United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR M WEST (Representative) Instructed by: Peninsula Business Services Ltd Litigation Department Riverside New Bailey Street MANCHESTER M3 5PB
For the Respondent	MR E ROSSITER The Respondent In Person

SUMMARY

NATIONAL MINIMUM WAGE

The Employment Tribunal held that an employee who worked as a night watchman and could sleep for much of his shift on facilities provided for that purpose was entitled to the national minimum wage for each hour of the shift. In so doing they followed the authorities of British Nursing Association v Inland Revenue [2002] IRLR 480 (CA), and Scottbridge Construction Ltd v Wright [2003] IRLR 21 (Inner House of the Court of Session). The employers contended that these cases were based on the un-amended version of regulation 15 of the National Minimum Wage Regulations 1999 and that the amended version, applicable in this case, fundamentally altered the law.

The EAT rejected this argument and dismissed the appeal. It also dismissed a cross appeal by the employee.


 


THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)

1. This appeal raises a very short point concerning the applicability of certain regulations made pursuant to the National Minimum Wage Act 1998. The claimant (as we will continue to call him, although he is the respondent before us) commenced employment with the appellant company in November 2001. The hours when he had to attend work were from 10.00 p.m. to 8.00 a.m., two nights a week. His job was to ensure the security of the work premises, a care home for people with learning difficulties. He had to monitor health and safety and to be accessible should any emergencies occur. He was required to be awake for a quarter of an hour to effect a handover of duties, and to assist with the breakfasts of the residents between 7.00 a.m. and 8.00 a.m. Otherwise he could be asleep, save when his duties required him to be awake, such as if he heard noises requiring investigation or if anything else untoward occurred. Indeed, his job title was "night sleeper".
2. The Tribunal found that the contract he entered into envisaged a wage which was described as "£20 per night (sleeping only)". This was later raised to £24. This was the basic amount paid for being present during the night; a separate payment was made for the time during which the claimant was awake and working. The Tribunal found, however, that the claimant was not made aware of his right to that additional payment until March 2006.
3. The claimant was dismissed on 19 July 2006. He brought a claim before the Tribunal both for unfair dismissal and for breach of the National Minimum Wage Act. The Tribunal found that he had been unfairly dismissed, but that is not the subject of any appeal and we say no more about it. They also found that the employers had failed to pay him the national minimum wage, and the employers appeal that conclusion. There is also a cross appeal which we shall consider at the end of this judgment.

The relevant legislation.

4. Section 1 of the 1998 Act provides that "a person who qualifies for the national minimum wage" shall be paid a rate which is not less than the stipulated minimum wage. It is common ground that the claimant qualifies.
5. Regulations made pursuant to section 2 of the Act make provision for determining the hourly rate of remuneration in any pay period. These are the National Minimum Wage Regulations 1999. The regulations define different categories of work. It is accepted that the claimant falls within the category of someone doing "time work" as defined in regulation 3. This means in this context that he is paid by reference to the time for which he works, since he is not salaried.
6. The regulations also lay down the procedure for determining whether the minimum wage is paid or not. Broadly that involves looking at the total remuneration in the relevant pay reference period and dividing by the hours worked (see regulation 14). In so far as there is a shortfall, it must be made good.
7. Regulation 15 contains express provisions with respect to time work. The original regulation has been the subject of an amendment, and it is the amended version which is in issue in this case. So far as is material, it is as follows:

"15 Provisions in relation to time work

(1) Subject to paragraph (1A), time work includes time when a worker is available at or near a place of work for the purpose of doing time work and is required to be available for such work except where –

(a) the worker's home is at or near the place of 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 should only be treated as being time work when the worker is awake for the purpose of working."

8. It is also material to set out the earlier version since the thrust of this appeal is that the amendment has fundamentally altered the law. As originally drafted the regulation was as follows:

"In addition to time when a worker is working, time work includes time when a worker is available at or near a place of work, other than his home, for the purpose of doing time work and is required to be available for such work except that, in relation to a worker who by arrangement sleeps at or near a place of work, time during the hours he is permitted to sleep shall only be treated as being time work when the worker is awake for the purpose of working."

The case below.

