City Of Edinburgh Council v Lauder & Ors (Working Time Regulations) [2012] UKEAT 0048_11_2003

EAT
City Of Edinburgh Council v Lauder & Ors (Working Time Regulations)
[2012] UKEAT 0048_11_2003 · 2012-03-20
[1]Ten employees of the City of Edinburgh Council who have jobs which used to be known as ‘sheltered housing wardens’, presented pay claims to the Employment Tribunal. They contended that they were being paid less than the national minimum wage (“NMW”) once time spent on call was taken into account.[2]This is their employer’s appeal from the judgment of an Employment Tribunal sitting at Edinburgh (Employment Judge Mr C Lucas) registered on 15 July 2011. Put shortly, that judgment found that the Claimants were, in a normal five day week, to be regarded as being engaged on salaried work – for the purposes of the National Minimum Wage Act 1998 (“the 1998 Act”) and the National Minimum Wage Regulations 1999 (“the 1999 Regulations”) – during a total of 71 hours.[3]I will continue, for convenience, to refer to parties as Claimants and Respondents.[4]The Claimants were represented by Ms S Craig, solicitor, before the Employment Tribunal and before me. The Respondents were represented by Mr M Clarke, solicitor, before the Tribunal and by Mr S Gorton QC before me. Background[5]Each Claimant is employed in a role which is now known as “Resident Housing Support Worker” but used to be referred to as “Sheltered Housing Warden”. Each of them work in one of the Respondent’s sheltered housing schemes. Each of them qualifies for the national minimum wage under section 1 of the 1998 Act. Their contracts state that their normal working week is 36 hours [1] . Those hours are worked in periods between 8.30 and 17.30, Monday to Friday. The Claimants have a degree of flexibility as to where, within those periods, they fit their 36 hours. They are provided with tied accommodation, free of rent and council tax and they have each entered into an occupancy agreement with the Respondents in respect of the homes thus provided. The accommodation is, in terms of their contracts, stated to be “In order that [they] may perform the duties of” their job and they are required to occupy it whilst so employed.[6]The terms of the occupancy agreement demonstrate that the Claimants are free to occupy and use the accommodation as their home.[7]The Claimants’ written job descriptions explain that their main role was to facilitate independent living to tenants, whilst offering support where necessary. Under “Other Information”, at part 7.10 of the document, they provide:
“Required to provide an emergency response whilst on duty and at night.”
[8]Wardens were required to be resident at their tied houses during their working week and to be “on call” at times outwith normal working hours during their working week.[9]According to the Tribunal’s findings in fact, the Respondent’s sheltered housing schemes are generally purpose built accommodation units for elderly or other vulnerable people to live independently but, usually, with the support of an on-site warden available to them. The Claimants’ duties involved encouraging and enabling the residents in the scheme to live independently, being aware of their normal living patterns and attending to emergency situations if they arose.[10]The accommodation units are each equipped with an alarm system which connects with the Claimants’ tied accommodation and also connects to a central alarm centre at Chesser House, Edinburgh. The Tribunal made no findings in fact regarding the way in which the alarm system is attended to at the Chesser House end. There are no findings as to whether there are employees who have specific tasks allocated to them in relation to it or not. In short, nothing is known about how the Respondents go about attending to the alarm system when it is connected to Chesser House – it is not, for instance, known whether it is, in turn, linked up with some other alarm monitoring system. The alarm connection to the Claimants’ accommodation is not switched on between 17.30 and midnight on weekdays or at the weekends – it is switched on at night on only four nights each week.[11]The Claimants can hand the alarm connection over to Chesser House at any time around 17.00 hours but are obliged to take it back by midnight on four nights of the week. They generally take back the alarm connection at some point between 22.00 hours and midnight, just before going to bed. The ‘taking back’ routine takes 10-15 minutes.[12]If the Claimants are called out during the night they can claim time off in lieu or overtime payments.[13]The Respondent’s records for more than five years prior to December 2010 demonstrated that none of the Claimants had claimed overtime payments or time off in lieu other than on a very occasional basis. Six of them had never done so. The Issue[14]The issue with which the tribunal was concerned was whether the time involved in taking back the alarm connection, and the time between midnight and 8.30am on those four nights of the week when the alarm system was connected to the Claimants’ tied accommodation was “salaried work” for the purpose of the 1998 Act and the 1999 Regulations.[15]The Claimant’s contention was that(a) the time involved in ‘taking back’ the alarm system at some point between 22.00 hours and midnight; and(b) the time between midnight and 8.30am on those four nights when the alarm was connected to their tied house, was all salaried work for which they were entitled to be paid the NMW. The 1998 Act[16]The 1998 Act established the concept of the NMW. Section 1(1) requires a person who qualifies for the NMW to be remunerated “in respect of his work” at a rate that is not less than the NMW.[17]Section 2(2) empowers the Secretary of State to make regulations including for the purpose of determining what is the hourly rate at which a person is to be regarded as remunerated by his employer in respect of his work for any pay reference period.[18]The 1999 Regulations lay down a procedure for determining whether the NMW is paid or not which involves taking the total remuneration in the relevant pay reference period and dividing it by the hours worked (see reg 14). In so far as there is a shortfall, it must be made good. The relevant part of s17(1) of the 1998 Act provides the mechanism:
“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 at any time (‘the time of determination’) be taken to be entitled under his contract to be paid, as additional remuneration in respect of the period whichever is the higher of [two amounts]…..”
