HM Insights

An employers guide to ‘Working Time’ – who do you need to pay and when?

If you employ workers who have no fixed workplace and are required to travel to service clients, are they working when they travel to the first client or return home from the last client? And do you have to pay them for that time?

Working Time Employment Law Pay Tyco National Minimum Wage

There has been a lot of attention paid to this issue over the past few months following a European court ruling on a Spanish case commonly referred to as ‘Tyco’.

And there has been almost as much confusion and misinformation around its significance for UK employers, particularly in relation to the National Minimum Wage (NMW).

There will be employers within the UK who will be affected by Tyco in some way. For these employers it is important to recognise what the implications of the ruling are and what they are not, particularly in terms of NMW as things currently stand.

This article aims to demystify the Tyco ruling by laying out exactly what the Tyco ruling means (and doesn’t mean) for employers.

What employees does Tyco apply to?

Before considering the consequences of the ruling it is important to understand who is covered by the European Court of Justice ruling in the Spanish origin case Tyco.

It does not apply to workers who are simply involved in a daily commute.

The case concerned employees (technicians) who travelled from home to a customer site to start their day. They would visit various sites and then return home from the last one. These workers were considered not to have a fixed or habitual place of work. In the UK various classes of employees may qualify in this category, such as care workers.

‘Working Time’ and the Working Time Regulations

The next step is to appreciate the different pieces of legislation in play in the UK within this context.

Tyco was considered under the Working Time Directive, a European Directive which is brought into effect nationally by the Working Time Regulations (WTR). The WTR mainly concern hours worked and are not generally concerned with pay.

In respect of the Directive, Tyco ruled that the time spent travelling for the relevant category of workers between their homes and their first job was ‘working time’ – this would therefore be the case under the WTR also. However, as discussed, they do not generally relate to ‘pay’. The effect of Tyco in this context may instead be that employers must consider implications of this working time on breaks, rest periods and in computing an employee’s weekly working time in respect of the 48 hour average cap.

National Minimum Wage

Moving on to the National Minimum Wage (NMW) Regulations, these use the concept of ‘time work’ and do not relate to ‘working time’. In addition, they do not flow from any European foundation as the WTR do. It is straightforward to clarify that a worker’s journey to work is excluded from the NMW ‘time work’ calculation as this is stated within the NMW Regulations.

Other time spent travelling will generally be ‘time work’ and it currently less clear whether the journey made at the end of the day by relevant workers, after the last assignment/job back home is included for NMW purposes.

Therefore, Tyco is not a ruling that says that these employees should be paid NMW for the journeys in question, although many have argued that this is the implication.
Furthermore, it would seem this argument has limited potential due to the wording of the legislation. Any real change would likely have to come from Parliament amending the legislation.

Other Potential Tyco implications – overtime & personal injury

There are various ways in which it may be argued that employers should have to pay employees following Tyco.

For instance, some may argue for remuneration during the periods discussed in the case by reference to their contract of employment. This may be relevant if a contract simply outlines an hourly rate and the employer’s practice is only to pay from the point of arrival at the first job/visit of the day. This could be argued as an unlawful deduction from wages, or breach of contract, on the basis that Tyco sets out that travelling to that job is ‘working time’.

The chances of success would depend on the wording of the contract; some may expressly exclude such journeys which would be difficult to overcome but others may be more ambiguous.

Employees may also argue that the relevant travelling time eats into their contractual hours which should have implications for when they begin to be paid overtime.

Lastly, the issue of whether an employee’s journey to and from work for the category of workers in question is “in the course of employment” may have implications for any personal injury arising during those journeys. This is a less explored implication of Tyco if those journeys are ‘working time’ and it is something which may receive further clarification in the future.

Get in touch

For any employers who are unsure of the practical implications that this case may have for them – such as whether it applies to their employees, how they may have to pay and what action can be taken to limit potential liabilities – then our employment team are available to provide up to date knowledge and assistance.