30/03/2026
🙌 This is a major win for employers in the disability and home care sector (SCHADS Award).
🚨 Landmark Ruling: The "Sleepover" Shift Is Not Continuous
The Full Federal Court has delivered a ruling in the case - [2026] FCAFC 25 (Fair Work Ombudsman v Jats Joint Pty Ltd), and it has officially rejected the Fair Work Ombudsman’s long-standing interpretation of how sleepovers are paid. https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2026/2026fcafc0025
❓What was the dispute?
For years, the Fair Work Ombudsman (FWO) argued that if an employee worked before a sleepover and after a sleepover, it was one long, "continuous" shift. This meant employers often had to pay a 15% night shift penalty for the entire period because the "shift" finished after midnight.
❓What did the Court decide?
The Court disagreed with the FWO. It ruled that under the SCHADS Award:
👉 Sleepovers are separate: A sleepover is a distinct period that "breaks" the work.
👉 Two shifts, not one: The hours worked before the sleepover and the hours after are two separate shifts.
👉 No "automatic" penalties: Since the morning hours are a "new" shift starting after 6:00 AM, they do not attract the 15% night shift loading just because the worker slept on-site.
Why this matters for Employers:
👉 Reduced Payroll Costs: You are likely not required to pay night shift loadings for morning hours following a sleepover.
👉 Overtime Clarity: Hours before and after the sleepover are not combined to trigger daily overtime (unless an individual segment exceeds the 10-hour limit).
👉 Backpay Protection: This ruling protects employers who have been treating these as separate shifts from FWO underpayment claims.
Action Items:
✅ Review your Roster: Ensure you are treating pre- and post-sleepover periods as standalone engagements.
✅ Check Minimum Engagements: Because they are separate shifts, ensure each work period meets the 2-hour minimum engagement (for social/community workers).
✅ Audit your Payroll: If your system is automatically applying 15% loading to morning hours after a sleepover, you may be overpaying.
⚠️ A Word of Caution: The Fair Work Commission is currently looking at changing the Award rules to "fix" this. While this ruling is the law today, stay tuned for potential Award variations later this year!
INDUSTRIAL LAW – interpretation of modern awards – Social, Community, Home Care and Disability Services Award 2010 – where parties have differing interpretations of the Award – whether night shift loading payable with respect to shifts worked before and/or after a “sleepover” – whether...
