In April, Mencap was one of three employers of care staff facing claims from workers for loss of earnings which were considered together at an employment tribunal. [Focus Care Agency and ors Appeal].

Mencap is now calling for the government to suspend HMRC enforcement action immediately, until the law is clarified and a definitive decision is made of back pay. It also wants the government to give a public undertaking to fund back pay should the Court of Appeal uphold the tribunal decision.

The carers were all paid a flat rate sum of between £25 and £29 for an eight-hour ‘sleep in’ shift in an individual’s home, rather than the hourly NMW rate which applied during daytime work. During this night time period they were available if their client required assistance, but were otherwise asleep.

The judge at the tribunal said: ‘The question at the heart of the appeals is whether employees who sleep-in in order to carry out duties if required, engage in “time work” for the full duration of the sleep-in shift or whether they are working for national minimum wage payment purposes only when they are awake to carry out any relevant duties.’

The judge ruled against all three companies, citing in the case of Mencap, the regulatory obligation to have someone on the premises and their responsibility throughout the sleeping shift both to be and remain present throughout and to keep a listening ear and exercise professional judgment as to whether or not to intervene, and if required to act straightaway. 

The judge said: ‘On the basis of the facts found by the employment tribunal, it was amply entitled to conclude that the claimant was performing the role of a carer during the sleep-in shift, whether asleep or not and I can detect no error of law or approach in that conclusion.’

Mencap has said it intends to appeal against the decision, but no date has yet been given for the hearing. In the meantime, the charity says it has been asked by HMRC to begin making payment of back pay to support workers who have been sleeping in. Mencap says this could involve six years of payments and could total as much as £400m.

Derek Lewis, chairman of Mencap, said: ‘There will be a major impact on the 5,500 people we support and some may even end up losing that support all together.

‘For many smaller care providers across the country the financial impact will be devastating.’

Mencap says it challenged the employment tribunal case because the charity wanted clarity over the NMW rules for sleeping in, as currently government funding for social care support does not include calculations based on this. The charity says the estimated cost of sleep-ins to the sector is £800m over three years.

Unison, which represented a number of overnight carers in their legal challenges, said: ‘It's the government's failure to fund social care properly that risks devastating the care sector, not the workers asking for a legal wage.

‘Charities and care companies have known for a long time they must pay sleep-in staff at least the minimum wage. But it's only now HMRC is in pursuit that many are pleading poverty and asking for an exemption from the law.’

HMRC has been approached for comment.

The employment tribunal case, Focus Care Agency and Mr B Roberts; Mrs J Frudd, Mr I Frudd and the Partington Group Ltd; Royal Mencap Society and Mrs C Tomlinson-Blake Appeal No. UKEAT/0143/16/DM; UKEAT/0244/16/DM; UKEAT/0290/16/DM is here.