wages, or by an equal amount in each quarter, for hours in respect of which he is entitled under his contract only to his annual salary do not prevent the contract from being a contract for salaried hours work, for example –

(a) that a worker may be awarded a performance bonus,

(b) that the amount of a worker's annual salary may be varied.

(c) that by virtue of regulation 22 or 23 the worker is entitled to the national minimum wage in respect of hours in addition to his basic hours when, under his contract, there is no entitlement to any payment in addition to his annual salary for those additional hours (or to no payment in addition other than a performance bonus), and

(d) that the worker's employment may start or terminate during a week or month with the result that the worker is paid a proportionate amount of his annual salary for the week or month in question.

(5) The fact that, by reason of an absence from work for hours in respect of which his annual salary is normally payable, a worker is entitled under his contract, in respect of those hours, to be paid less than he would be but for the absence or to no payment does not prevent the worker's contract from being a contract for salaried hours work.

(6) The work done under a contract to do salaried hours work that falls within this paragraph, and is therefore salaried hours work, is work in respect of which the worker is entitled to no payment in addition to his annual salary, or to no payment in addition to his annual salary other than a performance bonus.

(7) Reference in regulation 22 to work or hours of work in respect of which a worker is entitled to no payment other than his annual salary refer also to work or hours of work in respect of which the only payment to which the worker is entitled other than his annual salary is payment of a performance bonus."

10. Regulation 16 makes further provision:

"16. Provisions in relation to salaried hours Working Time Regulations

(1) Subject to paragraph (1A), time when a worker is available at or near a place of work for the purpose of doing salaried hours work and is required to be available for such work shall be treated as being working hours for the purpose of and to the extent mentioned -of regulation 22(3)(d) and (4)(b) except where –

(a) the worker's home is at or near the place or work; and

(b) the time is time the worker is entitled to spend at home.

(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 salaried hours work when the worker is awake for the purpose of working.

(2) Time when a worker is travelling for the purpose of duties carried out by him in the course of salaried hours work shall be treated as being working hours for the purpose of and to the extent mentioned inn regulation 22(3)(d) and (4_(b) except where –

(a) the travelling is incidental to the duties carried out in the course of salaried hours work, the salaried hours work is not assignment work and the time is time when the worker would not otherwise be working; or

(b) the travelling is between the worker's home, or an address where he is temporarily residing other than for the purposes of performing work, and his place of work of a place where an assignment is carried out.

(3) For the purposes of paragraph (2)(a) –

(a) travelling is incidental to the duties carried out by a worker unless duties involved in his work are necessarily carried out in the course of the travelling, as in the case of a worker driving a bus, serving in a bar on a train or whose main duty is to transport items from one place to another, and

(b) salaried hours work is assignment work if it consists of assignments of work to be carried out at different places between which the worker is obliged to travel that are not places occupied by the worker's employer.

(4) Where a worker's hours of work vary either as to their length or in respect of the time at which they are performed and, as a result, it is uncertain in relation to particular time when the worker is travelling whether he would otherwise be working, that time shall be treated, for the purposes of paragraph (2)(a), as time when he would otherwise be working –

(5) Time when a worker is –

(a) attending a place other than his normal place of work, when he would otherwise be working, for the purpose of receiving training wholly or mainly in connection with salaried hours work that has been approved by his employer,

(b) travelling, when he would otherwise be working, between a place of work and a place where he is receiving such training, or

(c) receiving such training at his normal place of work,

shall be treated as working hours for the purpose of and to the extent mentioned in regulation 22(3)(d) and (4)(b)."

11. The Working Time Regulations 1999 provides the definitions in Regulation 2(1):

"2(1) In these Regulations -

… "rest period", in relation to a worker, means a period which is not working time, other than a rest break or leave to which the worker is entitled under these Regulations;

"working time", in relation to a worker, means –

(a) any period during which he is working, at his employer's disposal and carrying out his activity or duties,

(b) any period during which he is receiving relevant training, and

(c) any additional period which is to be treated as working time for the purpose of these Regulations under a relevant agreement;

and "work" shall be construed accordingly;"

12. Two additional provisions give entitlement to workers for time off. These are Regulations 11(1) and 12(1):

"11(1) Subject to paragraph (2), [a worker] is entitled to an uninterrupted rest period of not less than 24 hours in each seven-day period during which he works for his employer.

11(2) If his employer so determines, [a worker] shall be entitled to either –

(a) two uninterrupted rest periods each of not less than 24 hours in each 14-day period during which he works for his employer,; or

(b) one uninterrupted rest period of not less than 48 hours in each such 14-day period, in place of the entitlement provided for in paragraph (1).

