Appeal No. UKEAT/0050/15/LA

EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8AE

	At the Tribunal
	On 31 July 2015
	Judgment handed down on 24 September 2015

Before
HIS HONOUR JUDGE PETER CLARK
(SITTING ALONE)

MR J SHANNON	APPELLANT

MR J RAMPERSAD & MRS P RAMPERSAD
T/A CLIFTON HOUSE RESIDENTIAL HOME	RESPONDENTS

Transcript of Proceedings

JUDGMENT

APPEARANCES

For the Appellant	MR DAVID GRAY-JONES
(Solicitor Advocate)
Thomas Mansfield Solicitors Limited
Ground Floor
Esmerk House
40A Sydenham Road
Croydon
CR0 2EF

For the Respondents	MS KATHERINE REECE
(Consultant)
Peninsula Business Services Limited
The Peninsula
2 Cheetham Hill Road
Manchester
M3 5PB

SUMMARY
WORKING TIME REGULATIONS - Holiday pay
NATIONAL MINIMUM WAGE

An on-call night worker was not entitled to the National Minimum Wage for all hours of the night shift; only those when he was working.  Nor was he entitled to accrued holiday pay for earlier years when he was not prevented from but did not ask for leave.

The Claimant’s appeal is dismissed.

HIS HONOUR JUDGE PETER CLARK

Introduction
1.	This appeal raises two knotty areas of the law: the application of the National Minimum Wage (“NMW”) legislation to “on-call” workers and secondly, entitlement to accrued holiday pay following termination of employment under the Working Time Regulations 1998 (“WTR”).

2.	The parties in this matter before the London (South) Employment Tribunal were Mr Shannon (the Claimant) and Mr and Mrs Rampersad trading as Clifton House Residential Home (the Respondent).  I shall so describe them.

3.	The Judgment appealed by the Claimant is that of an Employment Tribunal chaired by Employment Judge Zuke promulgated with Reasons on 11 November 2014.  By that Judgment the Claimant’s complaints for arrears of pay under the National Minimum Wage Act 1998 (“NMWA”) and holiday pay under the WTR were dismissed as was a further complaint withdrawn by the Claimant.  His complaint of unfair dismissal was upheld.  I am concerned only with the NMW and holiday pay claims in this appeal.

The Material Facts
4.	Clifton House is a registered residential care home in Coulsdon, Surrey.  It provides for up to 16 elderly residents.  There is a top-floor staff flat known as “the Studio”.

5.	The Employment Tribunal found (paragraph 8):
“8. Registered homes are currently regulated and inspected by the Care Quality Commission.  The Commission does not prescribe a specific ratio of care staff to residents.  It is the care home provider’s responsibility to ensure that staffing levels are appropriate in order to meet the needs of the service users.”

6.	Before the Respondent took over the home in May 2013 it was owned by a Mr Sparshott.  The Claimant was a friend of his father-in-law, and in May 1993 Mr Sparshott offered the Claimant employment as a night worker with accommodation in the Studio.  The Claimant accepted that offer and commenced employment on the following terms.  As an “on-call night care assistant” he was required to be in the Studio from 10pm until 7am and was able to sleep during those hours.  However, he was required to respond to any request for assistance by the night care worker on duty at the home.  In return the Claimant was provided with free accommodation in the Studio with all utilities provided free of charge, together with a payment of £50 per week, rising eventually to £90 per week.  In practice he was very rarely asked to assist the night care worker (paragraph 11).

7.	In February 1996 the Claimant was married to an Argentinean woman.  Shortly thereafter he and his wife went to visit her family in Argentina.  Whilst away the Studio was used in his absence and his stereo system was broken.  He was most upset and as a result never slept away from the Studio again.

8.	During his employment with Mr Sparshott the Claimant had day jobs as a driver.  In those employments he received holiday pay.

