13 October 2017

The sleep-in care crisis

The sleep-in care crisis

The social care sector in this country is groaning under the weight of multiple challenges; high levels of demand and underfunding being the two key ones. A third issue is looming and it is one that threatens parts of the sector with insolvency: the question of pay for sleep-in carers.

This controversy made the headlines in April this year when the disability charity Mencap lost an appeal at an employment tribunal over the amount it paid carers. The tribunal said the charity had been wrong to pay a support worker £29.05 for a nine-hour sleep-in shift, that is, nearly £4.30 per hour below the National Minimum Wage (NMW).

A sleep-in shift is where a carer is required to spend the night at the home of those they are looking after. Since the NMW was introduced in 1999, care providers have paid - following official guidance - a flat rate ‘on call’ allowance for these shifts rather than the full minimum wage. If the carer was required to wake up to work, they would be compensated.

Mencap, who was delivering care on behalf of East Riding Yorkshire Council, was perplexed by the employment tribunal ruling. It effectively left them having to pay 5,500 staff members the NMW for the whole time they were on the premises regardless of whether they were asleep or not.

The ruling threatens the whole sector. As John Cowman, director of services at Mencap, puts it: ‘If sleep-ins have to be paid at the minimum wage the sector is faced with a real and potentially overwhelming funding crisis that will affect the well-being of hundreds of thousands of disabled people.’ 

Mencap, and many other providers, have since begun to pay the NMW for sleep-in shifts in order to protect themselves against lawsuits. According to a recent survey, 53% of respondents introduced the NMW in 2016/17. However, soon after the disabilities charity lost their appeal, HM Revenue & Customs (HMRC) announced they would take enforcement action demanding six years of back pay from the charity. This bill amounts to £400m in total. 

Representatives of the care workers welcomed both the tribunal and HMRC’s decision. Unison general secretary, Dave Prentis, said: ‘Charities and care companies have bid for contracts for years knowing they should be paying at least the national minimum wage for staff who do sleep-ins. Employers can’t now plead poverty and ask for an exemption from the law based on their own poor planning. The staff have done the work – now they should be paid for it.’

However, for providers in an already overstretched sector both decisions are, in the words of Mencap chairman Derek Lewis, ‘disastrous’. ‘For many smaller care providers across the country the financial impact will be devastating,’ he said last July. ‘The resulting multiple insolvencies will be more serious than Southern Cross because there will be no alternative providers available, as local authorities are already finding.’

The Department for Business, Energy & Industrial Strategy (DBEIS) assured the sector enforcement action would be suspended until October (a stay of execution since extended) in order to ‘minimise disruption’. In the meantime, they promised to consider the issue carefully to ‘ensure that action taken to protect workers is fair and proportionate, while seeing how it might be possible to minimise any impact on social care provision.’ 

Why did the employment tribunal reach the decision it did in the first place? It was not the first to do so. In a similar case in 2013 a care worker argued they were entitled to be paid the minimum wage for the hours spent sleeping at the house of three young adults who suffered from Down's Syndrome. The judge agreed, concluding that if the carer was not free to leave the premises to buy fish and chips then they were working; and if they were working, they should be paid the NRM.

The judge in this case - Esparon v Slavikovska - said the various authorities on the question were difficult to reconcile but still the claimant was right to argue the fact they were required to be present meant the hours constituted time work and so therefore they should receive the NMW.

‘An important consideration in determining whether an employee is carrying out time work by reason of presence at the Respondent's premises 'just in case' must be why the employer requires the employee to be on the premises,’ said HHJ Serota QC.

‘If he requires the employee to be on the premises pursuant to a statutory requirement to have a suitable person on the premises "just in case" that would be a powerful indicator that the employee is being paid simply to be there and is thus deemed to be working regardless of whether work is actually carried out.’ 

The judge in a similar case reached the same conclusion in 2014. Following these rulings, DBEIS updated its guidance in 2015 and 2016 to make it clear carers should be paid the NMW for the hours they are asleep.

Changes in Government guidance to keep up with case law is natural enough. And a reasonable argument for paying workers the NMW for the hours they are required to be on the premises can be made. But HMRC’s decision to chase providers for £400m of back-pay because of said changes seems strange, particularly when the department’s own guidance only recently changed.

Documents obtained by an FOI request from Anthony Collins Solicitors have revealed that a technical note circulated to compliance staff in February 2016 states that staff are not entitled to the NMW during sleeping hours. However, an email sent to HMRC staff the following month notified them that in certain cases there could be ‘instances where time workers are deemed to be working even if they are sleeping.’ This would depend, the email made clear, on the ‘arrangements between the worker and the employer.’ This is basically the position in the most up-to-date NMW guidance from the HMRC.

So, HMRC’s demand for back-pay appears to be punishing providers for following the Government’s earlier guidance.

Whitehall’s announcement at the end of last month that it would extend the suspension of minimum wage enforcement in the social care sector suggests the care sector may receive some help in dealing with the issue of back-pay. The statement said: ‘the Government will develop a new enforcement scheme for the sector to encourage and support social care providers to identify back pay owed to their staff.’ 

Mencap’s Derek Lewis described this as ‘encouraging’ and said the sector should receive ‘full funding for this liability’. ‘Ensuring the proper care for those with disabilities and funding the cost of it remains a statutory responsibility of Government,’ he said, ‘including the cost of this U-turn in the Government’s interpretation of its own rules.’ 

Responding to the Government's suspension decision, the Voluntary Organisations Disability Group (VDOG) VODG said it was seriously concerned about the impact the original ruling could have on sleep in services and was 'frustrated' by the lack of progress on finding a solution. VODG chair Steve Scown said: ‘The decision to pause is worrying as for each month that goes by providers are continuing to work with a potential unknown back pay bill with no clear indication about future funding arrangements.’ 

Back-pay aside, the sleep-in care crisis - as Mencap has characterised it in a campaign to raise awareness of the issue - is going to have an impact on councils. ‘Care providers are going to be increasingly challenging local authorities to make sure they are paying sufficient to the provider to pay NMW for every hour of a sleep-in,’ explains Matt Wort of Anthony Collins Solicitors, a firm dealing with a number of cases relating to back-pay claims.

‘Increasingly, where local authorities aren't paying sufficient they can expect to be challenged by providers and ultimately to be referred to their obligations under the care act statutory guidance which requires authorities to pay sufficiently well to make sure they do pay the NMW,’ Mr Wort added. ‘In extreme cases this could lead to potential judicial reviews of local authority decisions if they’re not prepared to change their position.’

The extra financial burden the sleep in care crisis is placing on the care sector is inevitably going to drive councils and providers into searching for ways to save money. It could well, as Mr Wort warns, effect the way care assessments are undertaken; the authorities may be more reluctant to conclude someone needs 24 hour care if its going to cost too much. Technology and on-call arrangements might also be brought in to keep costs down. It is debatable whether this would be as effective as having someone sleeping on the premises.

How this will be resolved is unclear. But, as Mr Wort says, ‘Given the extra cost its going to have to be the case that authorities and providers together think about other solutions to deliver sleep in care.’

 
comments powered by Disqus