The long awaited and anticipated National Minimum Wage (NMW), decision of the Supreme Court announced on 19 March 2021 must be a huge relief to some employers, especially those in the residential care sector. The Court decided NMW is only payable to workers on sleep-in shifts in respect of  the time the worker spends awake carrying out duties. The employer does not have to pay them for any time spent sleeping-in, on call but not working. There had been doubt over this for some years, with the law seeming to favour a right of employees to be paid all the time they were available, whether they were working or not.

The leading judgment drew a distinction between those who were “working” and those who were “available for work”. It establishes that the NMW is only payable to employees for time spent working and not if they are merely available for work.  When the only duty of the sleeping worker is to respond to emergency calls, the time during which they must be paid is limited to that when they are actually answering a call. It will be necessary for employers to continue to keep careful records of night-time calls, in order to establish and prove what periods the worker must be paid for.

The decision is very significant for the costs of employers and many in relevant sectors had warned it would bankrupt them if the workers side won.  Not only would current wage costs have gone up a lot, but very large amounts of back pay would have been payable for the underpayment of the NMW over previous years. There were concerns that such a decision could lead to the collapse of many organisations in the care sector, a disaster for residents, jobs and the economy. Care workers and their unions will of course be disappointed that they are not entitled to the NMW in respect of the whole of a sleep-in shift, but on balance it seems that common sense has prevailed. It would after all be rather tough on those actually working if others were being paid to sleep.

For those of us who love sleep, it seems rather cruel that it does not matter how many times a person is called when on a shift; it is still only the time when they are responding to emergency calls that will count for the right to pay. A sleep-in worker who keeps being woken up, but only for short periods, may be somewhat aggrieved about this.

It may be that an employer will wish to offer pay anyway at a basic hourly rate or lump sum for a sleep-in shift, to recognise the worker’s willingness, presence and availability. However, the judgment means that the sleep-in money does not have to be as much per hour as the NMW, and the NMW only applies for the periods awake and working.

The Supreme Court is now the top court for employment law cases, so, unless and until Parliament changes the law, this decision is here to stay. That legal certainty will help employers to sleep better at night.  The case is called: Royal Mencap Society v Tomlinson-Blake and another. It applies the National Minimum Wage Regulations 2015: regulations 21 or 30 – which apply to ‘working’, and regulations 27 or 32 – ‘available for work.’  You can read more detail in the Judgement press summary here.

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