Appeal No. UKEAT/0102/11/CEA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 14 July 2011

Before
THE HONOURABLE MR JUSTICE UNDERHILL (PRESIDENT)
MRS R CHAPMAN
DR K MOHANTY JP

MS S WRAY	APPELLANT

JW LEES & CO (BREWERS) LTD	RESPONDENTS

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR JOHN HOBSON
(of Counsel)
Instructed by:
Oldham Law Centre
1st Floor
Archway House
Bridge Street
Oldham
OL1 1ED
	
For the Respondents	MR P MOONEY
(Solicitor)
Employment Law Advisory Services Ltd
Charles House
Albert Street
Eccles
M30 0PW

SUMMARY
NATIONAL MINIMUM WAGE

Temporary pub manager required to sleep on premises – Claim that hours in question should be taken into account in assessing whether she had been paid the national minimum wage – Tribunal, approaching the issue by reference to the definition of “working time” in Working Time Regulations 1998, held that they should not.

Held, dismissing appeal:

(1)	The Tribunal had been wrong to refer to the Working Time Regulations.  The issue should have been determined exclusively by reference to the relevant provisions of the National Minimum Wage Regulations 1999.

But:

(2)	On the Tribunal’s findings of fact it was clear that the Claimant was not working during the periods in question; and that, even if she fell within the terms of reg. 15 (1) or 16 (1) of the Regulations on the basis that she was required to sleep at the premises in order to be available for work, the case fell within the exception provided by reg. 15 (1A) or 16 (1A) - Burrow Down Support Services Ltd v Rossiter [2008] ICR 1172 and South Manchester Abbeyfield v Hopkins [2011] ICR 254 considered.

THE HONOURABLE MR JUSTICE UNDERHILL (PRESIDENT)

1.	The Respondents own over 170 pubs, mostly tenanted.  There are often vacancies between when one tenant leaves and a successor comes in.  During those intervals they put in a temporary manager.  Following her original engagement in December 2005, the Appellant worked for the Respondents as temporary manager of a series of pubs.  From October 2008 she was temporary manager of the White Hart in Mottram.  The Respondents also employed her partner, a Mr Hansford, as a part-time assistant.  She was provided with free accommodation at the pub and it was a term of her employment that she sleep there each night: we will return to this aspect presently.

2.	On 13 May 2009 both the Appellant and Mr Hansford were dismissed for redundancy.  They brought proceedings in the Employment Tribunal claiming unfair dismissal and, in the Appellant’s case, failure to pay the national minimum wage.  Their claims were heard in Manchester before a Tribunal chaired by Employment Judge Feeney on 14 and 15 October 2010.  By a Judgment and Reasons sent to the parties on 15 December, their claims were dismissed.

3.	The Appellant has appealed only against the decision as regards non‑payment of the national minimum wage.  She has been represented before us by Mr John Hobson of counsel, to whom we are grateful for his submissions.  He did not appear below, where the Appellant was represented by a solicitor from the Law Centre which was assisting her with her case.  The Respondents were represented both before the Tribunal and before us by Mr Mooney, a solicitor.  We have not in the event found it necessary to call on him, though he has usefully elucidated one or two points about how matters were dealt with in the Tribunal.  Mr Hansford has not appealed.

4.	The national minimum wage claim arises as follows.  The evidence before the Tribunal, which was not in dispute, was that the Appellant was paid £325 per week gross during the period that she was at the White Hart; at the pubs at which she had worked earlier she was apparently paid £300 per week.  It was the Respondents’ case before the Tribunal that at the White Hart she worked 42½ hours per week, being the actual hours that the pub was open.  (Although we are told by Mr Hobson that formally the Appellant’s national minimum wage claims covered the entire period of her employment back to 2005, the Tribunal was provided with no evidence of her working hours at any pub except the White Hart, and in practice, on the evidence which it heard, we do not see how it could have entertained a claim in relation to any earlier period since it did not have evidence of one of the essential factors in the equation.)  So far as the period of working at the White Hart was concerned, the hours which the Respondents claimed that she worked would have produced an hourly rate of £7.65, comfortably above the minimum wage, which was £5.73 from 1 October 2008.  (We should note in passing that the Tribunal in its Reasons adopts the wrong rate, £5.80: we were told by Mr Mooney that that figure was supplied by the Appellant’s solicitor and not checked either by him or by the Tribunal.)  The Appellant, however, claimed that there had to be brought into account as part of the divisor (a) many more hours which she said that she spent working outside the actual opening hours of the pub, plus (b) the hours when she was required to be at the pub overnight.  Whether (a) alone would bring the rate below the minimum wage would depend on the precise number of hours in question; but (b) would certainly do so.

