In HMRC v Taylor Services Limited HMRC were of the view that, in these circumstances, the time spent travelling should be remunerated at the national minimum wage ("NMW").
What does the law say?
The National Minimum Wage Regulations 2015 ("the Regulations") set out how the NMW is calculated. In broad terms, the Regulations say that if a worker is travelling (a) for the purposes of work and (b) at a time during which he would otherwise be working, then that time is treated as hours of "time work" and the worker should be paid NMW.
The exception to that general rule is that time spent in travel which meets those two conditions but is between the worker's home and their workplace is not treated as time work. Where it is not treated as time work, the employer is not required to pay NMW. So, time spent during the working day travelling between clients' premises, for example, would require to be paid at least at the NMW rate, but time spent on the morning or evening commute usually would not.
Background
The issue in this case was whether "flock technicians" at farms around the country should be paid national minimum wage for time spent travelling to and from farms around the country. The workers in question were engaged on zero hours contracts. They were collected by their employer's minibus, usually from their homes, and transported directly to their first job of the day. They were then taken back home at the end of the day. The length of the commute was such that the workers could be travelling for up to 4 hours in each direction. This meant that sometimes they were collected in the early hours of the morning to get them to work on time. While the workers were usually paid, it was at the rate of £2.50 per hour for time spent travelling, not the NMW.
In 2020, HMRC issued notices of underpayment to the employer amounting to roughly £62,000. The employer unsuccessfully appealed against the notices in an employment tribunal ("the ET"). The ET concluded that the time spent travelling was time work and should have been paid at the NMW.
However, an appeal by the employer to the EAT was successful. The ET erred in its efforts to find that the travel was work because it was "onerous, unpleasant, lengthy in duration and mandated by the employer". The EAT was of the view that, applying the ordinary meaning of the words, the time spent was unavoidably still travel and not work. During the travel time the workers were free to engage in a number of activities, including "applying for more agreeable employment". HMRC appealed to the Court of Appeal.
Court of Appeal judgment
HMRC had argued throughout the case's passage through the court and tribunals that the interpretation of the Regulations resulting in payment of NMW not being required caused an injustice to the workers. Not only was the travel time in this case very long, but by requiring the workers to be collected from their home and taken to their place of work, the employer could control whether or not workers were entitled to NMW. The exception for travel to and from work could not be intended to apply in the circumstances of this case. A purposive approach should be taken to the application of the Regulations.
The Court of Appeal rejected this argument. The wording of the Regulations was clear, and Parliament had not intended to apply a restriction on the amount of travel time that was excluded from payment of the NMW. The Regulations implement social policy in which the Low Pay Commission and the Secretary of State have expertise. If there is a loophole in the Regulations they are better placed than the Court to decide that, and whether the Regulations should be re-drafted to correct it.
Comment
This case affirms that employers can continue to assume that the daily commute, even when it is lengthy and the employer provides transport, need not be paid at the NMW rate. However, employers should note that this is an exception (albeit one that applies to most of us every day) to the general rule and travel for work purposes, at times when the worker would be working if they were not needing to travel, should be paid NMW.