9.	In contemplation of the Respondent’s acquisition of the home Mr Sparshott asked the Claimant to sign a contract of employment that included a wider range of duties than he had previously carried out; he was also required to provide cover for Abbey Lodge, a care home opposite Clifton House then owned by these Respondents.  In the event, he never did so.  He also signed a tenancy agreement, agreeing to pay rent of £120 per week for the Studio.  His weekly pay was increased from £90 to £210 per week to cover the rent.

10.	Relations with the new owners were far from happy.  The Claimant was dismissed on 9 October 2013; effective on 1 January 2014.

National Minimum Wage
11.	The claim was for £239,490, being the NMW from time to time since the NWMA came into force on 1 April 1999, applied to his full nightly on-call hours.

12.	The ET dealt with this claim at paragraphs 84 to 93.  The issue formulated by the ET (see paragraph 85) was whether the Claimant was entitled to be paid for the hours 10pm to 7am when he was required to be in the Studio, including time when he was asleep or only when he was awake and actually performing work assisting the night care worker on duty.

13.	It was common ground that the Claimant was engaged in salaried hours work, as defined in Regulation 4 of the National Minimum Wage Regulations 1999 (“NMWR”).  The ET found that the exception set out in Regulation 16(1) applied; his home, the Studio, was at his place of work and the time in question was spent at home so that Regulation 16(1A) applied; only time spent when the worker was awake for the purpose of working counted as salaried hours.

14.	Having been referred to the authorities mentioned at paragraph 89 the ET concluded that he was not working throughout each night shift; only on those rare occasions when he was called upon to do so by the night care worker on duty.  He was paid the NMW for those limited occasions, hence this claim failed.

Holiday Pay
15.	See paragraphs 70 to 83.

16.	It was common ground that the Claimant did not take holidays after the WTR came into force on 1 October 1998 (there is a misprint in paragraph 72: “1988” should read “1998”).  Could he carry forward his paid leave entitlement totalling some £15,000?  Having considered the decided cases, including my judgment in Canada Life v Gray [2004] ICR 673, on which Underhill P commented without enthusiasm in Fraser v South West London St George’s Mental Health Trust [2012] IRLR 100 and the Court of Appeal’s approach in NHS Leeds v Larner [2012] IRLR 825, the ET directed themselves that where a worker could have requested paid leave but chose not to he cannot carry forward his past entitlement to pay in lieu of holiday pay, taking advantage of the post-termination of employment provision in Regulation 13(9) WTR.

The Appeal
National Minimum Wage
17.	Mr Gray-Jones submits that the ET was wrong to hold that Regulation 16 NMWR applied to the Claimant’s salaried hours night work.  He argues that the ET failed to take into account the fact that the Claimant was required to be present in the Studio between the hours of 10pm and 7am each night.  He contends that the ET was wrong to find that the Claimant was not working throughout his shift when his presence was required for the Respondent to meet its statutory obligation to have adequate staffing levels in the home (Reasons, paragraph 8).  He further argues that the ET took into account irrelevant factors, namely the presence of another worker on the night shift, that the Claimant was content with his working arrangements and that the working arrangement was unusual.

18.	In considering this challenge I must turn first to the material wording of Regulation 16:
“16. Provisions in relation to salaried hours work
(1) Subject to paragraph (1A), time when a worker is available at 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 … except where -
(a) the worker’s home is at or near the place of 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.”

19.	Like the ET I have been referred to a number of authorities concerned with the application of Regulation 16 (or the equivalent Regulation 15 in the case of time work under Regulation 3).  However, before looking to see whether those cases (in a particularly fact-sensitive area) assist I shall first give my own interpretation of Regulation 16 and its application to the facts of this case.

20.	This Claimant fell within the first part of Regulation 16; he was available at his place of work, Clifton House, for the purpose of doing salaried hours work and was required to be available for such work and thus, prima facie, his working hours were those between 10pm and 7am on each night shift.  However, the exception applied to him; his home, the Studio, was at his place of work and he was entitled to spend the entire shift at home.  Accordingly Regulation 16(1A) is potentially engaged.

