A tribunal ruling that social care staff should be paid the national living wage for sleep-in shifts, which would cost providers an estimated £400m, has been overturned by the Court of Appeal.
Mencap, supported by Care England, challenged a tribunal ruling in 2015 which left providers with a collective liability for pay backdated over six years, which raised fears the fragile care market could be pushed to the brink of collapse.
Anthony Collins Solicitors, which represented Care England in the case, said the substantial arrears would have caused more than two-thirds of the providers to enter bankruptcy and the ruling will safeguard the care of 1.2million vulnerable people in the UK.
Partner Matthew Wort said: ”The magnitude of this ruling should not be underestimated, particularly as the care sector is already forecast to face a £2billion funding gap by 2020.
”Challenging the original findings of Mencap vs Tomlinson-Blake EAT, our argument was clear: under the current national minimum Wage rules those undertaking sleep-in shifts should not be considered as working whilst asleep.”
However Unison, which was involved in the original tribunal, said the decision is wrong and “at odds with legal precedents and common sense understanding of what counts as work”.
The union added it is considering an appeal to the Supreme Court.
UNISON general secretary Dave Prentis said: “This judgment is a mistake, but let’s be clear where the fault lies. The blame for this sorry state of affairs that’s hitting some of the country’s lowest paid workers must be laid at the government’s door.
“Ministers are so consumed by Brexit that they’re ignoring huge problems around them. Social care is in crisis, and this situation wouldn’t have arisen if the government had put enough money into the system and enforced minimum wage laws properly.”
The court ruled that sleep-in shifts fall into an exception from the national minimum wage as staff are only available for work, according to Regulation 32.
This means the minimum wage would only be payable when the person was awake and working and not while asleep.
Care England, which represents independent social care providers, called on the government to provide further clarity on the obligations of employers’ registered on the social care compliance scheme.
Care England chief executive Martin Green said: “We welcome the Appeal Court ruling and hope we can now move forward, without a huge back pay liability hanging over the sector and threatening the ongoing care of thousands, to ensure we focus on getting social care services funded properly for the future.”
Chair of the Local Government’s Association’s community wellbeing board Izzi Seccombe (Con) said the ruling will come as a “relief” to providers and councils already under significant financial pressure.
She added: “We now need urgent clarity on all enforcement action for back payments when the national minimum wage wasn’t paid to ensure that no provider will face further action.”
“As we said in our submission to the court, we strongly support care workers being paid a fair wage for their valued work, but if this appeal was upheld it would have increased the risk of a sinkhole in adult social care.”
However, Cllr Seccombe warned the decision does little to ease the financial crisis facing social care.