The Supreme Court will today reignite a three-year battle about whether care workers are entitled to receive the national minimum wage for sleep-in shifts.
The ruling, expected within a few months, could see care providers forced to pay an estimated £400 million in arrears allegedly owed to care workers deemed to be underpaid for overnight shifts.
In 2018, the Court of Appeal overturned the decision of a 2016 employment tribunal and a 2017 employment appeal tribunal, which found that learning disabilities charity Mencap should have paid carer, Clare Tomlinson-Blake, the full minimum wage during sleep-in shifts.
Tomlinson-Blake and other carers provided 24-hour support to two men in their own home. She worked either a day shift or a sleep-in shift.
Sleep-in shifts lasted nine hours and she received a flat rate of £29.05 for this. Tomlinson-Blake had her own room and could sleep during the shift, but was required to keep “a listening ear out” during the night and provide support where needed and to respond to any emergencies.
The need was “real but infrequent” and Tomlinson-Blake had to intervene on six occasions during the previous 16 months.
The employee argued she should receive the minimum wage for every hour of her sleep-in shift.
However, the Court of Appeal found employees who stay at a vulnerable person’s house overnight are only entitled to the national minimum wage while they are carrying out their duties, not for the full duration of their sleep-in shift.
The judgment said that workers were either available for work or actually working.
But in August 2018, trade union Unison applied to appeal the Court of Appeal’s decision, and the Supreme Court has now allowed that appeal to go ahead.
The impact of the ruling could be significant, with care charities estimating a sector-wide liability of £400m if all time spent during sleep-ins is found to be working time.
Mencap has also stated that it has a £20m back pay liability and is at risk of insolvency if required to pay it.
Matthew Wort, who helped Care England in its intervention on the Mencap vs Tomlinson-Blake case at the Court of Appeal, argues that if the Supreme Court decides that the law does require national minimum wage payment for care workers while sleep, the HMRC must establish a new social care compliance scheme.
The partner at Anthony Collins Solicitors said: “This would allow care providers time to calculate any potential back-pay liability and waiving any penalties that might otherwise be due. It would be unjust for care providers to be penalised in circumstances when their pay practice reflected BEIS and HMRC guidance.
“I also consider that the Government should act to ensure commissioners that have paid care providers to ensure a 24-hour service presence at a rate less than national minimum wage accept their role in the situation. Care providers should be compensated for the shortfall in funding to cover any historic liabilities which may be created by the Supreme Court judgement.”
Paul Kelly, head of Employment at Blacks Solicitors said: “The outcome of the Supreme Court case will finally give the care sector certainty over this contentious issue as both employers and employees will finally know where they stand on the issue of payment for sleep in shifts.
“However, if the Court does reverse the decision of the Court of Appeal then we will enter a new period of uncertainty given the substantial liabilities employers will face dealing with claims for back pay. In a sector that traditionally operates on low margins with high levels of staff turnover, many will no doubt find the financial and administrative burdens crippling.”
Philip Richardson, head of employment law at Stephensons Solicitors, said: “This legal action is significant and its journey through the Supreme Court will be watched closely by both front-line care workers and their employers.
“Not only does it underline issues of fair pay and remuneration for care staff, it also raises some serious questions and concerns from care providers who, as a result of the Supreme Court’s ruling, may be exposed to a huge number of claims for back pay. This bill could stretch well into the millions of pounds and put many organisations with already stretched financial resources under substantial pressure.”
The Supreme Court hearing is expected to last until tomorrow.
Click here to read more details about the case.