Industry specialists have reacted to the recent Court of Appeal ruling that carers who have to sleep at their workplace in case they are needed overnight, will not be paid the National Minimum Wage unless they have to work during that time.
In a case against the Royal Mencap Society, care worker Claire Tomlinson-Blake, received a salary for her full-time job helping vulnerable adults living in their own homes, and sometimes had to work a sleep-in shift between 10pm and 7am. For those shifts she was paid an allowance of £29.05, which included pay for up to an hour of any work she was expected to perform during that time.
However, if she was woken in the night and had to work for more than an hour, she would receive extra pay for the time worked.
Tomlinson-Blake had taken Mencap to an Employment Tribunal in 2016 and successfully argued she should have been paid the full minimum wage for time she spent asleep at the house of someone she cared for.
In 2017, the decision was upheld by an Employment Appeal Tribunal and earlier this year, the case was heard by the Court of Appeal, alongside a second case, Rampersad v Shannon, which also refers to sleep-in work.
Last week three leading judges said carers were only entitled to minimum wage when they were required to be awake for work.
The cases have been closely monitored by the care home sector as the total bill for paying staff during the night could be as high as £400m.
Derek Lewis, Chair, Royal Mencap Society, said: “The prospect of having to make large unfunded back payments had threatened to bankrupt many providers, jeopardising the care of vulnerable people and the employment of their carers.
“Many hardworking care workers were given false expectations of an entitlement to back pay and they must be feeling very disappointed.
“We did not want to bring this case. We had to do so because of the mayhem throughout the sector that would have been caused by previous court decisions and Government enforcement action, including serious damage to Mencap’s work in supporting people with learning disabilities.”
Alan Lewis, an employment law partner at Irwin Mitchell said: “This is a significant judgment and unless successfully challenged it will save care homes thousands of pounds. The decision provides a clear dividing line between when workers are actually working and are entitled to paid at least the National Minimum Wage, and when they are only available for work and are not entitled to be paid.
“Essentially, workers who are required to sleep in at their clients premises, or remain at home on call will only be entitled to be paid if they are called on to perform work during those shifts.
“This is much more straightforward and the decision will be welcomed by care homes who have been subjected to changing and conflicting guidance from the government and HMRC. In 2017 many employers were encouraged to sign up to HMRCs Social Care Compliance scheme to declare how much they had underpaid staff for sleep in shifts in exchange for not receiving stiff penalties of up to £20,000 per worker or being publicly named for underpayment of National Minimum Wage. To be accepted onto the scheme, employers had to repay underpaid NMW to their workers and those that did so, are unlikely to be able to get that money back.”
Responding to the decision in the Mencap Court of Appeal case regarding the payment of sleep-in shift payments to carers, Cllr Izzi Seccombe, Chairman of the Local Government Association’s Community Wellbeing Board, said:
“This ruling will come as a relief to care providers and councils because it removes considerable uncertainty and a potential considerable unfunded burden on top of already significant financial pressures on the adult social care sector.
“We now need urgent clarity on all enforcement action for back payments when the National Minimum Wage wasn’t paid to ensure that no provider will face further action.
“As we said in our submission to the court, we strongly support care workers being paid a fair wage for their valued work, but if this appeal was upheld it would have increased the risk of a sinkhole in adult social care.
“However, today’s decision does little to ease the financial crisis facing social care. There is a £3.5 billion funding gap facing adult social care by 2025. This gap needs to be fully funded by government so that providers can plan with more confidence to ensure all people can receive reliable, high quality, personal care and support when and where they need it.”
Michael Hodges, Head of Healthcare Consultancy at Christie & Co welcomed the ruling, commenting, “This is an important judgment for the sector and specialist care providers, with many concerned over the potential for significant liabilities over historic sleep in shifts. These concerns have been magnified by the funding pressures experienced by the sector with our research over the last two years showing that average fee rate increases for specialist providers have been extremely weak. This ruling provides much needed clarity over onward and historic staff cost liabilities although funding and fee rate increases remain a key challenge.”
Ben Stepney, a Senior Associate in the Employment team at Thomson Snell & Passmore LLP, said: “This eagerly awaited judgment will met by the care sector with a huge sigh of relief. Mencap had estimated that the cost to the sector of the case going against them would have been in the hundreds of millions of pounds, putting many care providers at risk of going out of business. Care providers should now review how they remunerate those sleeping night shifts in light of this judgment.”
Harry Abrams, Solicitor at London law firm Seddons, comments: “Today’s ruling by the Court of Appeal, which overruled both the Employment Tribunal and the Employment Appeal Tribunal, confirms that there is in fact a clear distinction between being “available for work” and “working” in respects to sleep staff. This is a significant ruling as following the previous decisions in 2016, the Department for Business, Energy and Industrial Strategy changed the Government guidance to state that sleep-in carers must be paid NMW throughout their whole shift even when sleeping. This recent change, in most cases, doubled the cost to the care home of the overnight shift. However this ruling which restores the pre 2016 position, will be welcomed by the care home industry (many of whom were faced with bankruptcy if the rulings were not overturned). We now have confirmation that it is not sufficient for the worker to be at the care home and ready for work if needed but in fact they need to be awake and working (in the ordinary meaning of the word) to be entitled to NMW and for it to count as working time. Had the decision once again gone against Mencap, they, along with others, were faced with having to pay back pay for up to six years in breach of contract claims and/or up to two years’ back pay for unlawful deduction from wages claim for their current workers.”