The Court of Appeal recently ruled that a residential care provider was not liable to pay staff for "sleep-in" periods when working night shifts.
The decision has been criticised by unions (see box), but residential child care providers say it has prevented a crisis in the sector that could have led to the closure of hundreds of children's homes as a result of owing millions of pounds in back pay to staff.
However, the long-running dispute is not yet settled - Unison, the union that brought the original case, has applied to the Supreme Court to appeal the latest ruling and latest guidance from HM Revenue and Customs (HMRC) suggest employers may still be liable for payments.
Here are the key facts about the ruling and its potential implications.
What was the case about?
The Court of Appeal overturned a decision by an employment appeal tribunal in May 2017 which ruled care workers required to sleep in at a service user's home were entitled to be paid the national minimum wage for all hours worked, including the time spent asleep.
The Royal Mencap Society appealed successfully against the tribunal decision on the basis that under National Minimum Wage Regulations 2015, workers doing sleep-in shifts are available for work rather than actually working.
What does the ruling mean?
The court's ruling means only time when the worker is required to be awake for the purposes of working will count for minimum wage payments. Mencap, which spent £128,000 on legal fees contesting the case, says the decision had removed uncertainty about how the law on the minimum wage applied to sleep-in carers. However, Unison says the ruling is "at odds" with legal precedents and "a common sense understanding of what counts as work".
Who does it affect?
The case featured an adult residential care worker - however, the ruling also applies to those working in children's homes.
The 2015 Children's Homes Workforce Census estimates the number of staff working in children's residential care in England to be around 20,000.
Children's Social Care data published by the Department for Education in July showed there were 2,209 children's homes in March 2018, three per cent more than a year earlier. Private homes nowaccount for 73 per cent of all homes, with councils running 19 per cent and the voluntary sector eight per cent.
How does it affect councils?
The Local Government Association (LGA) says the ruling will be a relief to care providers and councils because it potentially removes "a considerable unfunded burden" at a time when the adult and children's social care systems are facing significant pressures.
The LGA has estimated the funding gap in children's services will reach £2bn by 2020.
However, the association has called on the government to do more and says it supports a "sustainable funding solution for care workers to be paid fairly for the work they carry out".
What are the next steps?
Last November, HMRC set up a compliance scheme for social care providers to ensure they were meeting their liability to care workers working sleep-in shifts. The LGA says it is urging the government to clarify what will happen to this scheme and for any enforcement action against providers for minimum wage back payments to cease.
It says: "Should the government wish to change the law on payments for sleep-ins, it should make appropriate new burdens funding available to ensure such liabilities can be paid for without adversely affecting councils, providers and those who rely on social care services."
However, children's home providers say HMRC guidance published in August indicates that employers may still be liable for sleeping-time payments.
The Independent Children's Homes Association has written to HMRC and DfE demanding confirmation that minimum wage payments will be calculated "according to the Court of Appeal judgment".
‘We have the facts and what's right on our side'
By Dave Prentis, general secretary, Unison
The Court of Appeal last month delivered a ruling that was a hammer blow for thousands of care workers who work sleep-in shifts. The court has denied them the hourly minimum pay that is the very least they deserve.
In the aftermath of that ruling, we made a commitment to those care workers - and everyone affected by this landmark case - that we would keep fighting for what is right. That includes continuing to fight on in the highest court in the land - the Supreme Court.
I am pleased to say that we have asked the Supreme Court for leave to appeal against the Court of Appeal's decision.
I know - and everyone who understands the work these care workers do, knows - that sleep-in shifts are working time and must be paid that way.
If you're not allowed to leave your place of work, are obliged to be away from your home and family, if you're up and down all night caring for those in real need, then you're at work and you should be paid for it.
The Supreme Court will now decide whether it grants us the right to appeal against the July decision by the Court of Appeal - and we're hopeful it will agree to hear our case. If it does, every necessary resource from the union will be used in an effort to win another landmark case for working people in the Supreme Court.
Like on the Employment Tribunal Fees case, we believe we have a strong case, with both the facts and what's right on our side - and that's why we're fighting on.