March 26th, 2021 / Insight posted in Articles

Sleep-ins case closed

The resolution of Mencap v Tomlinson-Blake puts to bed (pun intended) the issue of whether care providers should pay arrears to care workers who worked ‘sleep-in’ shifts.

The case considered whether care workers who are required to be in a certain place while they slept, are entitled to the national minimum wage for time that is spent being asleep. It was concluded that they were not – the worker has to be awake for the purpose of working for the National Minimum Wage to apply.

In terms of accounting, organisations took varying approaches to the issue. Following the initial success of the tribunal against Mencap in 2016/17, and the aggressive government directions to care providers in the immediate aftermath, responses ranged from some organisations which paid at least some elements of the arrears and set themselves up to pay minimum wage on sleep-in shifts going forward, to other organisations which made no changes whatsoever. This will need to be reviewed now in light of the final results of the matter.

For statutory accounts, the question was whether any sort of liability, contingent or otherwise, should be recognised in the accounts. Invariably the conclusion was that because of the level of uncertainty, the results of the 2018 Court of Appeal judgement (which overturned the tribunal decision), and the difficulties in estimating an accurate figure for any eventual payment, disclosure of the situation was considered sufficient for most entities.

Reactions to the case have been very careful to avoid any suggestion that this is a victory for anyone – care providers have long maintained that the sector is underfunded and their workers are underpaid. This is simply a manifestation of funding and political factors that are out of their control.

This case highlights the paradox that care providers were at risk of having to fund millions of pounds in back pay to workers whose pay was originally funded by government – at rates set by government. And may well be a wake-up call to funders of the care sector that funding needs to increase across the board.

If you would like to discuss this in more detail, please contact James directly.