The Employment Appeals Tribunal (EAT) found in favour of Edinburgh Council that residential sheltered housing wardens did not need to be paid National Minimum Wage (NMW) for the “on call” hours spent sleeping. This decision is important as it presents an opportunity to review employment contracts and to no longer pay tax on accommodation provided to wardens and caretakers.
Previously, a tribunal had held that the wardens were entitled to the NMW for all “on call” hours even though they were sleeping for part of them. In the Edinburgh case, the wardens worked a 36-hour, five-day week and were required to be “on call” outside of normal working hours between midnight and 8.30am. The wardens were provided with rent-free accommodation and entered into an occupancy agreement agreeing to be resident in the accommodation for four nights each week.
The wardens claimed that they were entitled to NMW for their “on call” hours.
The EAT held that the wardens were not expected or required to be awake unless called on to work during those “on call” hours, and were therefore not entitled to NMW. Confusion over what constitutes “on call” time for NMW purposes led many employers to remove the “on call” requirement in wardens’ and caretakers’ contracts. This in turn meant that a tax and NIC charge arose on accommodation provided, because HMRC stated that accommodation would only be exempt from tax if the employee was on call outside of normal working hours.
The decision in the Edinburgh Council tribunal is important as it allows employers to explore re-introducing the requirement to be “on call” during sleeping time, which should avoid the tax charge on accommodation.
The NMW requirements in relation to “on call” hours and sleeping time are complex.
We would encourage housing associations to seek advice if employment and occupancy agreements are being changed in response to the case.