The 1999 Regulations[19]Whether an employee has been paid the NMW is ascertained by dividing his/her total remuneration for the pay reference period by the total hours worked in that period. The pay reference period in the current cases is one week.[20]There is no definition in the 1999 Regulations of “work” as such, but for the purposes of calculation an employee’s hours worked are categorised as either time work, salaried hours work, output work or unmeasured work. In the present case, the Claimants worked “salaried hours work”.[21]Regulations 15 and 16 contain various provisions regulating what does and does not count as, respectively, time work or salaried hours work in certain particular situations. Regulation 16, which applies to salaried hours work, is the relevant provision in the present case. I would refer, in particular, to paragraphs (1) and (1A):
“(1) Subject to paragraph (1A), time when a worker is available 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 in 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.”
[22]Although the words ‘on call’ are not used in regulation 16(1A) it seems plain that the circumstances to which it refers are those where the worker’s normal work is something he does other than during the sleeping hours to which the sub-paragraph refers, albeit that after that work is finished, he, at some point, sleeps at or near his place of work and may – but will not necessarily - be woken up and called on to work. If that happens then the time he is awake for the purpose of working during what would otherwise be a sleep period counts for NMW purposes. It only counts if he is called on, not otherwise.[23]That interpretation accords with the views expressed by HHJ Reid QC following a thoughtful and thorough review of the relevant authorities, in the case of South Manchester Abbeyfield Society Ltd v Hopkins and another [2011] IRLR 300. He summarised matters as follows:
“38. We take the view that for NMW purposes the cases show a clear dichotomy between those cases where an employee is working merely by being present at the employer’s premises (e.g. a nightwatchman) whether or not provided with sleeping accommodation and those where the employee is provided with sleeping accommodation and is simply on call. In the latter class of case the employee may be able to call the WTR into issue to assert all the hours on call are working hours within the WTR, a breach of those regulations and a claim for compensation arising from the breach. However in the latter class of case the employee cannot bring into account all the hours spent on call for the purposes on a NMW claim. He can only do so (because of the terms of NMWR regs 15(1A) and 16(1A)) for such hours as he is awake for the purpose of working. In this case, of course, there is no claim under the WTR, only the contractual claim under the NMW.”
[24]The facts of South Manchester were very similar to those of the present case: the claimants were a housekeeper and deputy housekeeper at sheltered accommodation who had specified normal daytime working hours but were also required to be on call at nights. HHJ Reid QC considered that their circumstances were clearly distinguishable from those of the claimants in British Nursing Association v Inland Revenue [2] , where the work that the employees were employed to do was the very work for which they sought to be paid the NMW; the telephone answering service which they provided was the only work, provided as a “seamless service”. Hence the observations there by Buxton LJ that regulation 15 arises: “… in a case where worker is not in fact working, but is on call waiting to work.” [3][25]Regulation 15(1A) is in identical terms to regulation 16(1A).[26]Buxton LJ added:
“Regulation 15 relates to workers who are, in colloquial terms, ‘on call’. When a worker falls into that category he has to be paid the minimum wage for his waiting hours unless he is on call at home… However, if the worker is permitted to sleep when on call, the hours during which he is permitted to sleep and when he is not actually working do not count as the equivalent of time work.”
