Care providers up and down the country breathed a huge sigh of relief last Friday when the Supreme Court handed down the final judgment in the long-running saga that is the Mencap sleep-ins case. This case brings to an end a legal issue that has been running for nearly ten years and one that could have resulted in providers having to fork out over £500m in back pay to staff.
Many of you will have attended my previous seminars on this issue over the last 3-4 years and (hopefully) got to grips with the issues at hand and gained an insight into just what was at stake.
What did the Supreme Court decide?
The Supreme Court had to determine whether sleep-in workers should be paid the National Minimum Wage (NMW) for every hour of their shift, even if asleep / not doing any work, or only when awake for the purposes of working.
To the relief of providers, the Supreme Court definitively ruled in their favour, holding that only time spent awake and working during a sleep-ins shift counts for the purposes of the NMW. This judgment, therefore, decided that several previous cases had got the law wrong.
In reaching this decision, the Supreme Court relied upon the NMW Regulations of 2015, which included a specific carve-out in respect of sleep-in shifts, stating that only hours where a sleep-in worker is awake for the purposes of working counts towards NMW.
By way of background, all employers in the UK are legally required to pay their workers the appropriate NMW or National Living Wage (‘NLW’). Not every hour has to be paid at those rates, so long as the average hourly rate across their pay period (weekly if paid weekly; monthly if paid monthly) is at or above NMW/NLW.
Providers should be aware that the rates of NMW and NLW will change with effect from 1st April 2021, with NLW now having to be paid to those 23 and over. Currently, NLW is only payable for workers who are 25 and over.
Does this decision affect live-in care?
No, not if the appropriate arrangements are already or will be put into place.
Live-in care constitutes ‘unmeasured work’ and I have previously advised several providers on the benefits of having ‘Daily Average Agreements’ in place, drafting the same on their behalf. Ensuring that these agreements are in place is key to protecting your business from tribunal claims later down the line.
So what does the future look like?
Where you engage someone on a sleep-in shift and provide facilities for them to sleep, you are only required to pay them at the relevant NMW/NLW rates for hours when they are awake for the purposes of working. Hours spent reading, texting, or surfing the internet are not payable.
Many providers already pay over and above the rates that would be strictly payable in light of this decision and you remain free to agree a different rate of pay with staff for any time they are not working. Now is a great time to look at what you are paying and whether this can be maintained going forward.
All providers undertaking sleep-in shifts funded by the local authority should take steps to contact them and obtain assurances that funding will remain unchanged. Providers should also be warned that a possible indirect consequence of the Supreme Court decision is that pressure will mount on the government to bring in protections for low-paid sleep-in staff. Indeed, one possibility could be the introduction of a special NMW rate for sleep-ins, as has previously been suggested.
Where can I get more advice on this subject or any other Employment Law/HR issues?
Lloyd Clarke is a Partner of Attwells Solicitors LLP and heads up our Employment Law Department. Lloyd already has a number of ECA members as clients, regularly providing them with legal advice on those issues affecting the care sector. Lloyd operates flexible funding arrangements, including popular retainer packages, fixed fees, and reduced hourly rates.
At Attwells we are a long-standing commercial partner of ECA and offer exclusive discounts to ECA members. Lloyd also regularly delivers workshops and talks to ECA members. Lloyd also works closely with Age UK, with Attwells enjoying ‘Platinum Friend’ status in recognition of their work with the charity.
If you have any queries regarding the Supreme Court decision or any other employment law or HR issues, contact Lloyd Clarke on 01206 239761 for a free consultation.