A landmark ruling has reshaped how employers calculate penalties for sleepover shifts under the Social, Community, Home Care and Disability Services Award 2010 (SCHADS Award).
The Case: Jats Joint Pty Ltd v Fair Work Ombudsman [2025] FCA 743
The Federal Court recently addressed a long-standing question: Should sleepover periods count as part of a shift for night penalty purposes?
The case arose when the Fair Work Ombudsman (FWO) issued a compliance notice to Jats Joint Pty Ltd, a disability support provider. The FWO alleged the company failed to pay a 15% night shift loading to an employee for work performed immediately before and after sleepovers. Its position reflected common industry practice and FWO guidance that sleepovers and adjacent work formed one continuous shift.
Jats Joint disagreed, arguing that sleepovers are a distinct arrangement under clause 25.7 of the Award and that pre- and post-sleepover work should be treated as separate shifts. The company maintained it had paid all required allowances, including the sleepover allowance and weekend penalties.
Court’s findings
Justice Stellios ruled in favour of Jats Joint, delivering clarity on three key points:
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Sleepovers are separate from shifts
Sleepovers are regulated under their own clause and attract a fixed allowance, not a shift loading.
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Night shift loading applies only to actual work
Clause 29.3(b) provides a 15% loading for shifts involving work between midnight and 6:00am. Simply being on sleepover duty during those hours does not qualify.
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Award structure supports separation
Treating sleepovers as part of a shift would conflict with the Award’s language and could lead to shifts exceeding maximum hours.
The Court also noted that clause 25.4(b) allows sleepovers to serve as a rest break between shifts, reinforcing their distinct nature.
What this means for employers
This decision overturns the widely held view that sleepovers and adjacent work form one continuous shift. The practical implications are significant:
Pre- and post-sleepover work = separate shifts
Apply minimum engagement and overtime rules accordingly.
Night penalties only apply if actual work falls in night hours
For example, a morning shift starting at 7:00am after a sleepover does not attract a night loading.
Sleepover allowance still applies
Plus, any active work during a sleepover must be paid at the appropriate overtime rate.
The compliance notice against Jats Joint was cancelled, and no back-pay was required. The ruling is expected to influence future FWO guidance and may prompt the Fair Work Commission to clarify the Award.
Key takeaways
- Sleepovers are not part of a shift for penalty purposes.
- Night loading applies only to actual work during night hours.
- Employers should review rostering and payroll systems to ensure compliance with this interpretation.
This decision provides certainty for community service providers and reduces the risk of unexpected liabilities, provided sleepover arrangements comply with the Award’s specific conditions.
However, the FWO has announced it has lodged appeal against this decision, so watch this space.