9. The claimant's contention below was that he should have received the national minimum wage for each hour of his shift. The employers submitted that this was not so and that they were not obliged to pay him for the time when he was able to sleep at work and did so. He was only entitled to be paid the minimum wage for the period during which he was actually required to be awake and working. This was the effect of regulation 15(1A). The claimant was sleeping at his place of work at a time when he was permitted to do so and using facilities provided for that very purpose.
10. The Tribunal referred to two cases, British Nursing Association v Inland Revenue [2002] IRLR 480, and Scottbridge Construction Ltd v Wright [2003] IRLR 21. These decisions are in our judgment central to this analysis and require careful consideration.
11. In the British Nursing case the Court of Appeal was faced with a claim by workers who worked at night from home and took telephone bookings for nursing staff. During the day employees carried out this function from the employer's premises, but at night the duty nurse did it at home. The original regulation 15 was in force at the time. The employers argued that the effect of the exception, which largely reflects what is now in regulation 15(1A), was that the night staff were not entitled to the minimum wage for all the hours they were available to be contacted but only those hours for which they were actually engaged on the telephone.
12. The Court of Appeal rejected this argument. The employment tribunal had found that the claimants were working for the whole of the period for which they were waiting to answer the telephone and not simply when they answered it. Lord Justice Buxton, with whose judgment Peter Gibson LJ and Neuberger J agreed, observed that not only was this a finding which the Tribunal was entitled to make but that it was self evidently correct as a matter of English language. Nobody would say that the employees on duty during the day were not on duty for the whole of the shift but only when they were answering the telephone. There was no reason to treat night workers any differently simply because they carried out the task from home.
13. His Lordship held that regulation 15 was a red herring and ought to have had no relevance to the case at all:

"Regulation 15 only arises in a case where a worker is not in fact working but is on call waiting to work."

14. As this analysis makes plain, the original regulation 15 is a deeming provision. It is treating as time work to be time work periods when an employee is in fact not working but only available for work.
15. The exception, which was relied upon by the employer, ensures that certain cases when the employee is available for work will not count as time work because it is taken out of the deeming provision. However, once it is determined that for the whole period of the shift the worker is actually working, he falls firmly under the scope of regulation 3 as a time worker. His status is not that of someone who is available for work but rather someone actually working. It follows that there is no scope for regulation 15 to operate. If that regulation is inapplicable then so is the exception. The claimant is relying on work actually done, not work deemed to be done by virtue of regulation 15.
16. In Scottbridge Construction the Inner House of the Court of Session essentially followed that analysis. That case concerned a night watchman who worked from 5 pm to 7 am. There were certain periods when he had to be awake, and in particular for the changeover of shifts. There were also considerable periods when he was allowed to sleep and a mattress was provided for that purpose, although he would be expected to deal with any phone calls or emergencies.
17. The Employment Tribunal held that the employee was only working for the four hours or so when he had to be awake performing tasks. The EAT (Lord Johnston presiding) upheld the appeal and held that the worker was working for the whole of the period since he was required to be on the premises for the duration of the fourteen hours.
18. The Inner House of the Court of Session agreed with the EAT and dismissed the employer's appeal. They rejected an argument advanced by the employers that the general intention of regulation 3, read with regulation 15, was that the period when the employee was asleep was not to be treated as time work. The Lord President summarised the key conclusion as follows:

"The work which was paid for under his contract by reference to the time for which he worked was, for the purposes of reg.3, his attendance as night watchman for the whole of those hours. ..[T]he fact that the respondent had little or nothing to do during certain hours when he was permitted to sleep does not take away from the fact that he was throughout in attendance as a night watchman and required at any time to answer the telephone or to deal with alarms. The employment tribunal in our view confused their estimate of the hours during which the respondent was generally active with an overall consideration of what was required of him as a night watchman at any time."

19. The Lord President also referred to the British Nursing Association case and held that, just as in that case, regulation 15 simply did not enter the picture.
20. The Employment Tribunal in this case noted that the regulation 15 applicable was the amended version. However, they did not consider that the amendment was material in the context of this case. They concluded that they should follow the decision of the Court of Session in Scottbridge with the result that the whole of the time when the claimant was on his shift was working time, even when he was asleep. Accordingly, the employers were required to pay him the national minimum wage for each of the hours of his shift.

The grounds of appeal.

