CA-2024-001613 - [2025] EWCA Civ 956

Lord Kerr presided over the hearing in February 2020. He died in December 2020, before the judgments were handed down. It had been intended that he would write the leading judgment (see paragraph 76 of Lady Arden’s judgment). The Supreme Court then made a direction under section 43(2) of the Constitutional Reform Act 2005 that the court was duly constituted with the four remaining Justices. The lead judgment was then given by Lady Arden. Lord Carnwath, with whom Lord Wilson agreed, concurred with Lady Arden’s decision that the appeal should be dismissed for the reasons she gave. They reserved their positions, however, about whether, as she thought, British Nursing Association v Inland Revenue [2002] EWCA Civ 494; [2003] ICR 19 (‘British Nursing’) should be overruled. Their view was, instead, that, it should no longer be treated as authoritative. Lord Kitchen agreed that the appeal should be dismissed for the reasons given by Lady Arden. He agreed with Lords Carnwath and Wilson about the status of British Nursing.

The two claimants were, respectively, a care support worker and an on-call care assistant. The first claimant claimed in the ET, under the Regulations, that she should be paid an hourly rate for the whole shift. The second claimant made a claim in the ET, under of the National Minimum Wage Regulations 1999 (1999 SI No 584) (‘the 1999 Regulations’), which were in force at the relevant times, that he should be paid for the hours when he was required to be in a residential care home (‘the home’).

The first claimant cared for two vulnerable adults in their home. She did what was, for the purposes of the Regulations, salaried work during the day. She was also required to do shifts during the night, and to stay the night in the adults’ home. That was time work for the purposes of the Regulations. During those shifts she was allowed to sleep. She was not required to do any work, but had to ‘keep a listening ear’. She had to deal with any emergencies during the night. During a 16-month period she had been disturbed about six times. She was paid an allowance, and for one hour’s work for those shifts (£29.05). She was paid an hourly rate for any further work.

The second claimant worked in the home. From about 1993, he was given free accommodation in the home. He was paid £50 a week (which later increased to £90). His contract required him to be in the home between 10pm and 7am. He was allowed to sleep. During those hours the night care worker who was on duty could ask the second claimant for help. In practice he was rarely called on.

In paragraph 9 of her judgment, Lady Arden described the ‘depth of investigation and consultation’ done by the LPC in discharging its statutory functions. In paragraph 10, she said that the LPC’s first report was an important aid to the interpretation of the Regulations.

She noted that the LPC’s first report made a recommendation about sleep-in shifts. It was that workers should get an allowance and that they should be ‘entitled to [the NMW] for all times when they are awake and required to be available for work’. She interpreted the LPC’s recommendation as a recommendation that work should normally include time for which a worker was required to be available for work at the place of work. She also considered that it could be inferred that that ‘would not apply’ if the worker was at home. She called that ‘the home exception’. It also, expressly, did not apply to workers who were required to be on call and to sleep at their employers’ premises (paragraph 14).

As originally drafted, regulation 15 of the 1999 Regulations included a general rule, the home exception and the sleep-in shift in one provision (paragraph 15). Regulation 15(1A) was inserted in the 1999 Regulations by amending regulations which came into force on 1 October 2000. Regulation 15 then provided:

The second report of the LPC did not recommend ‘any legislative change’ (paragraph 16). The effect of the amendments was to narrow ‘the home exception (paragraph (1)) and the sleep-in provision. As to the latter, the new provision required suitable facilities for sleeping to be provided for the worker and removed the words “in addition to time when a worker is working” as no doubt some workers might only work sleep-in shifts’ (paragraph 16).

The 1999 Regulations were revoked and replaced by the Regulations. By the time of the relevant facts in Mencap, regulation 30 of the Regulations was in the same terms as it now is. Regulation 32 of the Regulations provided:

In paragraph 35, Lady Arden said that she should not approach the question of interpretation ‘with any preconception as to what should entitle a worker to a wage. It is clearly not the position that, simply because at a particular time an employee is subject to the employer’s instructions, he is necessarily entitled to a wage. There are many situations when a worker has to act for the benefit of his employer which do not count for time work purposes, for example when he travels between home and work…Nor…is the NMW dependent on the extent to which the work produces value for the employer or enables the employer to say that he has fulfilled a duty to someone else: that would make the NMW depended on the terms of a contract between private parties’. She added in paragraph 36 that the purposes of the NMW were ‘no doubt complex’.