5.	The Tribunal, after hearing evidence from both parties, found that the Appellant in fact worked a further 14 hours a week over and above the hours that the pub was open - that is, a total of 56½ hours.  On the basis of a weekly wage of £325 that would produce an hourly rate of just over £5.75 – just above the minimum wage.  In fact, in the “Conclusion” section of its Reasons the Tribunal takes a weekly wage of not £325 but £356.22, which would yield an hourly rate of £6.30.  Unhelpfully, that is unexplained; but the Respondents in their Answer on this appeal say that it represents the “accommodation offset” - that is, the additional amount falling to be added to remuneration pursuant to regulations 30D and 36 of the National Minimum Wage Regulations 1999 (“the NMWR”).  Mr Hobson has accepted that that is so, and he accepts that in the light of that, and indeed the error as to the rate of the national minimum wage, the part of the Tribunal’s reasoning relating to “element (a)” cannot be challenged.  Thus the only live question on this appeal is whether the time spent by the Appellant in the premises overnight falls to be taken into account.  We have not seen any attempt to quantify the number of hours in question; and in the light of the evidence to which we will refer shortly and the Tribunal’s findings of fact it might have been difficult for the Appellant to identify a particular number of hours for which she was required to be on the premises; but for reasons which will appear we need not consider this aspect further.

6.	The issue as to whether the hours spent on the premises overnight fall to be taken into account must of course depend on the relevant provisions of the NMWR.  Most unfortunately, however, the Tribunal in its Reasons makes no reference to those provisions, or indeed to the NMWR at all.  Indeed, in the section in which it directs itself as to the law it sets out the definition of working time from the Working Time Regulations 1998 (“the WTR”), which is in different terms to the NMWR and has no application in the context of a national minimum wage claim.  It also referred to various cases decided under the WTR.  We are told by Mr Mooney that the Appellant’s solicitor in his submissions to the Tribunal had formulated the claim entirely by reference to the WTR and that neither he nor the Tribunal questioned this fundamental error.  That is most regrettable.  However, when I gave directions on the sift I made it clear that the Tribunal at the full hearing would wish to avoid the cost and delay occasioned by a remittal and to decide the issue on the basis of the provisions of the NMWR if the Tribunal’s findings of fact allowed it to do so.

7.	We accordingly turn to consider the relevant provisions of the NMWR.  These can be summarised for present purposes as follows:  

(1)	Whether an employee has been paid the national minimum wage is ascertained by dividing his/her total remuneration as defined in the NMWR for the pay reference period by the total hours worked in that period.  The pay reference period is one month, but since there are, so far as we are aware, no variations in the hours worked or pay received within each month it makes no difference, and is simpler in view of the form in which the figures are available, to work by reference to a week.

(2)	There is no definition in the NMWR 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.  It may be debatable whether, if the Appellant’s time spent overnight at the pub is work at all within the meaning of the Regulations, it would constitute time work or salaried hours work.  Mr Hobson submitted that it was the latter; and we will for convenience proceed on that basis, though in fact nothing turns on the categorisation for the purpose of the issues before us.

(3)	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 is the relevant provision in the present case.  We should set out in particular paragraphs (1) and (1A).  They read as follows:

“(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.”

There are equivalent provisions in regulation 15 as regards time work (which is why it does not matter which category of work the hours in question would fall into – if they are work at all).

8.	The Appellant’s case before us is that she was required to be, and was, available every night at her place of work, namely the White Hart, for the purpose of doing salaried hours work. The Respondents’ case is succinctly put at paragraph 13 of Mr Mooney’s skeleton argument as follows:

“There is nothing in the Appellant’s terms and conditions of employment that oblige her to work once she has completed her duties.  The accommodation provided is her home.  It cannot be compared with accommodation provided for sleeping over or on call purposes.  She is not required to undertake any duties for the Respondent whatsoever until the pub reopens the following day.”

9.	The Tribunal’s relevant factual findings are at paragraph 13 of the Reasons.  It found:

“[…] The Claimant was required to sleep on the premises even though she did have a house of her own.  This was a minimum security measure or preventative measure.  There was no guest accommodation at the pub so no work, once the pub was closed, was actually required.  The Claimant was not prevented from doing jobs apart from the gents after it had closed until she went to bed.”

In the “Conclusions” section it said this:

“We do not find that this case is on all fours to the cases cited to us in respect of on call work and find that Ms Wray’s night work is not working time in this case because:
(i) the claimant was not at the employer’s disposal during the night.
(ii) that the pub was shut and there were no ongoing responsibilities as there were in for e.g. a care home during the night however or in a hotel where there might be infrequently they may arise, the fact is they might have done whereas there was no work of that nature at all here.
(iii) the only matter the claimant would have had to attend to is if someone broke into the premises but she was not required to do any work simply to do whatever she would have done had she been staying with a friend, on holiday, at home, etc, which at most would have been to ring the Police.
(iv) the Claimant was not required to stay in every minute of the day and could pop out and there was nothing to say that this would be a disciplinary matter as occurred in other cases.
[…]”

(We have reproduced sub-para. (ii) precisely as it appears.  Not much care appears to have been taken with the detailed wording or the punctuation, and indeed in other parts of the Reasons there are some very striking typographical errors.  Nevertheless, the gist of the findings and reasoning adequately appears.  Some of the terminology adopted, in particular the reference to the Appellant not being “at the employer’s disposal”, is derived from the language from the WTR.)

