Working Time & National Minimum Wage: Why Travel Time Matters

There has been ongoing debate as to whether time spent travelling to work falls under the category of “time work”, and the Employment Appeal Tribunal has recently provided some clarification in the case of Taylor’s Services v HMRC.

Employers are obliged to ensure that they pay at least National Minimum Wage (NMW) rates for the hours a worker works. Currently, for those aged 21 or over, the NMW rate is currently £12.21 per hour. However, whilst employers may think they are paying their workers the correct NMW rates, an increasing number are falling foul of the rules for failing to account for “time work” within the meaning of the rules.

In a nutshell, under NMW rules, “time work” is essentially any period of time where a worker is at their employer’s disposal or carrying out any duties or training required for the job. This includes time spent waiting for tasks, travelling between work assignments, attending mandatory training, or being on standby at the workplace. Typically, it does not include commuting from home to a fixed workplace. This is the foundation for the Taylor’s Services case.

The case concerned workers who were on zero hours contracts working in the poultry industry. Their employer provided a minibus for the workers to get to and from their home to the various farms where they worked across the country. The journeys on the minibus could last up to eight hours, and workers were paid a flat rate of £2.50 an hour for time they spent travelling.

HMRC argued that this time should be classified as “time work” and believed that the workers should be paid the full NMW for their time spent travelling to work. They issued notices of NMW underpayment, amounting to approximately £62,000 in wage arrears and £59,000 in penalties.

The employer appealed against the notices to the Employment Tribunal, who agreed with HMRC that the workers had been underpaid as the travelling time should be treated as “time work.”

However, Taylor’s Services then appealed to the Employment Appeal Tribunal (EAT), which disagreed with the Employment Tribunal’s decision, finding that the time spent purely travelling is not “time work” under Regulation 30 of the National Minimum Wage Regulations 2015 unless it is deemed to be such by Regulation 34.

Regulation 30 defines time work, whereas Regulation 34 qualifies this by specifying when travel time counts as time work. Regulation 34 states that travel time is treated as working time only if the worker would otherwise be working, and it specifically excludes travel between a worker’s home and a place or work (or assignment), i.e., commuting.

Upon reviewing the facts of the matter, the EAT concluded that the workers were able to do whatever they wanted (such as read or watch films) whilst they were travelling, and therefore this was not time spent “working”. The EAT acknowledged that travel can amount to “time work” in certain circumstances, such as attending a business meeting whilst on a train, but this case was not one of those situations.

HMRC appealed to the Court of Appeal, but the Court of Appeal upheld the EAT’s decision. They criticised the Employment Tribunal for treating regulations 30 and 34 as “sequential” or separate provisions, and held that they must be read as a “harmonious whole.”

This case highlights the complexity of ensuring compliance with the NMW rules, and how easy it is (even for the Employment Tribunal itself!) to misinterpret the regulations.

If you are dealing with a situation involving the NMW rules, we can help. Please contact any member of our Employment Team.

Please note that this update is not intended to be exhaustive or be a substitute for legal advice. The application of the law in this area will often depend upon the specific facts and you are advised to seek specific advice on any given scenario.