21.	Under Regulation 16(1A) the arrangement in force was that the Claimant was provided with suitable facilities for sleeping time (in the Studio, his home) during his shift because he was only required to respond to a call for assistance on the rare occasions he was called by the on duty night worker.  In these circumstances, it seems to me, on the plain wording of Regulation 16 only those times when he was awake for the purpose of working counted as working hours and his flat-rate pay (plus accommodation) meant that he was at all times in receipt of the NMW.  On that analysis I agree with the ET and the submissions of Ms Reece that this claim must fail.

22.	Do the decided cases cause me to reach a different conclusion?  They do not.  Looking first at the cases where it was held that the whole shift constituted working hours, I begin with British Nursing Association v Inland Revenue [2002] IRLR 480 CA.  There the British Nursing Association operated a booking service for bank nurses.  Duty nurses answered diverted telephone calls seeking nursing staff from home.  They were engaged in time work and thus the question was whether the Regulation 15 restriction applied; were they working throughout their shift or only when answering calls?  The ET held that they were available to answer calls throughout their shift and thus were working throughout.  The EAT ([2001] IRLR 659) declined to interfere with that decision, as did the Court of Appeal.  A similar result obtained in the case of a night watchman, who was permitted to sleep, watch television or read during his shift; his principal task being to respond if an alarm was set off at the premises he was guarding by an intruder (see Scottbridge Construction Ltd v Wright [2003] IRLR 21 CS).  Similarly, the worker provided with tied accommodation at her workplace who was required to be on site to answer calls throughout a 24-hour period, but could otherwise sleep or take recreation in her home (see MacCartney v Oversley House Management [2006] IRLR 515 EAT).
23.	Further examples on this side of the line are to be found in the EAT decision (Elias P presiding) in Burrow Down Support Services Ltd v Rossiter [2008] ICR 1172, the case of a night sleeper in a care home; and most recently in Esparon v Slavikovska [2014] IRLR 598 EAT.

24.	Conversely, in South Manchester Abbeyfield Society Ltd v Hopkins [2011] ICR 254 the EAT drew a distinction between cases where a worker was working merely by being present at the employer’s premises and those where the worker was provided with sleeping accommodation and was merely on call.  The Claimants in that case, a housekeeper and a deputy housekeeper at sheltered accommodation, fell into the latter category and were not entitled to be paid the NMW for the whole of their shifts.

25.	A similar result obtained in Wray v J W Lees & Co (Brewers) Ltd [2012] ICR 43 (Underhill P presiding, EAT).  That was a case of a temporary pub manager who was required to reside and sleep on the premises in accommodation provided free at the pub.  She was held only to be working for the purposes of Regulation 16(1) and (1A) when responding to an emergency.  See also the same outcome in City of Edinburgh Council v Lauder UKEATS/ 0048/11/BI, 20 March 2012, Lady Smith sitting alone in the EAT.

26.	In Whittlestone v BJP Home Support Ltd [2014] ICR 275 Langstaff P reviewed the earlier cases and concluded that a care worker employed to provide care services during sleepovers at clients’ homes, where she was provided with a bed and bedding, was entitled to the NMW for each shift between 11pm and 7am.

27.	I have considered these authorities out of deference to the sustained argument presented by Mr Gray-Jones.  It seems to me that the particular facts of this case reflect the approach of the EAT in Hopkins, Wray and Lauder.  The cases on the other side of the line may be distinguished on the basis that there the workers were working simply by being present; i.e. the night watchman in Scottbridge and the telephone operators in British Nursing Association v Inland Revenue.

