Employment Law Update What you need to know as a business owner Presented by Michele Peckham Employer Tribunal Advocate/Manager TODAYS TOPICS Sleep-Ins National minimum wage & Living wage
Travel To Work Sleep ins CASE LAW Mrs J Whittlestone v BJP Home Support Limited and Mr J Esparon t/a Middle West Residential Care Home v Miss L SlavikovskaThe EAT decided that the employees in both cases were entitled to be paid the NMW as overnight shift deemed time work and therefore sleep exemption did not apply to minimum wage calculations. Both cases required employees to stay at the home all night they could face disciplinary action if they left the home and could not for instance slip out for a late night movie or for fish and chips.
Sleep Ins In the second case, the EAT said that if, in cases such as this, the employer requires the employee to be on the premises pursuant to a statutory requirement to have a suitable person on the premises "just in case that would be a powerful indicator that the employee is being paid simply to be there and is thus deemed to be working regardless of whether work is actually carried out. The fact that she was allowed to sleep during the shift was Irrelevant.
Sleep Ins Note: Different legislation re some of the cases, some brought under National Minimum Wage regulations and others under the Working Time Regulations different tests apply. Alexander v Jarvis Hotels 62/2005 EAT Hotel Manager required to stay overnight and required to be on the premises in case of health and safety issues. Could sleep during his shift still counted as working time.
Sleep Ins City of Edinburgh Council v Lauder 48/2011 EAT employee on call at sheltered housing providing residential warden services. Provided with accommodation - time on the premises overnight was not counted as working time - no statutory requirement to be on site. Sleep Ins Walton v Independent Living Organisation
2003 CA; Live in Carer required to be on the premises for 72 hour shifts only entitled to minimum wage for time she was actually working and carrying out her duties. In this case some of her hours were properly categorised as unmeasured working time and not time work. Also Daily Averaging Agreement was also in place in respect of the time which was Sleep Ins McCartney v Oversley House
Management 2006 On call work - manager of residential home with on call obligation was engage on salaried work with the result that following a calculation of her on call hours, was found to be paid under the NMW. NOTE: She was obliged to be there. Sleep ins When a worker is asleep and waiting or available to work, are they in fact
working by just being there? Sleep ins Changes to National Minimum Wage Regulations April 2015 Government Guidance gives an example of working hours for which the minimum wage must be paid: A person works in a care home and is required to work overnight shifts where they sleep on the premises. The persons employer is required by statute to have someone on premises for health and safety purposes. The person would be disciplined if they left the premises at any stage during the night.
It is likely that the person would be considered to be working for the whole of the overnight shift even when they are sleeping. Cross ref Alexander care and the McCartney Case, Sleep ins Changes to National Minimum Wage Regulations April 2015 Government Guidance example of working hours for which the minimum wage need not be paid: A person works in a pub and lives in a flat above the pub. The employer requires the person to sleep there. However the person can come and go as they please during the night as
long as they do sleep there. There are no specific responsibilities during the evening rather the person sleeps there so the flat is occupied i.e. to reduce the likelihood of the premises being burgled. The person is likely only to be entitled to the NMW when they are awake and dealing with any emergencies in the night. Cross ref the Lauder Case (above). Department for business innovation and skills calculating the National Minimum Wage Feb 2015 p 32. Sleep ins In order to meet the requirements of the NMW legislation:
The average payments over the employees pay reference period must meet the National Minimum Wage. Pay reference periods are usually set by how often someone is paid, e.g. 1 week, 1 month or 10 days. A pay reference period cant be longer than 31 days ( a month). A worker must be paid the minimum wage, on average, for the time worked in the pay reference period.
Calculation is by dividing the remuneration (pay) by hours worked for the particular pay reference period Sleep ins Further Questions Do the additional hours worked exceed the 48 hour a week working limit? If yes will need to get employees to sign the opt out form or look to
changing shift patterns. If opt out in place, employee will need to give notice to opt back into the protection of the WTR. Travel Time In the Whittlestone case the EAT decided that: The employee worked under a rota system which required her to visit each service user in turn during the course of the day. Each visit was referred to as a shift in her contract of employment. This was assignment work which meant that the employer had to pay the NMW for the time spent travelling between each assignment. Only on the occasions when the employee had sufficient time to
travel to and from her home between each assignment was the obligation to pay the NMW not engaged. Travel Time Commuting time? Sept 2015: The case (Tyco Integrated Security SL) was referred to the Court of Justice of the European Union (CJEU) for a decision as to whether the time travelling to the first job of
the day and returning home at night from the last job was working time. The court determined that it was working time. Travel Time: Tyco Case Spanish company, they employed mobile technicians to drive to client sites to undertake work. The Company sought to argue that the travel to the first appointment of the day and travel back from the last appointment was not
working time. The ECJ disagreed. Note: UK regs do not count work travel from home to workplace as working time. What is working time? The Working Time Directive 2003 article 2 defines working time as meaning any period where the worker is: At work; At the employers disposal; Carrying out his activity or duties; This definition is reflected in the UK
Working Time Regulations (WTR). The Working Time Directive (WTD) states that with the exception of annual leave there are only two categories of time: Rest Working Time Travel Time The decision only applies to workers with no habitual or fixed place of work, e.g.
