Court of Appeal outcome on sleep-ins
What is the outcome of the Court of Appeal judgement?
The judgement states very clearly that the National Minimum Wage (NMW) does not apply to sleep-in shifts unless the worker is awake for the purpose of working.
The Lord Justices' key words on this are:
For the reasons which I have given I believe that sleepers-in, in the sense explained at para. 6 above, are to be characterised for the purpose of the Regulations as available for work, within the meaning of regulation 32, rather than actually working, within the meaning of regulation 30, and so fall within the terms of the sleep-in exception in regulation 32 (2); and we are not bound by authority to come to any different conclusion. The result is that the only time that counts for NWM purposes is time when the worker is required to be awake for the purposes of working.
23 August 2018
Derek Lewis, Chair of Royal Mencap Society:
Royal Mencap Society has lodged an Objection to the Application to the Supreme Court to appeal the Court of Appeal’s judgement on sleeping-in. We regret having had to take this step, just as we regretted having to go to the Court of Appeal in the first place. While the issues and history of this matter are complex our position is very clear:
- We believe that time spent ‘sleeping-in’ by our colleagues and care workers in other organisation should be covered by the Minimum Wage regulations. We are now paying all our colleagues on this basis and were among the first providers to do so, despite the fact that not all local authorities have committed to provide the corresponding additional funding.
- We have asked Government to change the regulations going forwards to make this clear and to require local authorities to fund it, supported by the necessary funding from central Government
- Nevertheless the original intention of the Minimum Wage legislation had been that sleep-ins should be excluded from the Minimum Wage. Government guidance had consistently confirmed this and providers have operated on that basis. Different interpretations from some tribunal cases would have triggered a provision in the legislation designed to punish rogue employers by requiring six years of back pay. This would have created a £400m bill for the sector and nearly £20m for Mencap, resulting in bankruptcies among providers, the disruption of care for people with learning disabilities, uncertainty and job losses for care workers, and reduced investment in improved pay and care. Because there has been no commitment from Government to fund such back pay we had no choice but to appeal these tribunal decisions to avoid the mayhem that would otherwise have ensued.
- We regret Unison’s decision to apply to appeal to the Supreme Court and have had no choice but to object for the same reasons that we appealed to the Supreme Court in the first place. We are very sorry that some colleagues may have been given expectations of a retrospective payment and that there is continuing uncertainty for people with a learning disability, carers and families.
13 July 2018
Derek Lewis, Chair, Royal Mencap Society said:
“The Court of Appeal has today handed down its judgement in two cases, one of which involves Royal Mencap. These are representative of many similar cases in the care sector. The Court’s decision has removed the uncertainty about how the law on the National Living Wage applies to sleep-ins. 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.
“What is clear though, is that dedicated care workers deserve a better deal. They work hard and support some of the most vulnerable people in society, but many are among the lowest paid. We and many other providers have been paying for sleep-ins at a higher rate for over a year now, and we intend to continue despite the Court’s decision. We now call on Government to fulfil its responsibilities by legislating so that all carers are entitled to this, and their employers are funded accordingly. We also call on Government to ensure that the social care sector and, in particular, the specialised support that is required for people with a learning disability is properly funded and its workers are paid what they deserve in the future.”
Frequently asked questions (FAQ)
We've tried to answer some questions to provide clarity around sleep-ins and the Court of Appeal outcome.
Click each question below to reveal the answer.
What is a 'sleep-in'?
A 'sleep-in' is where a care worker sleeps in the home of someone they support so that they are on hand in case of an emergency or any other problem in the night.
What's the problem?
When the National Minimum Wage (NMW) was introduced back in 1999, the Low Pay Commission advice and the regulations said that ‘sleep-ins’ do not count as ‘work-time’ for the purposes of the new law because people were asleep and not working. Instead care workers were paid a flat rate ‘on-call’ allowance which had been the norm across the sector for decades.
There have been a number of tribunal cases which have challenged this, and in October 2016, Government (BEIS) issued new guidance saying that time spent asleep did in fact qualify for NMW payments. This was followed by aggressive HMRC enforcement action demanding care providers paid six years back pay. This is estimated to cost at least £400 million across the sector.
