Q&A plus 7 key steps to ensure your business complies with recent case law
Has the recent media coverage of the European Court of Justice (ECJ) ruling on travel to work left you confused about how it affects your business? Read on to find the answers to the most commonly asked questions from small business owners and discover the seven steps you need to take to comply.
Every once in a while, test cases in employment law spark huge media coverage, whilst, in equal proportion, leaving employers feeling more confused than informed about their wider implications. Back in September, the focus of the media’s attention was firmly centred around the European Court of Justice’s landmark ruling on mobile workers rights regarding travelling to work.
The ECJ held that, where workers do not have a fixed place of work, time spent travelling between their homes and the first and last appointments of the day constitutes working time. (Federación de Servicios Privados del sindicato Comisiones Obreras v Tyco Integrated Security SL, Tyco Integrated Fire & Security Corporation Servicios SA Case C-266/14 ECJ)
Since many of our small business clients are managing peripatetic workers (those with no fixed work base), we have tackled the three most common questions in the wake of this case. Who is affected, and what is meant by ‘mobile workers’? What does ‘working time’ mean? And how does it impact employers’ obligations surrounding pay?
The most commonplace misinterpretation, thanks to the ambiguity of some of the media reports arising from the Tyco case, is that employers will be expected to dig deep into their payroll budgets to remunerate all manner of flexible workers for these previously unrecognised working hours. Not so. For many small business owners, already operating on lean budgets, this will come as a big relief. However that doesn’t mean you can consider the matter ticked off the HR to-do list.
Who is classified as a ‘mobile worker’?
As with all things legal, the devil is in the definition, as well as the detail. In today’s world of agile working, there can be many interpretations of the term ‘mobile working’. For the purposes of this ruling, the definition is ‘workers with no fixed or habitual place of work’. The examples most commonly cited would be care workers who visit patients in their own homes, travelling sales executives, or mobile repair and maintenance workers. Such people start and end their working day from home and do not attend a regular place of work.
What does ‘working time’ mean?
The important distinction to be made here is between paid work, and working time. The ECJ ruled that workers with no fixed place of work are at their employer’s disposal, and therefore ‘working’, when travelling to their first assignment of the day and travelling back home from their last appointment. Although these hours have never previously been recorded as working time, they should now be included, for the purposes of the Working Time Directive, as part of the working week.
The Working Time Regulations in the UK limit the average working week to 48 hours, and further define employers’ obligations to provide minimum annual leave, rest breaks, and consecutive rest periods within the working week. And if you employ night workers or younger workers, there are further stipulations to take into account. (The average working week is calculated by taking the average over a 17 week reference period).
What about the impact on pay?
As for the matter of pay, the ECJ passed no specific judgement. In simple terms, the ramifications of the Tyco case relate to what counts as working time, rather than what hours should or should not be paid. UK working time legislation does not require every minute of working time to be paid. The matter of pay is governed separately under the National Minimum Wage regulations, which holds that workers aged 21 or over should be paid a minimum average hourly rate of £6.70 per hour during each ‘pay reference period’ (the worker’s actual pay period, up to a maximum of a month). Therefore, there is no obligation for each individual hour of work to be remunerated, provided the average minimum rates are met in accordance with the NMW regulations.
Taking this into account, what are the key steps every business owner or manager should take to ensure compliance with recent case law?
- Identify whether you employ any ‘mobile workers’, based on the definition above.
- Conduct a ‘working time’ audit, taking into account any travel time that will now qualify as working time. Are your workers operating within, or exceeding the Working Time Regulation limits?
- Consider a Working Time Directive opt out for anyone operating in excess of the limits. Workers can choose to work more than 48 hours a week on average if they’re over 18. As an employer, you can ask workers to opt out, but you can’t insist on it, or treat them detrimentally if they refuse. Opting out can be for a certain period or indefinitely, but it must be voluntary and in writing.
- Check for any impact on rest breaks, if the working day is extended due to travel time.
- Check the wording of your employment contracts, since this may govern any pay implications. It is unlikely, but it will depend on the wording of the specific clauses surrounding pay and hours of work (for example, if the contract requires the worker to be paid for all "hours of work", including those taken up by this form of travel time, or if the inclusion of travel time means that overtime rates are triggered during what are currently treated as standard working hours). In the event of any ambiguity, you would be advised to re-word your contracts to ensure full clarity.
- Consider ways of reducing the impact of travel time on working hours; for example, by arranging first and last appointments as close to workers’ homes as possible.
- Double check your compliance with NMW rates – always a sensible safeguard, and especially since the rates increased in October.
If you have any concerns or are still unclear as to whether these changes affect your small business, please seek professional advice. Here at Business Clan, our qualified HR professionals provide a full range of consultancy and advisory services. If you need help, contact us or give us a call now on 033 0133 0543.
Naomi Scoffham, HR & Recruitment Consultant