12(1) Where an adult worker's daily working time is more than six hours, he is entitled to a rest break.

12(3) Subject to the provisions of any applicable collective agreement or workforce agreement, the rest break provided for in para. (1) is an uninterrupted period of not less than 20 minutes, and the worker is entitled to spend it away from his workstation if he has one.

The facts

13. The Respondent couple Mr and Mrs Jones are in partnership trading as Graylyns Residential Home. The Claimant was employed by them from 17 October 2005 to 31 March 2007. She was given a document containing the main terms and conditions of employment pursuant to statute. The Tribunal does not cite this but it describes the Claimant as a part-time care assistant at a rate of pay of 505p per hour for 8 hours a week. It is signed by the Claimant and also on behalf of the Respondent on 11 November 2005. A further document, known at the Tribunal as document 22, provides as follows:

"1. ON CALL. For clarification purposes, all calls for assistance from the main house namely THE GRAYLYNS, between the hours of 9 pm. And 8 a.m. seven days a week will be answered by yourself. If incident cannot be dealt with by yourself and/or by member of staff on duty, then in an emergency only, are the Proprietors or Manager to be contacted as to published rota.

The above will only change for approved holidays and illness. Whereby the emergency 'on call' will be covered b y the Proprietors.

2. SUBSIDISED RENT ALLOWANCE. For clarification purposes, the £150.00 calendar month rent subsidy, is for the information given at point 1. above.

It is however, at the discretion of the Proprietors/Landlords to charge all or part thereof for any other absence.

The property known as 'THE FLAT, THE GRAYLYNS' is let solely with the subsidised rent allowance for the reason made at Point 1. Namely 'ON CALL'

3. TERMINATION OF EMPLOYMENT. It is to be noted that termination of employment by either party, will result in the contractual notice of tenancy being given. Thus, the subsidised rent allowance will be lifted, and the full rent shall become payable until the property is vacated.

THE ABOVE POINTS FORM PART OF BOTH CONTRACT OF EMPLOYMENT AND TENANCY AGREEMENT.

I acknowledge receipt of these particulars and understand they are for clarification purposes, they are part of my original terms and conditions of employment."

14. As a matter of fact the Claimant was called out about twice a month. When she raised a grievance about this she was paid half an hour's pay for each call-out. The rent subsidy was a reflection of the fact that the market value of the rented flat was £600 a month and the Claimant paid £450.
15. The Claimant was given notice to quit the flat. The Tribunal found that the tenancy was inseparable from the Claimant's employment, that the notice to quit was a serious breach of her terms and conditions and constituted a dismissal under s95 of the Employment Rights Act 1996 which was unfair contrary to s98(4).
16. As to the claim under both sets of Regulations, the Tribunal found that the Claimant had not provided sufficient proof of her allegations. In further answers given by the Employment Judge to the Employment Appeal Tribunal's questions the Tribunal said this:

"The Claimant cited the Respondents' document 22 in her amendment to the ET1. However these allegations were not supported or even dealt with by the Claimant in her verbal evidence to the Tribunal at the hearing on 26^th October 2007. The conclusion of the Tribunal was that document 22 was not sufficient in itself to prove the breaches of the said regulations.

The Tribunal refers to paragraphs 19-21 of its reasons judgment promulgated in February 2008. The Tribunal made these further material findings of fact; a) the claimant was at all relevant times when "on call" based at her own home. Albeit at the same location as the Respondents' business it was separable from it. The claimant was entitled to 'quiet possession" of the same as her residence. She was "at work" only when a call out occurred. b) the Claimant was called out no more than twice per month. C) in reality the night staff coped with their duties with the minimal disruption of the Claimant out of working hours. D) the rationale for the Claimant being on call was ancillary rather than substantive.

Having regard to the Tribunal's findings at 1) & 2) above the Claimant had not proven that she did not receive 24 hours rest in each seven day period or a minimum 20 minute rest break after 6 hours of work. She was paid in respect of call outs attended; albeit somewhat belatedly. The Claimant had not shown a breach of the NMW Regulations because of extended hours without payment."

Discussion and conclusions

17. The Claimant's case could not be simpler. She was not given a continuous period of 24 hours rest for she was on call seven nights a week for 11 hours a night. She was not given a rest break of at least 20 minutes after 6 hours being on call. The Respondent's case is that the Claimant worked only when she was on call and actually called out for which she was ultimately paid. The number of call-outs was minimal.
18. In our view, the Claimant is right. This is covered by authority. In MacCartney v Oversley House Management [2006] IRLR 514 EAT Judge Richardson and members, it was held that a resident manager at a care home was entitled to regard as working time those hours which she spent at the home in her room on call. It was held that she was engaged on salaried hours work under the NMWR Reg 4. The headnote of the law report provides this:

"The EAT held:

The majority of the employment tribunal had erred in holding that the claimant resident manager was not working throughout the 24-hour period when she was on call and, therefore, had not been denied a minimum daily period of rest as provided for in reg. 10(1) of the Working Time Regulations.

