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Unmeasured work
[ch 4: pages 98-100]Workers who do “unmeasured work” must be paid the NMW for all the hours they spend during the pay reference period carrying out their contractual duties, unless there is a daily average agreement in place (regulation 49, NMWR 15).
A daily average agreement is a written agreement between worker and employer setting out the average daily number of hours the worker is likely to spend each day carrying out the contractual duties. It must be a realistic average and it must have been entered into before the relevant pay reference period.
The Court of Appeal upheld the use of a daily average agreement in the following case, which involved a care worker who performed a continuous 24-hour shift looking after one service user, but who was not required to perform tasks on a continuous basis:
Ms Walton was a carer who provided 24-hour cover for an epilepsy sufferer. She had a zero hours contract with no obligation on her employer to offer a minimum number of hours per week. Walton was obliged to be at the resident’s home for 24 hours, three days a week, and was paid just £31.40 a day. A complaint was made to HMRC for NMW non-payment, but before the NMW inspectorate carried out their inspection, the employer conducted an assessment of the hours worked by their care staff for each client and put in place daily average agreements for each one.
Walton signed a form agreeing that although she was required to remain at the client’s home for the whole 24-hours, she was only needed physically to carry out care tasks for an average of six hours and 50 minutes each day. As a result of the daily average agreement, Walton’s pay met the NMW threshold in place at the time, because only the hours in the daily average agreement counted for the purposes of the NMW.
Walton v Independent Living Organisation Ltd [2003] IRLR 469
A worker’s basic pay must comply with the NMW. That basic pay can then be used to produce an “enhanced” rate for different shifts, for example, “time-and-a-half”. However, the enhanced rate, for example, a “premium”, “overtime”, “anti-social hours” or “weekend” rate cannot be used as a basis for working out whether the NMW is being paid, even if the worker never receives only basic pay and always receives the enhanced rate (regulation 10(j), NMWR 15).
For example, in Hamilton House Medical Ltd v Hillier [2009] UKEAT/0246/09, Ms Hillier worked as a care worker. Her basic pay rate was below the NMW but she was paid “time-and-a-third” for weekday nights and “time-and-two-thirds” for weekend nights. As she almost always worked nights, her average hourly pay was above the NMW. Even so, as her basic rate of pay was below the NMW, the regulations had been breached.
Any attempt to contract out of the NMW is void and has no legal effect (section 49, NMWA 98). This means that any contract term, for example, to repay training fees, is void to the extent that it reduces wages to below the level of the NMW.
Separate payments and allowances can only be added to remuneration to make up the NMW if they are “attributable to the performance of the worker in carrying out the work” (regulation 10(k), NMWR 15). In Aviation & Airport Services Ltd v Bellfield [2000] UKEAT/194/00, an employer who unilaterally consolidated a contractual attendance allowance into basic pay to comply with the NMW carried out an unlawful deduction of wages and breached the NMW regulations.