Sleep-ins – Supreme Court judgment

The long and arduous legal process to determine what the National Minimum Wage (NMW) Regulations mean on the question of workers’ “sleep-in” pay is coming to an end; this Friday (19 March) at 9.45am the Supreme Court will deliver its final judgment. 

Some Supreme Court decisions land quietly, this one will not. If it decides that workers are entitled to NMW for the duration of a “sleep-in”, the financial impact on the health and social care sector will be extensive. This is especially so given the severity of the last twelve months amid the coronavirus pandemic. Conversely, should the Supreme Court rule that the Court of Appeal ruling still stands and entitlement to NMW is only for hours worked, there is much to be done by the Government on the funding front in the sector to ensure uniformity and fairness. 

Given our involvement with this case, we are holding a live webinar this Friday, 19 March, at 4pm; Matt Wort and Anna Dabek will be discussing the judgment, referencing the decision, and providing further guidance and comment in particular on what actions providers should be taking both internally and externally. For more details, please contact regena.hodgson@anthonycollins.com.

In addition to this webinar, we will produce lengthier explanations and commentary on the decision next week, but, as we await the judgment on Friday, it is useful to briefly highlight the practical implications of the decision, whichever way it falls. 

If the Supreme Court consider all hours of a sleep-in are working time for NMW purposes in all circumstances potential actions to consider include:

• Communicating the decision to your employees (if you have been updating them about the case as it has progressed through the courts) and indicating your plans moving forward;
• If you are not currently paying NMW for every hour of a sleep-in, changing your arrangements as soon as possible;
• For providers with Daily Average Agreements in place in respect of time spent asleep, taking legal advice as to how far the judgment will impact on those arrangements;
• It may be appropriate in some cases to convert sleep-in shifts to waking night shifts unless a distinction between the pay for a sleep-in and a waking night can be maintained;
• Contacting your commissioners requiring an increase in funding to cover any costs incurred arising from the judgment (referencing their obligations under the Care Act statutory guidance in respect of local authority commissioners);
• Identifying if there are particular contracts you will need to serve notice on if there is no change in approach from commissioners;
• Updating estimates of historic liabilities and liaising with your accountants in relation to the impact on the organisation and its future viability;
• For charities, considering whether a serious incident report is needed;
• Capturing all follow-up actions in a clear risk mitigation strategy; and
• For care sector umbrella bodies – concerted collective action to seek to ensure that wherever liability arises in respect of the delivery of a statutory service any provider who has followed Government guidance regarding sleep-in pay is fully funded. Including those in respect of any historic liabilities and the related administrative burden and action to ensure that all sleep-in related costs are covered moving forward.

If the Supreme Court consider only hours spent awake and working are working time for NMW purposes in all circumstances potential actions to consider include:

• Communicating the decision to your employees (if you have been updating them about the case as it has progressed through the courts) and indicating your plans moving forward.
• Assuming NMW is currently being paid for sleep-ins and this is being funded by commissioners, seeking assurance that funding will continue so that you do not have to change payment arrangements.
• Reviewing your sleep-ins to assess what payment arrangements you want to and are able to commit to going forward.
• For care sector umbrella bodies, concerted collective action to ensure a minimum rate for sleep-ins with appropriate funding to ensure its delivery.

Useful links

• If you would like to watch the judgment as it is announced, please click here at 9.45am on Friday 19 March. 
• Following the two-day hearing, earlier in February this year, Matt Wort wrote this ebriefing and his thoughts for the judgment. 
• For further comments in the Guardian on this point see Matt’s article here.

For more information

For further information in relation to any of the above, please contact your relevant ACS contact or Matt Wort.

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