Sleepover Court of Appeal decision published

The Court of Appeal has handed down its decision in the case of Idea Services Limited –v- Dickson. It’s an important case which has implications for all employers employing staff to sleep on call.

Mr Dickson works in a residential care home for disabled people. He occasionally has to sleep over and be available to deal with the many issues that arise at night in such a care facility. He is not permitted to lock the room in which he is sleeping, must remain in the home, can only have visitors with permission, must limit his activities and not consume alcohol. He could also be interrupted several times during the night.

Mr Dickson received more than the minimum wage for his day time hours but did not receive the minimum wage for the period in which he slept over, receiving instead a lump sum sleepover allowance, which worked out at much less than the hourly minimum wage. Mr Dickson argued he was entitled to the minimum wage for each hour of the sleepover.

The Court of Appeal has confirmed the previous findings of the Employment Relations Authority and the Employment Court that Mr Dickson’s duties during a sleepover constituted work for the purposes of the minimum wage legislation. Relevant factors in reaching this decision are:

1 the constraints placed on the freedom of the employee during a sleepover;

2 the nature and extent of his responsibilities during a sleepover; and

3 the benefit to the employer of having the employee perform the role.

Just because there were times when Mr Dickson did nothing did not mean he was not working, any more than a shop assistant is not working when he or she is not serving customers or doing other shop tasks.

The other finding of the Court of Appeal was that the employer is not permitted to average the wage received by Mr Dickson over a fortnightly period (which would work out at an hourly wage above the minimum wage) but that Mr Dickson had to receive the minimum wage for every hour worked. This conclusion is based on the wording of the Minimum Wage Act 1983, which makes no mention of averaging.

This case involves just one worker of course, but there are likely to be many hundreds of workers in similar positions who may now claim back pay. It has been estimated that this could cost around $500 million.

I predict a quick change to the legislation by government (which, however, reflects EU and UK law in this respect). However, government cannot make a retrospective change, disentitling workers to back pay, without creating a lot of controversy.