28.	Further, I do not accept that the ET took into account irrelevant factors.  It was entitled to take into account the fact that there was a night worker on duty and that the Claimant was only rarely called on.  References to the Claimant being content with the arrangement and that arrangement being unusual were not relied on by the ET in reasoning this part of the claim at paragraphs 84 to 93 (see below).  As Mr Gray-Jones concedes, the ET directed themselves correctly as to the law.  In my judgment, they applied the law correctly to the facts found.  For completeness I agree with Ms Reece that this is not a case where the Claimant’s attendance for work throughout the night shift was necessary in order for the Respondent to comply with its statutory obligation.  As the ET made clear at paragraph 8, its obligation was to ensure that appropriate staffing levels were in place.  That obligation was met, according to the Care Quality Commission report to which Mr Gray-Jones referred me, by having a waking and sleeping-in member of staff (the Claimant) employed during the night.  That factor, which struck HHJ Serota QC and members in Esparon v Slavikovska, ought not to deflect the ET from applying the statutory provision.

29.	Separately, Mr Gray-Jones submits that the ET’s reasoning on the NMW claim was not “Meek-compliant”.  I disagree.  It seems to me that the ET have adequately explained why the parties won or lost on the NMW claim.  The mere fact that the Claimant was required to be present in the Studio throughout the night shift is not inconsistent with its conclusion; on the contrary, that was the ET’s factual finding (see paragraph 10).  However, mere presence does not of itself necessarily entitle a worker to the NMW for the whole shift; see Hopkins, Wray and Lauder.

30.	Finally, it is submitted that the ET’s conclusion on the NMW claim was legally perverse.  For the reasons given earlier I reject that submission.  It seems to me that the ET’s conclusion was a wholly permissible one, correctly applying the law to the primary facts found.

Holiday Pay
31.	The earlier cases on carrying forward untaken holiday pay until after termination of the employment under Regulation 13(9) WTR have been recently reviewed by Simler J in Sash Window Workshop Ltd v King [2015] IRLR 348.  I respectfully agree with her analysis.

32.	The question for the ET was whether the Claimant was unable or unwilling to take annual leave as it fell due for reasons beyond his control, for example due to sickness or (maternity) paternity leave or because the employer would not allow him to do so.

33.	In this case the ET found that the Claimant was aware of the right to holiday pay because he received it in his “day job” as a driver (see paragraph 19).  They rejected the Claimant’s evidence and that of his wife that he made no complaint because he was frightened of upsetting Mr Sparshott (paragraph 20).  It is in this context that the ET make reference to the Claimant being content with his unusual arrangement with Mr Sparshott (and not in connection with the NMW claim; see earlier).

34.	Although the ET did not have the benefit of the EAT judgment in Sash Windows, delivered shortly after judgment was delivered by the Zuke ET, I am satisfied that the ET correctly anticipated the guidance in that case.  It is clear from their reasoning at paragraphs 73 to 82, particularly paragraph 77, that the ET recognised that a request for leave is not necessary to carry forward the right to pay in lieu where a worker is prevented from taking leave, for example by ill-health (see NHS Leeds v Larner).  Thus had they accepted the Claimant’s evidence (see again paragraph 20) that he did not ask Mr Sparshott for annual leave because he was frightened of upsetting him then the result might well have been different.  But they did not.

35.	I do not read the ET reasoning as Mr Gray-Jones asked me to do.  First, I do not accept that the ET directed themselves that the right to carry forward holiday entitlement was limited to cases where the worker is on sick leave, following Larner.  That was an example of where holiday pay may accrue (paragraph 77).  Secondly, I am satisfied that the ET did address the question as to whether Mr Sparshott would have refused annual leave to the Claimant in their findings of fact at paragraph 20 and correctly concluded at paragraph 82 that the Claimant could have requested paid leave but chose not to do so.  He was, of course, paid for those notional leave weeks (see Sash Windows, paragraph 38).  In these circumstances, he lost the right to carry forward annual leave pay falling prior to the holiday year in which he was dismissed.  Quite simply, the facts do not support the proposition that the Claimant was unable or unwilling to take leave due to reasons beyond his control.

Disposal
36.	In these circumstances this appeal fails and is dismissed.