The Supreme Court has today ruled that sleep in shifts do not constitute working time for the purposes of the National Minimum Wage (NMW) unless staff are awake for the purposes of working, bringing to an end years of uncertainty for operators within the health and social care sector.
In summary the judgment has concluded the following:
- They gave weight to the Low Pay Commission (LPC) which recommended that sleep-in workers should receive an allowance and not the NMW unless they are awake for the purposes of working (which was repeated in later reports from the LPC).
- If the worker is permitted to sleep during the shift and is only required to respond to emergencies, the hours in question are not included in the NMW calculation for time worked or salaried hours worked unless the worker is awake for the purpose of working.
The ruling reconfirms the decision reached by the Court of Appeal in July 2018. Many operators have already adapted their approach to sleep-in payments on the assumption that sleep-ins could potentially constitute working time and hence have adopted averaging arrangements (or in some cases more fundamental changes to pay structures for such shifts). On this basis, the impact on profitability for operators is unlikely to fundamentally change (as we do not anticipate major reactionary changes to pay conditions for staff) as a result of the judgment.
It does however mean that the potential threat of substantial claims in relation to back pay for sleep in shifts has fallen away, which could have led to a significant number of business failures in the sector without Government intervention.
Commenting on the judgment, Richard Dade, Partner noted: "The Supreme Court judgment brings closure to a threat that has been looming over operators in the health and social care sector for many years. After an unprecedented 12 months for our clients operating in the sector, the certainty that there will be no exposure in relation to liabilities for back pay will bring a collective sigh of relief. We do hope, however, that improved Government funding will be forthcoming to enable operators to better meet the needs of service users whilst also being able to fairly remunerate care workers for the exceptional service they provide."
If you have any questions relating to anything discussed, please get in touch with one of the team below.