The primary question was not whether the worker was working, but how his hours were to be calculated for the purposes of the NMW (paragraph 37). That was confirmed by the heading of Chapter 5. She added in paragraph 39 that ‘The use of the word “treated” in regulation 17…is a signal that a counterfactual situation may arise. It underscores that the rules enacted by the regulations may not accord with reality and that there will be occasions when hours are not treated as hours of work for the purpose of the regulations even though a different number of hours might have been determined to be worked in the absence of that provision.’

In paragraphs 40-42 she considered the purpose of the recommendation about sleep-in workers in the first LPC report. Her view was that the purpose of the first version of regulation 15 of the 1999 Regulations was to implement the LPC’s recommendation about sleep-in workers (paragraph 40). She thought that that purpose might not have been achieved in the first version of regulation 15. In paragraph 41 she suggested that that might be an explanation for the ‘subtle changes made in 2000’. Her view was that the purpose of regulation 32, like its predecessors, was to implement the relevant recommendation in the LPC’s first report (paragraph 42).

She expressed a clear view that the relevant regulations ‘must be read together so that the rules produce a harmonious whole’ (paragraph 43). Her conclusion, ‘applying the approach explained above’, was that the meaning of regulation 32(2) (or 15(1A), as the case might be) was ‘quite clear. The basic proposition is that they are not doing time work for the purposes of the NMW if they are not awake. However the regulations go further than that and state that not only are they not doing time work if they are asleep; they are not doing time work unless they are awake for the purposes of working’. It was necessary to look at the specific arrangements between the worker and employer to see ‘what the worker is required to do when not asleep but within the hours of the sleep-in shift’ (paragraph 44).

In its first report, the LPC ‘plainly did not consider that a sleep-in worker who was sleeping could be said to be working’. The view was shared by the draftsman of the 1999 Regulations ‘at least as originally enacted’ and by the draftsman of the Regulations. She made further points about the interpretation of the relevant provisions in paragraphs 47 and 48. Her view was supported by extracts from the LPC’s second report. The LPC did not consider it necessary to make any recommendation that the 1999 Regulations should be changed to meet a potential for abuse which it had identified, and considered that it could be dealt with in appropriate guidance. It again called for guidance in its fourth report (paragraph 50).

Lady Arden said in paragraph 61 that it was important for ETs to ‘appreciate the range of distinctions which fall to be made and make appropriate findings. The function of making these distinctions has been left to’ [ETs]. The LPC’s fourth report ‘explains that arrangements can vary considerably on their facts and that it would have been difficult for the regulations to capture the diversity of individual cases’.

She recorded a submission for the first claimant that a sequential approach should be taken, by deciding first whether the first claimant was doing ‘work’ or whether she was simply available for work. The contention was that on the ET’s findings of fact, she was working and not simply available for work for the purposes of regulation 32. In paragraph 66, Lady Arden gave two reasons why she rejected it. First, ‘That process would considerably reduce the sphere of operation of the sleep-in provision, contrary to the apparent intention of the LPC’. Second, the regulations did not provide for the position to change according to the frequency of any calls.

In paragraph 70 she rejected an argument that having a ‘listening ear’ entailed the conclusion that the first claimant was ‘working for NMW purposes. A worker must travel from home to the employer’s place of business, but it does not automatically follow that that travelling time falls within the calculation of hours for the purposes of the NMW’. There was ‘no call’, further, to reinstate the ‘multifactorial test adumbrated’ by the EAT. It would ‘introduce a considerable amount of uncertainty into the NMW rights of the sleep-in worker’. That would be in no-one’s interests (paragraph 71).