£400m sleep-in shift nightmare put to bed
Court of Appeal reverses £400m minimum wage back-pay bill to care providers
Flat rate of pay for sleep-in shifts deemed fair; only the hours spent awake counting as worked
Opportunity for short-term stability within the sector, amidst a projected £2bn funding gap
Mencap, as well as the intervening parties including Care England – the UK’s largest representative body for independent providers of adult social care – have today 13 July achieved a landmark ruling at the Court of Appeal, reversing the decision on sleep-in shift back-pay.
Represented by Anthony Collins Solicitors, the successful Care England intervention means the £400million allegedly owed to care workers who had been deemed to be underpaid for overnight shifts is no longer considered to be due under current legislation – a decision that could prove historic for a sector already at tipping point.
Relinquishing providers from the responsibility of paying the substantial arrears – a motion that would have caused over two-thirds to enter bankruptcy – will safeguard the care of 1.2million vulnerable people in the UK.
Commenting on the ruling, Matthew Wort, Partner at Anthony Collins Solicitors, said:
“The magnitude of this ruling should not be underestimated, particularly as the care sector is already forecast to face a £2billion funding gap by 2020.
“Challenging the original findings of Mencap vs Tomlinson-Blake EAT, our argument was clear: under the current National Minimum Wage rules those undertaking sleep-in shifts should not be considered as working whilst asleep.”
Care England intervened in the 2015 Mencap vs Tomlinson-Blake EAT case that found care providers such as the Royal Mencap Society liable to remunerate employees at the National Minimum Wage (NMW) for each hour of sleep-in-shifts completed, with back payments to cover the last six years. A recent sector survey indicated, however, that on average, only 1% of time in sleep-in-shifts is spent actually working.
Previous court decisions were a shift from the standard practice where workers receive a flat rate per sleep-in shift, with minimum wage awarded at any point in the night spent awake working.
The successful case put forward by Mencap and Care England relied on looking at the Low Pay Commission recommendations when the legislation was introduced calling for the initial rules on remuneration to be honoured and the care sector spared potential bankruptcy.
Matthew Wort added:
“A lack of clarity from Parliament, mixed with poor advice and an inconsistent approach from HMRC, has meant that this situation has spiralled out of control, putting the care sector in jeopardy.
“We have always taken the view that it was never the intention of Parliament that all hours of a sleep in should count for National Minimum Wage purposes – we made these submissions to the Government in 2014 as part of the Consultation on new National Minimum Wage Regulations and it is disappointing they didn’t act to clarify the situation then.
“Whilst the outcome is crucial in creating some stability in the short-term, there is work to be done at local and central government level. In order to deliver the best care, the UK system must balance the needs of both providers and workers, rewarding staff fairly for the work they do.
“Now, Government must update their guidance on how workers are to be paid for sleep-ins, while ensuring adequate funding is made available to safeguard the future of the sector and the people it cares for.”
This decision will result in further questions around the Government’s Social Care Compliance Scheme (SCCS) – a programme rolled out following the initial court decision, which asked care providers to calculate the total amount owed to both existing and previous staff in the form of sleep-in back-pay.
This ruling arrives against a backdrop of growing criticism around service quality and an estimated £2bn funding shortfall, and as Government with a New Minister responsible for Social Care prepares to deliver its social care green paper later in 2018, a long-term solution for the sector’s problems remains to be found.