No real winners in recent ruling over sleep-over pay

Charities and other employers should regularly review their practices, procedures and contracts in wake of Appeal Court case, warns Ben Doherty

Arecentcourtcasehasbeen described as a watershed for social care charities, freeing them from the threat of £400 million worth of legal claims.

But while social care employers are hugely relieved about the decision, their celebrations are muted, to say the least. There are no winners here, according to one chief executive in the charity sector.

The case concerns the issue of ‘sleep-overs’,andthepayofcareworkers who do sleep-in shifts (where they stay overnight in case they are needed to help out but are generally expected to get a good night’s sleep).

A number of previous Employment Tribunal cases and appeals had ruled that care workers were entitled to National Minimum Wage (NMW) for each hour of a sleep-in shift because, despite being asleep, they were doing “time work” and not just available for work.

Employers who had commonly paid staff a flat fee of £25-£30 for sleep-overs were facing thousands of back pay claims, and didn’t have the reserves or revenues to pay them.

But this month, the Court of Appeal reversed this position in respect of sleep-in workers who are expected to sleep, saying that they are available for working rather than actually working.

This means that only when such workers are required to be awake for the purposes of working are they eligible for NMW.

The ruling in Royal Mencap Society v Tomlinson-blake defuses the threat of the back pay claims by sleep-in workers, and removes an existential threat to providers’ financial sustainability and ability to support vulnerable service-users.

Why, then, aren’t the champagne corks popping in the social care sector?

Because as well as the legal liabilities, the sleep-overs issue involves questionsaroundgovernmentpolicy, public sector finances, the funding of social care, and, for employers, HR and employee relations.

In Scotland, the Scottish Government has previously committed the payment of Scottish Living Wage (ie, a higher rate than NMW) to workers in the social care sector. Following the earlier Employment Appeal Tribunal decision that sleep-overs were eligible for National Minimum Wage, the Scottish Government said this commitment covered all hours worked, including sleep-over hours.

It is yet to be seen whether further announcements from the Scottish Government will follow the Court of Appeal ruling, and what the ramifications of any announcement would be for social care providers, local authorities or other organisa- tions whose contract arrangements include sleep overs.

For example, if an organisation is no longer legally required to pay NMW or Living Wage for sleepovers, but is still contractually obliged to pay it, they may well have reason to fear whether their future commitments will be funded.

Another issue here is that many social care charities still want to pay NMW for sleep-overs. Following the Court of Appeal ruling, a coalition of care providers for people with learning disabilities, the #Solvesleepins Alliance, immediately called on the UK government to legislate for care workers to be entitled to NMW for all sleep-in shifts, and for the government to fund this and “ensure a fair deal for employees”.

And there’s also another major uncertainty – whether unions will decide to appeal this to the Supreme Court (and be given permission to do so).

A successful appeal could re-open the back pay liabilities, and while the UK or Scottish governments may fund future payment of NMW / Living Wage for sleep-overs, they’ve not made assurances about funding the back pay claims.

So, it’s understandable why the sleep-overs issue is still causing long faces, and, dare we say it, sleepless nights.

Even if a further appeal is ruled out and other uncertainties resolved, it’s essential that charities take on board the wider lesson of all this: that they operate in a context where the sands of law and policy are evershifting.

With employment law, this means charities (and other employers) should regularly review their practices, procedures and contracts. As well as ensuring they’re compliant with current law, they must horizon-scan for future liabilities, reputational risk or areas that might affect their ability to attract and retain good staff.

The contracts they negotiate should also allow them flexibility and resilience to navigate changes to their costs or obligations.

For now, the sleep-over decision has given huge relief to the social care sector, and also the people it cares for.

But risks remain, and vigilance is a better response than joy.

Ben Doherty, partner, head of employment, Lindsays