Changes to "sleepover" shift rules under SCHADS Award

Just before the 2025 holiday break, the Fair Work Commission (FWC) released a long-awaited decision concerning the regulation of “sleepover” shifts under the Social, Community, Home Care and Disability Services (SCHADS) Award. The decision has important implications for organisations in the community care and disability sectors, particularly where employees stay overnight at workplaces to provide care to clients.

What was the case about?

The proceedings involved competing applications from employer groups and unions seeking to vary the SCHADS Award. The aim was to remove ambiguity and clarify how shift loadings, overtime and rest break entitlements apply when employees perform work before and/or after a sleepover period. 

At the centre of the dispute was how the current, and often complex, Award provisions should be interpreted when dealing with sleepover shifts.

The FWC’s Decision 

The FWC determined that the SCHADS Award should be varied to provide greater clarity about how sleepover shifts are to be structured and paid going forward. In summary, the FWC intends to vary the Award so that:

1. A sleepover shift that includes work before and after the sleepover period is treated as a single shift. It cannot be split into two separate or standalone shifts. As a result, the sleepover period cannot count as a break between shifts for the purposes of clause 25.4.
2. Overtime will apply where the total working time for the shift (excluding the sleepover period itself) exceeds 12 hours. This represents an increase from the current 10-hour threshold, but will require employee agreement. 
3. No individual portion of active work (i.e. work pre-sleepover or work post-sleepover) can exceed eight ordinary hours.
4. By way of example, employees may be rostered to work: six hours before the sleepover and a further six hours after the sleepover (a total shift span of 20 hours); or eight hours before the sleepover and four hours after the sleepover (also a total shift span of 20 hours), without triggering overtime.
5.  Shift loadings will be calculated separately for each discrete portion of work performed during a sleepover shift. For example: the afternoon or evening portion of work will typically attract an afternoon shift loading; and the morning portion of work will not attract a shift loading. 
6. This approach departs from the practice adopted by many providers of paying a night shift loading for all hours worked both before and after the sleepover period. As a result, the decision may provide some financial relief for disability sector providers facing NDIS funding pressures.   
7. Finally, the decision confirms that where an employee does not receive an 8-hour break between shifts, this does not automatically trigger overtime for the subsequent shift (except when clause 28.3 applies). This is consistent with our long-held view of the Award’s operation. However, we are aware that some payroll systems are incorrectly configured to apply overtime in these circumstances, so providers should review this carefully. 

ABLA appeared in these proceedings on behalf of employer groups. Our team has deep expertise in the SCHADS sector and is well placed to assist providers in understanding and implementing these changes. 

When will the changes begin?

The FWC rejected an application for the changes to operate retrospectively. Accordingly, the decision will not affect historical practices and will apply on a prospective (go-forward) basis only.

While a commencement date has not yet been determined, businesses should begin planning for the changes as early as possible.

What should employers do to prepare?

For affected organisations, the changes are likely to require both operational and system-level adjustments, including:

• updates to payroll systems and pay rules;
• changes to rostering practices and shift structures;
• adjustments to employees’ working hours;
• consultation with employees about the proposed changes; and
• appropriate documentation to support implementation. 

Anything else to consider?

Some providers may be aware of the Federal Court decision in Jats Joint Pty Ltd v Fair Work Ombudsman [2025] FCA 743, handed down in July 2025, which dealt with similar issues. 

That decision is relevant to the interpretation of the current version of the SCHADS Award and may be relevant to historical compliance issues. However, it is likely to be overtaken by the FWC’s latest decision. The Jats Joint decision is also currently subject to an appeal.

Given the complexity of the regulatory environment, we encourage affected businesses to contact us if assistance is required in navigating these developments.