Care workers who have to stay overnight as part of their job will not be entitled to the minimum wage after a Court of Appeal ruling.
The charity Mencap, who won the appeal, argued that a previous tribunal decision which compelled care providers to fund six years’ back pay for overnight carers was unaffordable.
Judges ruled that carers had to be awake for work to get the minimum wage.
But a union said workers should be paid what they were legally entitled to.
Care workers who provide care for people with serious learning disabilities overnight used to be paid a flat fee of around £30, reflecting the fact that they might be sleeping during some of their shifts.
But after employment tribunal rulings, HM Revenue and Customs said they should be paid at least the minimum wage for every hour overnight, amounting to about £60.
Employers were told to fund £400 million of back pay but care providers, including Mencap, argued that this was unaffordable.
It said smaller employers could be forced out of business by the decision.
The Court of Appeal ruled today that care providers had no liability for back pay.
Lord Justice Underhill, sitting with two other senior judges, said: “For the reasons which I have given I believe that sleepers-in… are to be characterised for the purpose of the regulations as available for work… rather than actually working… and so fall within the terms of the sleep-in exception.
“The result is that the only time that counts for national minimum wage purposes is time when the worker is required to be awake for the purposes of working.”