mobile workers. Travel Time What about rest breaks What about the 11 hour rest breaks? Regulation 10 of the UK WTR states that employees must have at least 11 hours rest in a 24 hour period. What happens if an employee works over 48 hours average and/or does not get enough rest breaks and they will not sign an opt out or the
workforce will not enter into an agreement? It is important to consult with employees about reducing their at work (paid) working hours and ensure that a variation of contract letter is sent and signed What does it all mean? Only applies to mobile workers; No European right to national minimum wage that is solely a UK right; Acas still studying the impact of the case
no guidance issued as yet. As many UK companies do not consider travel time to amount to working time workers could exceed 48 hour working week, and risk costly claims for breach of WTR. Consider the use of Opt out agreements. Travel Time What if my employees insists on sticking to their core hours and hence want to start work later and finish work early so they can travel within their core hours? Employers should consult with employees with a view to reaching
an agreement in respect of this and again issue a letter of variation for the employee to sign. It is difficult to enforce an increase in hours and impossible where the client is trying to enforce an increase over 48 hours average. As the Tyco case is so new, difficult to predict how an Employment Tribunal will respond to claims brought in respect of dismissal and re-engagement on new terms to bring about an increase in working hours following the Tyco case. Travel Time Consider rearranging assignments so the first and last appointments of the day are nearest to the employees home address
thus, limiting travel time. Travel Time What did the CJEU say on pay? The CJEU were very clear and specifically stated at points 48 and 49 of the judgment that, save as for holiday pay which is covered in the WTD, the WTD is limited to regulating certain aspects of the organisation of working time so that generally it does not apply to the remuneration of workers and Accordingly, the method of remunerating workers in a situation such as that at issue in the main proceedings is not covered by the WTD but by the relevant provision of national law The case provides no guidance on whether the time should be paid or
not. The first point of reference for payment issues will always be the contract of employment. Does this say the employer will pay for travel time, or is there custom and practice of doing this or a collective agreement in place? Where there is no contractual provision, agreement in place or custom and practice saying employees will be paid for travel, the Tyco provides no guidance on the position regarding payment. Travel Time What about the National Minimum Wage and specifically hourly paid employees? Express exemption contained within the National Minimum Wage
Regulations (NMW) stating that travel between an employees home and a place where an assignment is carried out is not counted as hours of work. This judgment is so new, no further guidance in respect of whether this exemption will be modified is available. There could be scope to argue that this exemption is designed to cater for traditional commuting and hence, in light of this CJEU judgment, the exemption should not apply to workers with no permanent base location. However, to date we have no guidance on this and as such, this can only be speculation and not definitive advice. Until further clarification is given, the NMW exemption is still in place.
Employers might decide to take the pre-emptive decision to ensure that when averaged out across all working hours including travel, payments made to a worker with no base location at least meets their NMW obligations. Where they do not, will need to consider whether or not to make adjustments. Where employees are hourly paid and the contract specifically states the employee will received X per hour, matters become more complex. Again, the route of least risk, but potentially unnecessary Travel Time What if the contract has an additional hours clause? Where a contract specifies that an employee should work additional hours as required and will not receive additional remuneration for
this, then on the basis employees are receiving appropriate rest breaks, have signed an opt out or work less than 48 hours and are receiving on average the NMW, no immediate further action will be necessary. Good idea to review contract templates to see whether they need to be updated and reissued to staff to reflect that there will be core hours with flexible start and finishing times on the basis of where they will be working on any given day. Travel Time Where premium rate overtime is paid for additional hours, the additional working hours gained through travel to and from
the first and last job, may lead to claims for overtime from employees. The Tyco judgment is silent on payment for these hours so further judicial guidance on this point is needed. Where contractual ambiguity employers could consider reaching some form of signed agreement with their employees Increase in National Minimum Wage National Minimum Wage from October 2015 From 1 October 2015: the adult rate is 6.70 per hour
the rate for 18 to 20 year olds is 5.30 per hour the rate for 16 to 17 year olds is 3.87 per hour the apprentice rate is 3.30 per hour the accommodation offset increases from the current 5.08 to 5.35 From 1 April 2016 Adults aged 25 and over will be entitled to a national living wage of 7.20 an hour National Living Wage
In the summer 2015 Budget George Osborne announced national Living Wage to come in on 1st April 2016 at 7.20 an hour for those aged 25 and over. Set to rise to 9.00 an hour in 2020. The government will also increase the employment allowance for National Insurance contributions from 2,000 to 3,000 in April 2016, in order to help businesses meet the increased cost of paying their staff the new wage It is anticipated that this April increase will be a one-off and that thereafter all the rates will continue to increase from the first pay period on or after 1 October each year Implications of the Living Wage
Social Care services spend about 60% of their budget on staffing. A national living wage of 7.20 an hour, rising to 9 by 2020, will have a huge impact on the cost of delivering care. Local authorities will only pay for the time that staff are with the people who use care services. This means that travel time and training and management costs are not included in councils rates yet both these have to be paid for by the employer. Question s &
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