This was followed by HMRC enforcement action demanding care providers paid six years back pay, which was estimated to cost the care sector £400 million.
Paying six years’ back pay for sleep-ins at an hourly National Minimum Wage rate would mean the sector was faced with a real and potentially overwhelming funding crisis. This would have affected the wellbeing of hundreds of thousands of disabled people who rely on the personal support provided by organisations like Mencap to be able to live an independent life. This would also affect all care providers and local authorities that commission care services, and result in an increase in the cost of the care. Already chronically-underfunded care providers and local authorities would have had to find additional money that simply isn’t there currently.
Although the guidance changed in 2016, the legislation did not change and most Local Authorities were still paying providers only the flat rate for sleep-ins. This is why we brought our case to the Court of Appeal – to get clarity between the legislation and the guidance.
Since April 2017, we have ensured that all our support workers carrying out sleep-ins are paid in line with the National Living Wage requirements and despite this ruling, we plan to continue this payment.
Why did you end up in court?
Unison originally took us to court and then we appealed against the verdict at the Court of Appeal, which was heard in March earlier this year. We did not want to do this, but we could not afford to pay the back pay liability.
A charity and a union shouldn’t have had to resort to this - the Government failed to take any action on this critical funding issue and provide clarity on a changed interpretation of the law.
Why don't you use your reserves to pay the sleep-ins back pay bill?
Our reserves are mainly property assets including housing for people with a learning disability across the country.
Would the Government have bailed you out of the back pay bill?
We certainly asked them to, and if Government had said that they would be prepared to fund the back pay, we would have halted the court action immediately.
Do you not want support workers to be better paid?
Of course we do. To be really clear, we have been paying for sleep-ins for Mencap support workers at a higher rate since last April and have no plans to stop.
We did not want to go to court about back pay but we had no choice – we simply could not afford it and the law was so unclear. We are hugely proud of the outstanding work that our colleagues in the social care sector do and we recognise that they are some of the lowest paid in our society. They deserve to be paid more, but for that to happen, the Government needs to put more funding into social care – paying the sleep-in back pay is not a long term solution.
Why did you sign up to the Social Care Compliance Scheme (SCCS) and will you stay in it?
In November 2017 the Government announced a new compliance scheme – the Social Care Compliance Scheme (SCCS) - to work with care providers to establish the cost of sleep-in back pay liabilities. We reluctantly joined the scheme, otherwise, we would be liable for fines.
We’ll need to see what the Government’s next steps are before we can answer whether we will stay in it, although there doesn’t seem to be much point to the scheme now.
Hasn’t the Government just injected £2 billion into social care and another £150 million?
The £2 billion was to bolster the whole social care system to cope with an increase in people needing elderly care. The £150 million was specifically for rural areas where social care is more expensive.
It’s worth noting too that elderly people often have assets and saving and are more able to pay for care privately. People with severe learning disabilities often rely on the state; statistically, families with disabled children are more likely to be in poverty.
We are also calling on Government to ensure that social care is properly funded – and that means that care workers are properly paid.
What does this mean for the six years’ back pay?
This means that no back pay for sleep-in shifts is owed.
Are you paying the National Living Wage (NLW) for sleep-ins now?
We are paying according to the most recent Government guidance and we’re going to continue even though we are not legally obliged to pay it now.
We would like the Government to legislate so that all care workers are entitled to this and so that Local Authorities cannot refuse to pay.
Will this mean that Local Authorities stop funding sleeps-ins at the higher rate?
We hope not – and this is why we want Government to legislate about this.
Information for support workers
The following information is for support workers who are looking to find out more information about the Court of Appeal outcome.
Click each question below to reveal the answer.
I am a Mencap support worker and I have read the FAQs but I still have more questions, what should I do?
If you have questions about your personal situation or further questions on sleep-ins, you can either approach your line manager or use Yammer to contact teams directly.
You can also e-mail any queries to email@example.com and someone will get back to you.