Issue

A recent decision of the CJEU could have substantial implications for employers of peripatetic workers for time spent travelling between their homes and customer premises in terms of increasing wages and exposure to claims for back pay and changes to future working patterns.

On 10th September 2015, the Court of Justice of the European Union ("CJEU") handed down its judgment in Federacion de Servicios Privados del sindicato Comisiones obreras v Tyco Integrated Security SL, Tyco Integrated Fire & Security Corporation Servicios SA C-266/14 ("the Tyco Case").  The CJEU determined that travel time between peripatetic workers' homes and first and last customers' premises is "working time" for purposes of EU Working Time Directive 2003/88/EC ("WTD").  WTD is implemented in the UK through the Working Time Regulations 1998 ("WTR").

This will have an impact going forward on calculating daily rest and weekly working hours under Working Time Regulations and such hours will have to be taken into account when calculating national minimum wage.  It may also entitle workers to bring claims for back pay for failing to pay national minimum wage and/or failure to pay contractual entitlements.

Tyco Case Facts

Tyco carries on businesses in Spain involving the installation and maintenance of security services at customers premises.  It employs technicians across many areas in Spain to service certain geographical areas.

Prior to 2011, Tyco had regional offices and employees would attend those offices at the start of their working day, collect their work vehicle, accept assignments and travel from those offices to their first and last customer assignments.  They would return at the end of the day to return the company vehicle.  Tyco accepted that travel from the office to the first customer premises and returning from the last customer premises back to the office at the end of the day wasworking time and it treated it as such.  Travel from the employees' home to the office and back home was not working time.

In 2011, Tyco closed it offices in the regions and assigned all of its employees to its Head Office in Madrid.  Employees received a list of customer assignments, their locations and a work sheet confirming which customer should be visited and when, prior to each working day.  The employees would not travel to any office, but would leave home and travel to the customer premises.  Tyco did not count the travel time between the employees' home and the first and last customers' premises as working time.  In some instances this could take over 3 hours.

The issue before the CJEU was whether time spent travelling from the employees' homes to the first customer's premises and time spent travelling from the last customer's premises to the respective employee's home counted as working time for the purposes of WTD.

Time is deemed to be "working time" under the WTD and WTR if workers are (i) working; (ii) at the employer's disposal; and (iii) carrying out their activities or duties.  All three must be present.

The CJEU held that this travel time was working time.  It concluded that all 3 elements of working time were present.  In its view, the only difference between when Tyco had regional offices and when it did not simply altered the point of origin and final destination of the employee's working day from the regional office to the employee's home.

Tyco argued that travel time to and from the first and last customer premises was not working time because the employees were employed to provide technical services, installing and maintaining security systems for customers.  These were their duties, not travelling between home and customer premises.  Therefore, Tyco argued that time spent travelling between home and customer premises did not meet condition (iii) because the employees were not carrying out their activities or duties.  Unsurprisingly, the CJEU did not accept this argument.

What Is The Potential Impact?

This is likely to be an issue for employers of workers or employees who have no fixed or habitual place of work and are required to travel between their homes and customer premises, where the employer does not recognise this time as working time.

This travel time must be taken into account by employers when calculating workers or employees weekly working hours and may require adjustments to working patterns to ensure that (i) workers or employees are not working regularly over the 48 hour weekly limit unless opt out agreements are in place and (ii) when calculating daily rest periods of 11 uninterrupted hours under WTR.  It may also allow workers to bring claims for back pay if this time has not been taken into account by employers when calculating minimum wage or other contractual entitlements and may lead to changes to working patterns going forward.

Whilst the Tyco Case was only concerned with WTD, it will have wage implications because working time must in most cases be taken into account when calculating the average hourly pay under the National Minimum Wage legislation.  This could have profound effects in the light of the forthcoming increase in the national minimum wage in April 2016 onwards.

Action Points:

  • Identify whether you have any peripatetic workers.  This principle does not apply where workers or employees have a fixed or usual place of work;
  • If so, put in place a mechanism to take into account travel time between home and customer premises and analyse whether this time is still compliant with daily rest periods, weekly hours and national minimum wage.
  • If not, consider devising new working patterns or negotiating changes to their terms and conditions.  This may include agreeing a lower rate for hourly travel time and a higher rate when the worker is carrying out their main duties.  Employers may need to consider the extent of any potential financial exposure to claims for back pay from such workers.