Can we continue to pay a set fee for sleep-in shifts as a result of the recent Mencap case?

Posted in : Seamus Says - Employment Law Discussion on 9 April 2021
Seamus McGranaghan
O'Reilly Stewart Solicitors
Issues covered: Working Time regulations; National Minimum Wage; Payment for Sleep-in Shifts; Working Time and Leave

We pay a set fee for sleep-in shifts. Does this recent ruling, the Mencap ruling, so we'll take a wee bit on that, mean that we can continue to do that and a secondary one, when it comes to calculating holidays, should the whole time spent on an overnight sleep-in shift be included in hours worked for holiday pay or just the time they are awake and working?

Scott: So let's go back to the Mencap case and a little bit of background briefly, Seamus, and then look at this one here where they pay a set fee . . . so they're currently paying a set fee, and can they just continue to do that?

Seamus: Yeah, the Mencap case relates to . . . again, this is a Supreme Court decision that we received in March I think, so the week before they asked the case around the 21st of March. And this is a good case in terms of we have complete clarity now in respect of the position, so the question is asking, you know, "We pay a set fee for sleep-in shifts. Does the ruling mean that we have to continue to do that?" Or, "Does this mean that we can continue to do that?" The answer to that is, in essence, yes. So in this case the issue to be decided was whether homeworkers who are required to remain at home during their shift or if it's in a residential care scenario for workers that sleep in. And so if I have to, as part of my job, sleep overnight in the organisation, am I entitled to my normal national minimum wage for the time that I sleep in? Or am I only entitled to the national minimum wage for the hours actually worked? So those are the questions that the Supreme Court were dealing with.

Interestingly, they did go back, the Supreme Court, they looked at this sleep-in shift time on whether or not that qualified as work for the purposes of the national minimum wage regulations, and essentially what they said was that there was no obligation to pay the hourly rate or to pay the national minimum wage for those sleep-in shifts, that there was only an obligation to pay where there was work involved during those shifts.

So background to the case was that the claimant would essentially sleep in during the shift but would rarely have to engage in actual work so that there would be days and weeks where the claimant was able to sleep entirely during the shift and there were times where maybe something would happen in the middle of the night and they would have to engage in some form of work. Interestingly, they were paid a set fee in relation to that, the sleep-in shift. So say that they were getting £50 for the shift itself, you know, that would probably in all essence cover the national minimum wage in any event, but the circumstances are essentially if they were having to do additional work beyond, that they were maybe getting and their national minimum wage or their early rate in relation to the work that was involved during that position, so getting the set fee and then getting payment on top of that.

And the Supreme Court has come back clearly and said, "Look, the situation is that if you doing those sorts of sleep-in shifts, the employer can agree to a set fee with you in relation to that. If you're having to work during that then, yes, you're entitled to the national minimum wage. If your set fee covers the national minimum wage, then effectively you're being paid for it in any event."

And so the Court has been very clear. What they made a distinction on, which was interesting, was that they said that they were drawing a clear distinction between whether an individual is actually working or is available for work and so the aspect of sleep-in, and then they said that you were available for work if you were only available for work, it should only be the time that you're actually working that counts towards the calculation of the national minimum wage. So they've been very clear about the position.

Interestingly, they did go back to when they looked at the national minimum wage aspect. They did go back to consider the Low Pay Commission and the . . . Legal Island has a really good overview on this, Scott. I'm just saying that, at this point, in terms of the online hub, there's a good overview in relation to that about the Low Pay Commission, how it was established, and the reasons for it . . . why was it established at the time, the LPC or the Low Pay Commission had recommended that workers should be entitled to national minimum wage when they're awake and unrequired to be available for work.

So the court specifically went back and looked at that. They also overturned a 2002 case of British Nursing Association versus the Inland Revenue. And it was, again, about this aspect of being available for work and actually working, but we do have clarity that the circumstances are that you can be paid a set fee for those shifts and if that works out less than the national minimum wage for any hours that you actually have to work, you're entitled to the national minimum wage at that point.

Scott: Okay, I mean, I suppose it's a difficult one because if the person doesn't stay on the premises, the operation of those care homes and such, like, they couldn't operate. They need somebody there, not only just for insurance purposes, but because something might go wrong. And then you'll have people maybe who work in hospitals will be getting paid throughout the night. They may be doing some paperwork. They may not be doing some paperwork, but they're going to have to be there in case there's an emergency, and you can understand where the conflict arises.


This article is correct at 09/04/2021

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Seamus McGranaghan
O'Reilly Stewart Solicitors

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