Social care providers have had a traumatic number of years as they try to deliver services against a backdrop of government funding cuts and an increasing wage bill.
The introduction of the National Living Wage for workers in April 2016 and annual rises in the National Minimum Wage (NMW) has hit care providers hard. The latest case of Royal Mencap Society v Tomlinson-Blake and another, provides some positive signs for social care providers.
The difficulty for care providers is that the nature of the services they provide requires workers to spend the night at or near their place of work on the basis they can sleep for all or most of the time but may be woken if required. This is referred to as a “sleep in” shift and there has been confusion over whether a worker is considered to be working and therefore entitled to payment.
Regulations 27 and 32 of the National Minimum Wage Regulations 2015 provide that workers may be treated as working (and therefore entitled to the NMW) if they are required to be available at or near a place of work for the purpose of doing work, unless they are at home. However, where workers are allowed to sleep at or near the place of work, and are provided with suitable facilities for sleeping, only time when they are awake for the purpose of working is treated as work.
In 2013, the government advised employers that ‘time when a worker can sleep is not working time for which you have to pay them National Minimum Wage’. By 2017, it had completely changed tack advising ‘employers must ascertain whether a worker is still subject to certain work-related responsibilities whilst asleep, to the extent that they could be deemed to be working’. So a worker who is asleep could still be deemed to be potentially working.
Failure to pay the correct rates can carry large penalties and criminal sanctions, as well as employment tribunal claims by the workers themselves.
Following this the government recognised the potential impact back pay claims could have on the social care sector and waived financial penalties for sleep-in shift underpayments arising before 26 July 2017 and temporarily suspended enforcement action. On 1 November 2017, HMRC launched the Social Care Compliance Scheme (SCCS), allowing employers up to a year to identify arrears and a further three months to make payments.
This indicated back payments should be made, but care providers were still guessing under what circumstances someone is working during a sleep-in situation.
As you can see the problem is confusing for any employer, particularly when social care providers are trying to run a 24/7 care service. It’s a problem that needs resolving quickly!
The judgement and what this means:
Social care providers therefore welcomed this month’s Court of Appeal decision in the case of Royal Mencap Society v Tomlinson-Blake and another. The claimants unsuccessfully argued that they were entitled to the NWM for the entirety of their sleep-in shift. Lord Justice Underhill rejected this and referred to the report of the Low Pay Commission. This recommended that workers who were ‘required to be on-call and sleep on their employer’s premises (e.g. in residential homes)’ should not have the hours in question counted for NMW purposes. This meant the claimants were only entitled to be paid for when they were awake.
Social care providers often provide a set rate for each sleep-in and then an additional payment of NMW for time actually worked. This judgement indicates that this arrangement is currently lawful. However, UNISON has sought leave to appeal to the Supreme Court so this may not be the last of the situation. One thing remains clear and that is care providers are still potentially in limbo until the Supreme Court have made a final decision on this matter.