[27]Likewise, the South Manchester case can be distinguished from Scottbridge Construction Ltd v Wright [4] where the Inner House held that a night watchman was entitled to be paid the NMW for the whole of the hours he attended his employer’s premises. The fact that he was permitted to sleep when not carrying out his night watchman’s duties was of no consequence; his contract of employment made it clear that in return for the stated remuneration, he was required to attend at his employer’s premises between 5pm and 7am seven days per week. That was the job. The Inner House drew a parallel with the British Nursing Association case and rejected the contention that the case came within the exception provided for by regulation 15. It is, however, of note that the Inner House specifically agreed with Buxton LJ’s observations that regulation 15 applies to workers who are ‘on call’ [5] .[28]More recently, in the case of Wray v JW Lees & Co (Brewers) Ltd [6] , this Tribunal, Underhill P presiding, agreed with HHJ Reid QC’s analysis and added:
“12. We would venture, for the purpose of the issues which arise in the present case, slightly to expand that summary without, we think, differing in any way from what Judge Reid QC is saying: (1) There are cases where an employee is required during the night to perform certain tasks or undertake certain responsibilities, such as dealing with phone enquiries, as in British Nursing Association v Inland Revenue [2003] ICR 19, or undertaking the responsibilities of a night-watchman, as in Scottbridge Construction Ltd v Wright [2003] IRLR 21 . If that is the nature of the job the employee is in truth working throughout the period in question, even if actual tasks only come up intermittently or infrequently and even if he or she is free to sleep in the intervals between those tasks. In such cases paragraphs (1) and (1A) of regulations 15 and 16 do not come into play at all: as explained in Burrow Down Support Services Ltd v Rossiter [2008] ICR 1172 , the role of paragraph (1) is to deem the employee to be working in periods when he is in fact not working but is required to be available to work (subject to the two exceptions identified below). (2) In other cases the employee is not required to work but is required to be at or near his place of work and available to work: the usual shorthand for such cases is “on call”, though that term is not used in the Regulations. That is the kind of case where the employee is deemed to be working by paragraph (1) of regulations 15 and 16, but subject to (a) the ‘at home’ exception in paragraph (1) itself and (b) the ‘sleeping facilities’ exception in paragraph (1A). The distinction between the two classes of case may be difficult to draw in some particular factual situations. The cases of night-sleepers in residential homes, such as were under consideration in Burrow Down and Smith v Oxfordshire Learning Disability NHS Trust [2009] ICR 1395 may be examples.”
[29]In Burrow Down Support Services Ltd v Rossiter [7] , this Tribunal, Elias P presiding, had held that a night sleeper in a care home who attended work between 10pm and 8am was working throughout those hours for the purposes of the 1999 Regulations because they considered that the circumstances were indistinguishable from those of Scottbridge Construction [8] .[30]In Smith v Oxford Learning Disability NHS Trust [9] , whilst the respondents had conceded that the hours spent asleep by a support worker at a residential care home were work for the purposes of the 1999 Regulations, in addition to his daily working hours, this Tribunal with, again, Underhill P presiding, expressed surprise at that concession [10] , which, in the light of the above line of authority is entirely understandable.[31]I would finally refer to the case of MacCartney v Oversley House Management [11] as it was heavily relied on by Ms Craig. There, the claimant was a resident manager of Oversley House, where people over 60 years of age resided. Under her contract of employment her hours were stated to be “four days per week of 24 hours on site cover.” Her claim was under both the Working Time Regulations 1998 and the 1998 Act and 1999 Regulations. Most of the reasoning in the judgment relates to the former. As regards the NMW claim, it was dealt with briefly at paragraph 64 where HHJ Richardson QC said:
“In our judgment the claimant undertook ‘salaried hours work’ within the meaning of regulation 4 of the 1999 Regulations. Her salary was expressed to be £8750 in respect of ‘four days per week of 24 hour on site cover. This, in our judgment, was a contract to do salaried hours work: see regulation 4(1)(a) and (2). The claimant was entitled to be paid for an ascertainable basic number of hours in a year: regulation 4(2)(a). She was entitled to be paid an annual salary regardless of the hours actually worked in any particular week or month: regulation 4(2)(b). She had, in respect of those hours, no entitled to any payment other than annual salary: regulation 4(2)(c). Moreover the work which she did under that contract was work in respect of which she was not entitled to payment in addition to annual salary: see regulation 4(6). For the reasons we have given, the claimant was at work throughout the period when she was providing on site cover, so regulation 15(1) does not arise: see British Nursing Association v Inland Revenue …”
