A recent case has drawn media attention due to the finding by the Court of Appeal that a disability services worker, sleeping over at a community home, was entitled to receive at least the minimum wage whilst sleeping. Here’s an outline of the case – what do you think?
Mr Dickson worked for Idea Services Limited as a community service worker providing care and support to people with disabilities who live in community homes. A requirement of his position was that Mr Dickson sleep overnight in the home so that he could deal with any issues that arose during the night and for security purposes. He was paid $34.00 per sleepover, and $17.66 per hour for any time during which he was required to be actively working and tending to the needs of the residents. If there were no incidents during the night Mr Dickson would receive $34.00, which amounted to between $3.40 and $4.30 per hour depending on the length of the sleepover.
Mr Dickson claimed that he was entitled to the minimum wage prescribed under the Minimum Wage Act 1983 (“the Act”) for every hour of his sleepover. This claim was upheld at both the Employment Relations Authority and the Employment Court.
The Court of Appeal was required to consider whether sleepovers constitute “work” for the purposes of section six of the Act, which states:
“Every worker who belongs to a class of workers in respect of whom a minimum rate of wages has been prescribed under this Act, shall be entitled to receive from his employer payment for his work at not less than that minimum rate.”
The Court of Appeal agreed that three factors must be considered in order to determine whether the sleepover constituted “work”:
- the constraints placed on the employee’s freedom to do as he or she pleases;
- the nature and extent of responsibilities placed on the employee; and
- the benefit the employer receives from having the employee perform the role.
Mr Dickson had significant restraints placed on him when sleeping over, important responsibilities that he had to attend to with respect to both the home and the residents, and the employer derived a correspondingly significant benefit. The Court of Appeal therefore agreed that in this instance all of these factors applied to a significant degree and therefore Mr Dickson’s sleepovers constituted work for the purposes of the Act. Mr Dickson was therefore entitled to receive the minimum wage during his sleepover at the community home.
The Court of Appeal rejected Idea Services Limited’s alternative argument that the Act was breached only if the employee’s average rate of pay over a pay period was less than the prescribed minimum.
This decision will have a great impact on the disability services sector. Ralph Jones, Chief Executive of Idea Services Limited, is quoted as saying this decision would cost the organisation about $176 million in back payments. Idea Services Limited lodged an application for an appeal against the Court of Appeal decision, and the outcome is likely to be newsworthy.
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