10.	One area on which there are no explicit factual findings is the contractual basis of the requirement to which the Tribunal refers.  There was apparently before the Tribunal a document headed “Contract of Employment, incorporating Principal Statement of Terms and Conditions (Temporary General Managers)”, which it was the Respondents’ case had been supplied to the Appellant.  There was an issue about the status of this document.  The Appellant said that she had never received it.  The Respondents were unable to provide documentary proof that they had supplied it to her, and the copy before the Tribunal was a standard form rather than one which could be shown to have been issued to the Appellant.  The Tribunal makes no findings about this either way.  However, in a part of the Reasons dealing with a claim that no statutory statement of terms has been issued, it appears, at least by implication, to accept the Appellant’s evidence.  But, whatever the status of the document, it was an important part of the Appellant’s case that she was contractually required to reside on the premises; and, that being so, it is of interest to see what the document says about that - and indeed both parties refer to it in their respective skeleton arguments.  The relevant provisions are as follows:

“The Temporary General Manager/s Designated Premises Supervisor/s and family shall be allowed to occupy residential accommodation within the outlet free of rent and rates with the exception of Council Tax and shall be provided with heating and lighting free of cost.
Accommodation is regarded as a taxable benefit by the Inland Revenue and an adjustment for this benefit at the appropriate rate will be made to your remuneration […].
The Temporary General Manager/s Designated Premises Supervisor/s shall reside and sleep on the premises except on those occasions when the consent of the Area Manager has been obtained to his/her absence.”

It is worth noting that the obligation is put in very broad and unspecific terms, namely to “reside and sleep on the premises”.  It cannot be equated to an obligation to remain on the premises at all times, whether during the day or the night.  If the Appellant had wanted to take the dog out for a walk after the pub had closed but before going to bed, or had simply gone for a walk herself in the small hours because she could not get to sleep, it is hard to see that that would be a breach of the obligation there set out.  That approach is consistent with the Tribunal’s finding that the Claimant could “pop out”.

11.	There is now a fair amount of case law on whether “sleep-in” periods of one kind or another constitute work, whether time work or salaried hours work, for the purpose of the NMWR.  The authorities are helpfully reviewed in the recent decision of this Tribunal, HH Judge Reid QC presiding, in South Manchester Abbeyfield v Hopkins [2011] ICR 254.  There is no point in our performing the same exercise.  Judge Reid QC said at paragraph 38 of the Reasons, pages 264 - 265:

“We take the view that, for national minimum wage 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 night watchman), 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 Working Time Regulations 1998 into issue to assert that all the hours on‑call are working hours within the Regulations, 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 national minimum wage claim.  He can only do so (because of the terms of regulations 15(1A) and 16(1A) of the National Minimum Wage Regulations 1999) for such hours as he is awake for the purpose of working….”

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.  

13.	In the present case the position seems to us to be quite clear on the Tribunal’s findings and to be similar to that found in the South Manchester Abbeyfield case.  In our view it is evident that the requirement that the Appellant sleep on the premises did not require her to do any work during that period.  She was not in a position analogous to that of a night-watchman or a night-sleeper in a residential care home who has a responsibility throughout the night for those present in the home (or indeed to that of the hotel manager considered in Anderson v Jarvis Hotels Plc UKEATS/0062/05 - though this was not strictly speaking a national minimum wage claim).  She had no responsibilities of any kind.  On the evidence, she was not, as we have already said, in breach of her duties if she left the premises for periods during the evening or night, provided she slept there.  The purpose of the requirement was stated to be, as the Tribunal put it, “a minimum security measure or preventative measure”.  That no doubt in large part meant simply that the property was less likely to be burgled if it was evidently occupied, irrespective of whether anyone was there at a particular moment.  It is nevertheless true that if something untoward occurred at the premises, most obviously an attempted break-in or a fire, the Appellant would be expected to deal with it appropriately, most obviously by calling the emergency services.  But that very limited degree of responsibility is, as we have said, different from the responsibility falling on a manager in a hotel or a night-sleeper in a home for the disabled.  

14.	It is arguable, though this is not the Appellant’s primary case, that the residual obligation to take appropriate steps in an emergency brought the case within the terms of regulation 16 (1), on the basis that those steps would be “work”, for the purpose of doing which the Appellant was required to be available.  But even if that were correct, this would be a case falling within paragraph (1A), where the employee is required to be available for work but is not deemed to be working except when responding to the emergency because of the provision of sleep‑in facilities.  (It may be that the Respondents could also have taken advantage of the “at home” exception in paragraph (1) itself, but we are told that there was more evidence before the Tribunal than appears in the Reasons about the Appellant’s other property which is there mentioned, and we do not feel able on the material before us to say whether it is appropriate for the White Hart to be regarded in this context as her home.)  

15.	For those reasons, despite the self-misdirection by the Tribunal, we are able to be confident that it reached the right result on the evidence before it and its factual findings, and this appeal must be dismissed.