[32]Put shortly, the decision in MacCartney was based on the terms of the claimant’s contract which showed that her normal work was the whole of the 24 hour period referred to for four days each week and the case was, accordingly, on all fours with British Nursing Association . It was not an ‘on call’ case.[33]These authorities are not, in my view, conflicting but, rather, demonstrate that there are two different types of case, one where the job in question is a ‘sleepover’ job like that in Scottbridge and one where it is not but the worker sleeps at or near the workplace and may be called on to work during that period of what would otherwise be sleep, in addition to , his normal work. Regs 15 and 16 apply in the latter case, as an anti-avoidance provision – the sleepover period is not to be ignored - but with the amelioration that it is only when the worker is actually awake for the purposes of working that he is entitled to the NMW.[34]I should add that although reference was made to the case of Anderson v Jarvis Hotels [12] the claim was purely a contractual one and the decision did not determine whether or not the 1999 Regulations applied. The Tribunal’s Judgment and Reasons[35]The Employment Judge refers to the Claimants’ contracts of employment and the amendment effected by the single status agreement which provided, as above noted, that their normal working week was 36 hours Monday to Friday. He also found that the Claimants’ normal working day was the 8.30am to 17.30 period referred to above (see paragraphs 32 and 33). The Employment Judge did not, however, find that reg 16 applied. He provides a somewhat discursive and lengthy judgment which, unfortunately, becomes unnecessarily bogged down in irrelevant minutiae at times. He found that the authorities are sometimes conflicting. He relied on MacCartney as being a decision which “on balance” favoured the Claimants (see paragraph 124) – I do not consider that it does, as explained above. He also relied on Anderson as favouring the Claimants (see paragraph 131) – again, I do not consider that it does, as explained above. He found that the South Manchester case could be distinguished on its facts but, unfortunately, does not deal with HHJ Reid QC’s discussion of principle. Ultimately, on the basis, he says, of parties’ submissions, the legislative provisions, the case authorities referred to and “a good measure of common sense”, he concluded that the whole of the time between 8.30am and 17.30 and midnight (the latest time at which the alarm was taken back) and 8.30am was salaried hours work (paragraph 136). At paragraph 137, he states:
“The Tribunal has also found that the exceptions contained in regulation 16 of the Regulations did not apply to the Claimants who, in the finding of the Tribunal were not “on call”, “on standby” or “waiting to work” but who, throughout the period beginning at, at the latest midnight and continuing right through until 17.30 the following day were actually at work albeit, from time to time – (or even for protracted periods) - sleeping.”
[36]The Employment Judge took into account, when reaching his conclusion, the fact that the Claimants were obliged to reside in their tied accommodation (see paragraph 135) and the fact that they were obliged to take back the alarm connection on each of the four nights in question (paragraphs 135–136). It is not clear why he considered that these were relevant to the reg 16 issue – in every ‘on call’ case, there will be a measure of obligation imposed on the worker. The appeal Submissions for the Respondent[37]Mr Gorton referred to there being a dichotomy between ‘working cases (which he referred to as ‘the job’ cases) and ‘on call cases’ (which he referred to as where there were duties in addition to the job, with the worker waiting to work). It had, he submitted, long been established that the if the essential job, measured by the daily routine or shift, permitted the individual to sleep/work intermittently or carry out no functions at all during that period, that did not mean that it was not time work or salaried hours for the purposes of the 1999 Regulations. It did not matter if the intermittent nature of the work meant that the individual merely responded to demand – that was still his core job and he was entitled to the NMW for the full hours of the shift. Equally, however, it had also been established that if the individual was not carrying out their essential or core job during additional hours when he was available and waiting to work then whilst those hours would be deemed to be salaried hours work by reg 16, the exception would apply. Simply being on call did not mean that a person was entitled to be remunerated as if they were working unless they were actually awake for the purposes of working: South Manchester Abbeyfield Society Ltd .[38]Mr Gorton submitted that the present case was a good example of the dichotomy. If the Claimants had only worked on the night alarm cover service between midnight and 8.30, as their core job, then reg. 16 would not have applied. They would have been doing their job. However, as the Claimants core hours were between 8.30am and 17.30pm they had, prior to midnight, worked their core hours. During the period midnight to 8.30am, they were merely waiting to work, on call. Those hours were deemed to be salaried hours work under reg. 16 but the exception applied.[39]Put shortly, he submitted, merely being required by contract to remain in tied accommodation overnight could not be regarded as work for the purposes of the 1999 Regulations.[40]Mr Gorton referred to the above authorities, relying in particular on the analysis in South Manchester Abbeyfield Society Ltd .