Important Update: Federal Court Clarifies SCHADS Sleepover Provisions
A recent decision by the Federal Court of Australia has significantly clarified how sleepover shifts are treated under the Social, Community, Home Care and Disability Services (SCHADS) Award 2010, marking a shift away from the long-standing interpretation by the Fair Work Ombudsman (FWO).
In Jats Joint Pty Ltd v Fair Work Ombudsman [2025] FCA 743, the Court found that sleepovers are separate and distinct from ordinary shifts, meaning they do not attract the 15% night shift penalty under clause 29.3(b) of the Award, even when work is performed immediately before or after the sleepover period.
What Was in Dispute?
The case arose when the FWO issued a compliance notice to Jats Joint in relation to a part-time support worker, Ms Richards, employed between 2020 and 2021. The FWO alleged that Jats Joint had failed to pay the applicable night shift penalty for work performed either side of a sleepover, arguing that the sleepover should form part of the same shift.
According to the FWO’s long-standing guidance, if a shift included hours immediately before or after a sleepover, finishing after midnight or starting before 6:00am, it attracted the night shift penalty.
Jats Joint challenged this, arguing that:
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A sleepover is not part of the same shift, and
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The Award allows employers to roster work before or after a sleepover without it being considered one continuous shift.
The Court’s Decision
Justice Stellios sided with Jats Joint, concluding that a sleepover period is not to be treated as part of a shift for the purpose of applying the night shift loading. Key points from the judgment included:
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The Award does not define sleepovers as shifts.
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Clause 25.7 specifically outlines separate conditions and allowances for sleepovers.
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Overtime is only payable if additional work is performed during a sleepover, not simply because work occurs around it.
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The phrase “whole of such shift” in clause 29.3(b) does not accommodate the inclusion of a sleepover period within that shift.
Ultimately, the Court found that Ms Richards’ sleepovers did not impact the rate of pay for work done before or after them, and that Jats Joint did not breach the Award in how it applied pay rates during that period.
What Does This Mean for Employers?
This is a significant ruling for employers covered under the SCHADS Award. It clarifies that sleepover periods are not part of a shift for the purposes of calculating night shift penalties. Employers are not required to pay the 15% loading simply because work occurred before or after a sleepover, provided that work does not fall within the defined night shift period (midnight to 6am, Monday to Friday).
Importantly, this decision has not been appealed, and remains the prevailing interpretation at the time of writing.
What’s Next?
The Australian Industry Group (AiG) has written to the Fair Work Commission requesting that the Court’s findings be considered in ongoing Award variation matters (AM2023/28, AM2024/16 & AM2024/30). This may result in updates to the SCHADS Award in the future to formally clarify the intent and application of sleepover provisions.
Need Support?
If you’d like guidance on how this ruling may affect your rostering or pay practices under the SCHADS Award, please get in touch. Our team is here to help ensure your compliance and provide clarity on Award changes as they occur.