Sleeping on the job: The Employment Court decided that the care worker was working during his sleepover hours, as his time was restricted

The Dominion Post 24 February 2010

The outcome of Phillip Dickson's case against Idea Services, a part of IHC New Zealand, has sent seismic waves through organisations providing services and care to the disabled.

The court decisions will have a far wider reach than the disabled care community. It is becoming apparent, in light of several other recent claims, that the Dickson case will change the legal obligations for many industries employing "sleepover" staff.

Mr Dickson's case came before the Employment Court in the middle of last year. He worked as a community service worker in a number of homes operated by Idea Services in the Horowhenua area.

His work, particularly in relation to one home in Otaki, required him to be present in the home between 4pm and 10pm on weekdays and weekends to assist intellectually disabled residents with domestic tasks, such as washing, making and eating meals, cleaning and tidying, and preparing lunches for the following day. This was paid at a rate above the minimum wage.

He was also required to sleep over at the community homes several nights a month. On such occasions, from 10pm until late morning, the home and its occupants were his responsibility. For these sleepovers he was paid a modest sleepover allowance.

Mr Dickson's claim was in relation to the sleepover payment. The court considered two main issues - first, whether the hours spent by workers sleeping over at an IHC home could be considered to be working hours.

Many factors were important, for instance from 10pm Mr Dickson was not required to be actively and constantly engaged with residents, their visitors or anyone else. His time was his own unless he was required to deal with an incident associated with the home and its residents.

The problem for IHC was that Mr Dickson's time was quite significantly restricted during sleepovers. He was not allowed to leave the home without prior permission, or without a relief worker being present.

If he slept he was to be available to be woken to respond to any incident. He could not sleep behind a locked door. He could not consume or be affected by alcohol or drugs. He could not have visitors without prior permission. Any activity he engaged in was not to disturb the residents during the night.

In July 2009, the court decided that Mr Dickson was indeed working during his sleepover hours.

The second question was, how should Mr Dickson be paid?

In December, the court determined that as sleepovers came within the definition of work, Mr Dickson had to be paid the minimum wage for the hours he was sleeping over.

This decision in itself is of profound significance. Having established that, however, the court still had to answer IHC's question of whether, due to the fact that IHC paid Mr Dickson above the minimum wage during other periods of time, it could set off these "overpayments" against what it owed. Could it set off the overnight allowance too?

The court of three judges was split in its decision. The majority held that the averaging of wages was not the approach to be taken and that Mr Dickson was entitled to be paid no less than the minimum wage for every hour he spent sleeping over, without allowance for other payments above the minimum wage.

Implementation of this decision, according to IHC, could cost it more than $30 million a year in contrast to the current $8.5m. If back pay was to be demanded then the amounts owed by IHC to its employees could be staggering.

The decision has had and will continue to have a significant impact on disabled care. In the past large institutions such as Kimberley Hospital in Levin provided care for the intellectually disabled. Staff were paid under public service conditions and generally were well paid. However, during the 1980s social thinking altered and it was considered that people should instead live in small groups in houses within the community whenever possible. The idea was to provide conventional community living.

No doubt the change in philosophy had a benefit for the taxpayer, in that it is cheaper to look after people in the community in quasi-flatting type arrangements.

No doubt also, the staff's wages are much more modest than those that would be paid to nurses and other staff under public service agreements.

The question that remains is how far the law will go in terms of its practical effect upon health care services and upon other industries.

The potential for new examples of substantial wage claims to come before the courts is obvious. If workers have their freedoms restricted in the way that Mr Dickson did, many may well have wage claims.

Other workers with lesser restrictions may also have wage claims. For example, workers who are on standby or school teachers who mind boarding houses, run school camps or take sports in the evenings or weekends may have wage claims.

People working in apartments as caretakers and who sleep in the building may also have claims. Organisations which provide cheap accommodation for people and pay an allowance to, say, students for sleeping over may be vulnerable. Workers employed to mind stock on farms overnight may also have claims.

One thing to bear in mind is that many workers are paid well beyond the minimum wage, and many are on salaries. This decision may have no effect on those workers. Their contracts may be crucial too.

The Dickson case will probably make its way through the court system to the Court of Appeal, and presumably the Supreme Court. The involvement of huge sums of money and the cutting edge nature of the legal judgments involved will see to that. The full effect of the decision is yet to be seen but is likely to be significant.

Peter Cullen is a partner at Cullen - the Employment Law Firm

Email: peter@cullenlaw.co.nz