Charities must deal with issues around National Minimum Wage and on-call workers, writes Ben Doherty, Head of Employment at Lindsays

A recent legal case has spotlighted a vexed question around National Minimum Wage (NMW) and the obligations of charities: when does sleep count as work?

Like so many issues around NMW, the regulations seem to read clearly, but in practice employers face a host of pitfalls. And for social care charities, which often require to have workers on call overnight, sleep has been the cause of much legal uncertainty and insomnia.

This latest case highlights the importance of getting to grips with – and getting advice on – this area. It also reinforces the need for employment contracts to be completely clear on what duties workers have when they are on call or asleep, and to reflect the reality of each situation. If a worker’s duties change, contracts may need to be updated.

The details of this particular case (Focus Care Agency v Roberts) will strike a chord with charities of all sizes, which is why it’s so important. The charity in question ran supported living facilities for vulnerable adults. At night, it usually had two workers available – one carrying out duties and the other doing a sleep shift, just in case they were needed to help out.

The ‘sleep-in’ workers were paid a flat rate of £25 per shift, rather than receiving hourly pay. This was on the basis they were usually asleep, and the Minimum Wage Regulations provide that ‘time work’ attracting the NMW only applies when workers are actually awake and available to work.

It may sound cut and dried, but it’s not. The worker argued he was entitled to hourly pay since he was actually doing ‘time work’ even when sleeping. And he won.

On a typical eight-hour shift and with minimum wage now up to £7.50 per hour, we’re looking in such situations at a potential additional wage liability per worker per night of £35. So the issue carries huge financial significance for both social care employers and staff.

However, while the case has starkly highlighted the issue, the judge also emphasised that each case will depend on its own circumstances and facts. Factors that came into play in deciding whether sleeping time is working time included:

• Would workers be disciplined if they left the premises during the shift, or were they free to come and go?
• How much responsibility was placed on sleep-in workers during the shift? For example, was it likely they may be needed to perform personal care for clients (thereby having a greater burden of responsibility) or less likely, such as only being required to act in the event of an emergency, such as a break-in?
• How immediately did sleep-in workers have to be available? Would they need to be woken by another worker or have to make the decision to intervene themselves?

These issues will clearly vary from situation to situation. There are still no easy answers to the question of when sleep constitutes work, but it should be clearer to charities that there’s an issue here, and one they now have to address.

They should also be aware this is by no means the only pressing issue they must address around NMW, there are wider employment law issues such as working time or transfers of contracts. The consequences of blundering on these points are not just limited to legal costs and possible fines, but could also lead to wider reputational, recruitment and sustainability issues.

It’s safe to say that no one comes into the social care sector because they want to grapple with employment law dilemmas, but it’s an area that really can’t be avoided.

Until the UK formally leaves the EU, European Economic Area (EEA) and Swiss nationals remain entitled to live and work in the UK without being subject to immigration control – employers need only carry out appropriate checks to confirm rights to work.

What will happen after the UK is no longer part of the EU remains unclear but it is likely that immigration control, possibly similar to the current points-based system, will apply to such workers. This means more employers may need to apply for sponsor licences and comply with sponsor obligations.

Right to work checks for all
At present, UK employers should carry out right to work checks for all staff, including Scottish and EEA nationals, to avoid any inference of discrimination. Checks must be carried out before work starts and at the same stage for all applicants. Shortlisting is a good point at which to request the necessary documents. Offers of employment should be conditional on candidates providing evidence of appropriate right to work and withdrawn if not submitted. Contracts of employment should require that appropriate permission be held at all times and be clear that, if not, employment may be terminated immediately.

To avoid the extensive penalties for employing illegal workers, employers should ensure they can establish a ‘statutory excuse’ showing right to work. This is a 3-step process involving:
Asking shortlisted applicants to produce original documents specified in Home Office lists. Utility bills, photocard driver’s licences or NI numbers alone are insufficient.
Checking, in the presence of the worker that the documents relate to the individual, are original, unaltered and valid. For example, do the photo and date of birth match?
Taking a copy of the evidence and keeping it securely, recording the date of the check and when follow up may be required. This information should be retained for two years after the end of employment.

Sanctions for employing illegal workers are substantial, with civil penalties of up to £20,000 per illegal worker. Since 2016 there have been extensive powers to search premises, seize and retain evidence and to issue a business closure notice or illegal working compliance order where businesses have flouted right to work rules. The criminal offence of employing someone the employer knows, or has reasonable cause to believe is disqualified may result in an unlimited fine or prison sentence of up to five years. Employers who hold a sponsor licence may also see their sponsor licence revoked.

Common and future problem areas
Many employers are clued up on the initial checks, when an employee starts work, but forget that this is not the end of the matter. For example, if a worker has time limited permission to work, the expiry date must be noted and further checks carried out before that date, to avoid penalties.

Care must also be taken with non-EEA or Swiss national employees, subject to immigration control, in a redundancy situation, as being offered alternative employment, which does not equate to their current role, whether in salary, location or duties, could invalidate their visa. Renewed permission may need to be sought for the new role. Similarly, such an employee who becomes disabled and requires adjustments, such as reduced hours, may find they are in the same situation.

Post Brexit, as more employers are likely to become sponsors and more migrant workers subject to immigration controls, these issues will become increasingly common. This is an issue to watch; being up-to-date with right to work checks and immigration status will make it easier to adapt to whatever post Brexit regime is eventually adopted. Employers who are unclear on their obligations in relation to particular workers should seek early advice.