[41]The Employment Tribunal had erred, in his submission, because notwithstanding having found that the Claimants’ core hours were between 8.30am and 17.30, it was not open to them to find that this case fell within the ‘on call’ category. Reg 16 plainly applied. The Tribunal had not asked itself whether reg 16 applied and, if so, whether any of the exceptions applied, as it was obliged to do. Reg 16 plainly applied as did the exceptions.[42]Separately, regarding the finding that the process of taking back the alarm service was work, Mr Gorton submitted that those were not on call duties. The Claimants were not, in so doing, awake for the purposes of working. They were merely taking steps preparatory to the possibility of being awake for that purpose. That could not, accordingly, be salaried hours work under reg. 16. Submissions for the Claimants[43]For the Claimants, Ms Craig submitted that the nub of the issue was what were the Claimants doing between 8.30am and 17.30? The Tribunal had found that that was work and that, in addition, the night-time hours were part of the same work. They were right to do so. The Claimants did not work core hours plus additional hours. The regulations did not refer to core hours and nor did the Tribunal. She suggested, initially, that a document at p.102 of the appeal bundle showed that the core hours were but a few hours within the daytime 8.30 to 17.30 period but appeared to retreat from that submission when the document was subjected to closer examination.[44]Ms Craig submitted that the term ‘on call’ was not in the regulations and was of no assistance. It was used in differing contexts. The BNA case was comparable as, in particular, was MacCartney . The present Claimants were just like those in MacCartney .[45]She said that she accepted Mr Gorton’s analysis of the law save that she parted company when it came to the dichotomy to which he referred. There was nothing in the legislation or the authorities to say that if all the Claimants were doing at night was sleeping then that would not be work. Their monitoring responsibilities were work. This was not a reg 16 case because what the Claimants were doing was work. There was no need to consider reg 16. The appeal should be dismissed.[46]Ms Craig accepted that if the appeal was upheld regarding the midnight to 8.30am period leaving only an issue about the time taken to take back the alarm then that was of no moment for the Claimants as no NMW shortfall would be able to be demonstrated. Discussion and Decision[47]Mr Gorton was right, in my view, to focus firstly on the fact that these Claimants had what he referred to as ‘core’ hours of work – they are referred to by the Tribunal as the Claimants’ normal working hours but nomenclature is not important. The point is that they were employed under a contract which was for 36 hours work per week, to be worked between the hours of 8.30am and 17.30, for a stated remuneration related to those periods of work. The case thus falls fairly and squarely into the second category discussed above – the ‘on call’ category where the worker’s main job is separate from and done at a time other than the ‘on call’ period. It is, I agree, exactly the sort of case which is envisaged by reg 16(1A). The Claimants were available near to their place of work, were provided with suitable facilities for sleeping there and were not expected or required to be awake unless called on to work during those ‘on call’ hours. For the reasons explained by the Court of Appeal and the Inner House, referred to above, whilst the expression ‘on call’ is not used in the legislation, it is a convenient and accurate way of describing the situation to which regs 15 and 16 apply.[48]The Employment Judge has undoubtedly fallen into error. He appears to have failed to recognise the distinction that is drawn in the authorities between the two different types of case. If, as may be the case, the determining factor in his mind was that the Claimants had to be in their accommodation, with the alarm connected and available for work if called on during the night time periods referred to, he is wrong to have been so persuaded. It is clear from the authorities that the fact that a worker may have to be available ‘on call’ outside his normal working hours, does not mean that, for NMW purposes, all those hours are to be regarded as work. Whilst matters may, as Mr Gorton accepted, have been different if all that the Claimants were employed to do was to be available during the night time hours to be called on if required – like the nurses in the BNA case or the night watchman in Scottbridge - that was not the position.[49]I consider that there may be merit in Mr Gorton’s submission that the 10-15 minutes involved in taking back the alarm at night could not constitute work under reg 16, for the reasons he gives but it is not necessary to determine that issue in the circumstances; as above noted, I was advised that if those were the only periods at issue, there was no NMW shortfall. Disposal[50]I will pronounce an order upholding the appeal, setting aside the judgment of the Employment Tribunal, and substituting a finding that the Claimants were not performing salaried hours work between midnight and 8.30am on the nights that the alarm system was connected to their tied accommodation. [1] Their original contracts provided for a working week of 35 hours 45 minutes but after the adoption of the single status agreement, it was increased, in the autumn of 2010, to 36 hours. [2] [2003] ICR 19 [3] At paragraph 14. [4] [2003] IRLR 21 . [5] See paragraph 12. [6] [2012] ICR 43 . [7] [2008] ICR 1172 . [8] See paragraph 24. [9] [2009] ICR 1395 [10] See paragraph 13. [11] [2006] ICR 510 . [12] UKEATS/0062/05/RN.