Friday the 13th …lucky for some?

So the decision is in. On Friday 13th July, in the case of Mencap v Tomlinson-Blake, the Court of appeal handed down their judgment that ‘the only time that counts for NMW purposes is time when the worker is required to be awake for the purposes of working’, meaning that providers are not faced with the huge retrospective sleep in liability that has been looming over the sector for the past year or two. A collective sigh of relief without a doubt for organisations. But of course it is still isn’t over.

When I communicated the ruling to members, I received a number of replies ranging from ‘thank goodness for that’ to ‘great for providers but sad for staff’. And that’s just it. What happens next? We know staff will feel somewhat disappointed and the last thing we need is lower workforce morale, in a sector where both recruitment and retention is in crisis.

Clearly, the complainant can still appeal to the Supreme Court, although that clock is ticking… We need the Government to act now – to cement the new guidance for providers to offer clarity to providers, Local Authorities and of course for the benefit of staff. All stakeholders need to be clear on what it could mean for them and to ultimately ensure providers don’t now spear off in a hundred and one directions. To be fair on Tuesday, Barbara Keeley MP questioned Matt Hancock in his first Health Questions about sleep-ins – asking him to amend NMW regulations. He said he has ‘already had conversations with the Business Department who lead on these regulations to make sure we get the rules right for the future’. Encouraging stuff but with the Parliament now in recess, nothing is going to move quickly, I wouldn’t have thought. So providers continue to play the waiting game, and there remains huge variance in the sector. We know providers over the past year have been either paying the minimum wage, been paying top ups to average out earnings, and I know some have maintained to pay a flat rate.  So there is not going to be a solution that suits all. Working with the Sleep In Alliance, we have been in communication with BEIS and provided them with an ‘options paper’ with a strong offer to work with them to help them fully understand the ramifications for providers, staff, commissioners and the Government itself on any proposals/guidance they may have or produce. The lobbying will continue – it is important to ‘pick’ our way through this and ensure that staff are rewarded fairly and that funding to do so is made available from the Local Authorities, or some middle ground is at least negotiated. Worryingly, we have heard that some LA’s have already looked to decrease their fees with providers – do let me know if that is the case for you.

Of course, then there’s the SCCS, with over 800 employers in the scheme. I have heard that HMRC have been contacting providers in the SCCS and have been advised either Employers may suspend their self-review pending further advice from HMRC; or Employers may continue their self-review taking account of the Court of Appeal Judgement and considering all other National Minimum Wage risks. Let me know if you have heard differently. We welcome the fact that HMRC have indicated they will issue a further communication to employers by Friday 17 August 2018.

So in the short term what are providers to do? Well, many are saying they are not proposing any immediate change until some clear guidance is given. That could be a very wise move. It’s not as simple as scrapping existing arrangements; employers will need to consider any changes to the sleep in payments in relation to the terms in staff members contracts, impact on morale, looking at differentials, internal policies and pay attention to any murmurings from Commissioners.

Watch this space. The ‘can of worms’ is well and truly open – although the saving grace is that organisations will still be around to work through it following the ruling, thank goodness.

We will continue to keep our members updated of any progress/proposals as they happen.

Best wishes
Lisa