A recent Court of Appeal (CA) judgment has clarified the position on minimum wage requirements for workers travelling to and from work using transportation provided by their employer.
The legal context
Under the National Minimum Wage Regulations 2015 (the NMW Regulations), employers must pay employees for travel for the purposes of work at least at the national minimum wage (the NMW), unless it is between the worker’s home and their place of work.
Revenue and Customs Commissioners v. Taylors Services Ltd
This case involved an employer (TSL) who engaged workers for the purposes of providing them to poultry farms to perform tasks such as catching and loading/unloading poultry.
TSL provided a minibus service, with the minibus collecting workers, usually from their homes, and transporting them to the worksites. A minibus would also collect them and transport them home afterwards. These journeys could be very long, sometimes totalling eight hours on top of the working day. TSL paid the workers for the time spent on location but only £2.50 per hour (well below the NMW) for the time when they were being transported in the minibus.
HMRC issued TSL with notices of underpayment in relation to the non-payment of the NMW for the time spent travelling on the minibus, determining that this was working time under the NMW Regulations. TSL challenged the validity of these notices, arguing that the travel time was not working time for which the workers had a right to be paid, due to the exception in the NMW Regulations.
The Employment Tribunal upheld the underpayment notices and TSL appealed the decision to the Employment Appeal Tribunal (EAT). The EAT upheld TSL’s appeal. You can read more about the background in our previous blog post. HMRC then appealed the EAT’s decision to the CA.
CA decision
The CA dismissed HMRC’s appeal, agreeing with the EAT’s view that the time spent travelling between work and home was not working time for the purposes of the NMW Regulations.
This meant that the employer did not have to pay employees for the travel time at the NMW. Importantly, this is the case even if the travel time is long or the journey is particularly onerous, as was the case here.
The CA rejected the appellant’s argument that it should take a “purposive approach” to the interpretation of the NMW Regulations, arguing that Parliament did not intend it to apply to situations where the travel time was as lengthy as in this case. The CA found that the wording of the NMW Regulations was clear and there was no intention to restrict the travel time that would not constitute “time work”.
The CA acknowledged that the outcome may seem unjust in some circumstances, as HMRC argued, such as long journeys mandated by the employer. However, the CA pointed out that any perceived unfairness or anomaly is a matter for legislative or policy reform, not judicial interpretation.
Key takeaways
This case reinforces the general principle that employers are not required to pay the NMW for ordinary commuting time. It also highlights that this is the case even if the journey is lengthy or the employer provides the transport, unless the worker is engaged in actual work during the travel.
Be aware that the commute from the home to the workplace is the exception to the general rule that time spent travelling for work purposes is usually payable at NMW. You must ensure that you pay at least NMW for any travel time that is caught under the legislation. Bear in mind that the NMW Regulations and the Working Time Regulations take different approaches, with the latter considering travel time for peripatetic workers (those without a fixed work location) as working time.