21. It is submitted that the Tribunal wrongly analysed the effect of regulation 15(1A). Both Scottbridge and the British Nursing Association cases were decided on the old version of regulation 15. It is now materially different, having been amended with effect from October 2002.
22. Mr West, representing the employers, does not question those authorities but submits that they have no bearing on the amended version of regulation 15. His contention is that under the original regulation 15 the provision about sleeping at the place of work was in terms stated to be an exception to the principle which deemed periods when an employee was available for work as time work. .However, the similar provision in what is now regulation 15(1A) is not stated in terms to be an exception to that principle which is enunciated in the current regulation 15(1). There is therefore no justification for reading that provision in that limited way. Regulation 15(1A) ought to be seen as a qualification to the fundamental definition of time work found in regulation 3. It excludes from the definition of time work periods which would otherwise fall within its scope.
23. We do not accept that analysis. Regulation 15(1) commences with the words "Subject to paragraph 1A". In our view that makes it plain that regulation 15(1A) has to be seen as qualifying the effect of regulation 15(1). It is not a self standing provision which qualifies the definition of time work in regulation 3; it has no impact on periods of actual work. The amendment was not intended to alter in any fundamental way the previous law. The amendments were minor. For example there is now an obligation on the employer to provide suitable facilities for sleeping before the exception will apply. That was not a requirement of the original regulation.
24. It follows that, in our judgment, the analysis in the two earlier cases was plainly correct and is equally applicable here. The claimant was at work for the whole of the shift, essentially for the reasons given in Scottbridge. Like the claimant in that case even during the time when he was permitted to be asleep, he was still required to deal with anything untoward that might arise in the course of his shift. It was not a case where he was deemed to be at work although only available to work. So neither regulation 15(1) nor regulation 15(1A) were ever engaged. In our judgment, the Tribunal was right to say that Scottbridge was indistinguishable and should be followed.
25. We recognise that there is some artificiality in saying that someone is working when he is sleeping, but the justification for this, and the steps which the employer might take to ensure that he is getting value for the wage paid, were summarised as follows by Lord Johnston when hearing the Scottbridge case in the EAT (para 9 ):

"… it is wholly inappropriate for the employer while requiring an employee to be present for a specific number of hours, to pay him only for a small proportion of those hours in respect of the amount of time that reflects what he is physically doing on the premises. The solution for an employer who wishes an employee to be present as a night watchman or the equivalent, is to provide him with alternative and additional work on the premises which enables him both to provide the employer with remunerated time and also the protection of someone on the premises for security reasons."

Cross appeal.

26. The claimant cross appeals on the grounds that he was contractually entitled to both the fixed payment and the minimum wage for all the shift hours. It is submitted that this is the effect of the contract into which he entered. This was a matter which was raised in his Claim Form before the Employment Tribunal, but it appears there was no argument addressed to it and it was not considered by the Tribunal itself. Mr West, representing the employers, has contended that we should not allow the point to be argued now. However, we are satisfied that there are sufficient findings of fact for the issue to be determined, and it is appropriate in the circumstances that we give leave for the point to be considered.
27. Mr Rossiter, who appeared in person before us, puts his point very simply. He submits that the payment for sleeping in is in the nature of an attendance allowance. It should not be considered as part of the basic pay. This is confirmed, he says, by the fact that the claimant was paid separately and in addition for the time when he was actually at work.
28. He relies upon a decision of this Tribunal, Aviation & Airport Services Ltd v Mrs Bellfield UKEAT/194/00 (HH Judge Clark presiding) where a payment which was referred to as an attendance allowance was treated as being quite independent of the basic pay. In that case there was an attendance allowance of £55 per week payable if an employee worked the whole of a rostered shift for a given week without absence, lateness or other default. It was a sum which was related, in other words, to satisfactory attendance and performance. The basic rate was less than the minimum pay. The employer contended that he ought to be allowed to take account of the attendance allowance as part of the basic pay. Not surprisingly, the EAT rejected that argument. This was not an automatic payment which would be made to all employees as part of their wage. It was a bonus which was payable over and above the basic pay only to those employees who met certain conditions. That is not this case. Here the fixed sum was payable automatically as part of the consideration for the work performed. It was not a separate payment contingent on the employee meeting certain conditions other than simply being at work and which would not be paid unless those conditions were met.
29. We should add that we think this argument is singularly without merit. The very basis of the claimant's successful appeal is that although the employers contended that he was not actually at work but only available for work when sleeping, in fact he should be treated as actually at work even during those periods. In short, he challenges the employer's description that he has merely been attending work and says it is inaccurate. Yet for the purposes of this argument he contends that the employers' description was correct and that since he was being paid this sum simply for being available for work, he should be paid separately for actually being at work. This is not an attractive submission and for the reasons we have given we think it is wrong.

Disposal.

30. Both the appeal and the cross appeal are dismissed.