In the recent case of Commissioners for HM Revenue and Customs v Taylors Services Ltd (dissolved) and ors, CA , the Court of Appeal has upheld the decision that time spent travelling from home to various locations is not ‘time work’ for the purposes of Reg 30 of the National Minimum Wage Regulations 2015 (NMW Regulations).
Background
The Respondents engaged workers on ‘zero hours’ contracts and provided them to poultry farms around the country. The Respondents usually provided a minibus which collected the workers from their homes and took them directly to their first assignment. The workers were sometimes required to go first to the Respondents’ premises. The parties agreed that the journeys could on occasion be very long: up to four hours each way, so that the workers could be travelling for up to eight hours a day on top of a normal working day, or they could be collected from home in the middle of the night in order to reach the site of that day’s assignment in time for a morning’s work.
Under the National Minimum Wage Act 1998 (the 1998 Act) an employee must be paid at least the National Minimum Wage (NMW) in respect of work in a pay reference period. The NMW Regulations determine how the NMW is calculated. The NMW Regulations consider four different types of work: “Salaried hours work,” “output work,” “unmeasured work” or “time work.” Time work, which is the type of work considered in this case, is defined in Regulation 30 as work other than salaried hours work, in respect of which a worker is entitled to be paid under their contract, by reference to the time worked or by reference to a measure of output in a period of time where the worker is required to work. There are further provisions clarifying time work in regulations 31-35. In particular, regulation 34 which considers when hours when a worker is travelling should be treated as hours of time work. Under that provision, hours of travelling for the purposes of time work, where the worker would otherwise be working should be treated as time work unless the travel is between the workers home and a place of work. Travel time which is included as hours when the worker would otherwise be working should include hours when the worker is travelling for the purposes of carrying out assignments to be carried out at a different place and hours when the worker is travelling where it is uncertain whether the worker would otherwise be working because the worker’s hours of work vary.
HMRC issued notices assessing that the employers were liable for arrears of NMW in relation to the travel time. The Respondents appealed to the Employment Tribunal who held that the time spent travelling was itself ‘time work’ within the definition of Reg 30 of the NMW Regulations and so workers should be paid the NMW for that traveling time. The EAT allowed the respondents appeal and held that the workers should not be paid for that time.
The main argument in this case concerned regulation 30 and regulation 34 of the NMW Regulations. In addition, the court had to consider the decision of the Supreme Court in Royal Mencap Society v Tomlinson-Blake [2021] UKSC 8 which made it clear that the NMW regulations should be read as a whole.
Decision of the Court of Appeal
The Court of Appeal dismissed the Appeal, agreeing that the EAT’s approach to the construction of the NMW regulations was correct. The ET had erred in law in holding that the hours which the worker spent travelling to their assignments was time work for the purposes of the regulations.
It agreed with the EAT that Mencap decides that the relevant regulations must be read as a whole. In particular, it is not possible to decide, in a particular case, whether travelling is time work for the purposes of regulation 30 without taking into account regulation 20, which defines travelling, and regulation 34, which deals with travel in the situations to which it applies.
As set out above, the NMW regulations mean that hours spent travelling, when the worker ‘would otherwise be working’, are ‘treated as time work’. However, if the travel is at a time when the worker would not otherwise be working, that travel time is not to be treated as hour of time work, regardless of the purpose of that travel. The ET in this case was, therefore bound to investigate whether or not, when they were travelling, the workers ‘would otherwise be working’. In fact, the ET had determined that the work should be considered as “time work” for the purposes of regulation 30 (without further consideration of regulation 34) and the CA agreed with the EAT that the ET had erred in that regard.
The CA held that Regulation 34(2) makes it clear that whether the travel is time work for the purposes of the Regulations cannot be decided without considering the whole of Chapter 3 of the NMW regulations. The purpose of regulation 34 (2) is to make clear what periods of travel are intended by the words ‘where the worker would otherwise be working’. This, the CA set out would arise in in two circumstances: when a worker is travelling for the purposes of work between different places of work which are not occupied by the employer or when the worker is travelling and it is not certain whether the worker would otherwise be working because his hours of work vary. So, for example, business travel during the working day would be covered but not a daily commute (particularly where the worker has a set start and finish time’) because that was not time when the worker would otherwise be working. In this case the relevant travelling time between the worker’s home and first site did not fall within the exception in regulation 34 as it was not time when the worker would otherwise be carrying out any work.
HMRC argued that the facts of this case reveal a potential injustice or anomaly, in that whether or not a worker’s travel time counted as hours of time work can be influenced or manipulated by an employer’s decision to provide transport and to pick up the workers from their homes. In this case there could be up to eight hours a day when the workers were travelling but which did not count as hours of time work. However, the Court of Appeal felt that if there is such an anomaly, this statutory scheme provides the means of correcting it, either a report by the expert statutory body, the Low Pay Commission, or amendment of the Regulations by the Secretary of State . They are in a much better position than the court to decide whether there is an anomaly, and whether and if so exactly how the regulations should be re-drafted to correct it.