Having regard to the principles laid down by the European Court of Justice in Landeshaupstadt Kiel v Jaeger and SIMAP v Conselleria de Sanidad y Consumo de la Generalidad Valenciana, the whole period when the claimant was on call constituted working time. A worker who is provided with tied accommodation at her workplace and is required to be on site to answer calls throughout a period of 24 hours, but otherwise can sleep during the night or take recreation in her home, is "working" for the whole 24 hours for the purposes of the Working Time Regulations. The extent to which the worker is likely to be called out is not decisive of the question whether she is working. Nor is it relevant that accommodation provided by the employer was intended to be, or might constitute, the worker's home. Workers who are on call at a place where they are required by their employer to remain may be said to be "working" when sleeping or resting.

In the present case, the claimant was required to remain at or within a very short distance of her home, which was located at her place of work and contained her office. She was never off duty since she was always liable to answer calls directly from residents. She had to remain at the place determined by her employer with a view to performing services if need be or when requested to intervene. Accordingly, the whole period that the claimant was on call constituted working time and the claimant was therefore entitled to daily rest periods in accordance with reg. 10(1).

The employment tribunal had erred in holding that the claimant had not been denied the rest breaks provided for in reg. 12 because there was no reason why she could not take a break of 20 minutes each day at a time what was convenient to her and restart it if it happened to be interrupted.

In accordance with the decision of the Court of Appeal in Gallagher v Alpha Catering Services Ltd, the Claimant was entitled to an uninterrupted period of at least 20 minutes and she was entitled to know at the start of the rest break that it would be such. It was not sufficient for her to take such rest as she could during her working time.

The majority of the employment tribunal had also erred in holding that the claimant was employed on "unmeasured work" and, on that basis, had been paid in excess of the national minimum wage at all material times.

The claimant was employed under a contract to do "salaried hours work" within the meaning of reg.4 of the National Minimum Wage Regulations. Her salary was expressed to be £8,750 in respect of four days per week of 24 hours on site cover. She was therefore entitled to be paid for an ascertainable basic number of hours in a year; she was entitled to be paid an annual salary regardless of the hours actually worked in any particular week; and, in respect of those hours, she had no entitlement to any payment other than annual salary. Given the finding that she was at working during the whole time that she was on call, she had been paid less than the national minimum wage."

19. The Claimant submitted that she too was engaged on salaried hours work and there has been no challenge to that submission. Applying the European Court jurisprudence cited in MacCartneys i.e. Jaeger [2003] IRLR 604 and Simap [2000] IRLR 845 the Claimant was entitled to be regarded as working when on call whether or not she was called out. As for rest breaks, it follows logically that she was entitled to such breaks having been on call for 6 hours: see the definition in Gallagher v Alpha Catering Services Ltd [2005] IRLR 102 where the Court of Appeal upheld a judgment of myself and members in the EAT. There may be practical difficulties, indeed absurdities, in the suggestion that a person who is at home sleeping but on call, is entitled after 6 hours of that to be woken up and given a rest break. But those are matters for quantification by the Employment Tribunal. For the purposes of the NMWR the Claimant was available at her place of work to do salaried hours work and was required to be available to do those hours. The absurdity suggested above is probably dealt with in relation to the NMWR by Regulation 16(1A) where an employee is to be treated as doing salaried hours work only where she is awake for the purpose of working.
20. With respect, we do not understand the distinction the Employment Tribunal in its further reason makes as to the Claimant's accommodation being separable from the workplace. Given the Tribunal's finding that accommodation in order to discharge the on call duties was provided as a term and condition of employment, it plainly was not separable in any legal sense.
21. The simple arithmetic in this case is that the Claimant actually worked 8 hours a week and was required to be on call for 77 giving her a working week of 85 hours. We have received no submission to gainsay that the Claimant was on a salary for those hours. She was thus entitled to the benefit of the Working Time Regulations which have been breached both by the number of hours required to be worked including those on call, and by the failure to provide rest periods and rest break. It also follows that the minimum wage becomes payable for all of those hours save for those under Regulation 16(1A) when the Claimant is sleeping and that will be a matter for determination by the Employment Tribunal, taking into account the £150 diminution in the rent. In these circumstances the appeal is allowed and the matter will be remitted to the same Employment Tribunal for it to determine the quantification and remedy.