Employment Law Cases

HMRC v Taylors Services Ltd (dissolved)

Travel from home to work sites was not ‘time work’ for the purposes of the National Minimum Wage Regulations 2015 reg. 30 and did not fall within the reg. 34 exceptions that would treat such travel as working time.

Background

Taylors engaged workers on zero-hours contracts and supplied them to the poultry industry. They provided a minibus that would collect the workers from their homes and transport them directly to their first assignment. On top of a normal working day, these journeys could be up to eight hours long. The workers were paid £2.50 per hour. In 2020, HMRC decided that the time these workers spent travelling to and from farms around the country should be reimbursed at the NMW and issued Notices of Underpayment totalling around £62,000 of wage arrears, plus penalties.

Taylors appealed HMRC’s decision to the employment tribunal, but the tribunal agreed with HMRC’s approach. The tribunal’s decision was on the basis that the workers’ time spent travelling to and from the poultry farms was ‘time work’ as defined by reg. 30 and 34 of the NMW regulations, although the time spent travelling had not been ‘actual work’. This seemed to be based on the fact that Taylors had control over the transport arrangements and laid on transport for its workers and HMRC believed this was the only way that the workers could get to site to carry out their roles as ‘poultry technicians’ and so this was not an ‘ordinary commute’. Taylors appealed to the EAT which allowed its appeal. HMRC subsequently took the case to the Court of Appeal.

Court of Appeal decision

HMRC’s appeal was dismissed.

It was argued by HMRC that the EAT had failed to give the regulations on time work a purposive construction and wrongly applied the reasoning in Royal Mencap Society v Tomlinson-Blake, which was about ‘sleep-in’ workers rather than travel. Further, the EAT was wrong to hold that the travel time was not ‘time work’ in light of the tribunal’s findings about the control of that travel exercised by Taylors.

The Court of Appeal held that the EAT’s approach to the construction of NMW regulations was correct because:

• According to Mencap (which is binding on the EAT and Court of Appeal), the relevant regulations must be read as a whole. The tribunal erred in law by reaching a decision based on reg 30 alone. The starting point for this exercise is reg. 35(1) which provides that hours when a worker is absent from work are not treated as hours of time work except as specified in reg. 32-34.  The reference to reg. 34 makes it clear that the draftsman understood absence from work to include time spent travelling.
• Time spent travelling is not time work unless it is, by virtue of reg 34, ‘treated as’ time work. But there was no suggestion in the tribunal that if the workers were not in the transport for up to four hours each way, they would be chasing chickens.
• Regulation 34(1) creates a general rule and an exception, the effect of which is that time travelling is not treated as hours of time work if (a) it is not for the purposes of time work, or (b) it is not done at a time when the worker would otherwise be working, or (c) it is travel between the worker’s home and the place where they carry out an assignment.
• The purpose of reg 34(2) is to make clear what periods of travel are treated as included in the phrase ‘where the worker would otherwise be working’, in two different cases. The first is hours when a worker is travelling for the purposes of work between different places of work which are not occupied by the employer (i.e. a ‘peripatetic worker’). The second is when the worker is travelling and it is not certain whether they would otherwise be working because their hours of work vary (either in their length or in their timing). Here the evidence was clear that the workers knew what time they would start and finish, and the Court of Appeal reminded us that this exception would apply in cases where a worker was required to travel from their home during what would normally be working hours: an example given in Harvey on Industrial Relations and Employment Law is where the worker is working at home but is then called into the office for a meeting.

The Court of Appeal was not able to say whether there was a potential anomaly, in that whether or not a worker’s travel time counted as hours of time work can be influenced or manipulated by an employer’s decision in a case like this to provide transport and to pick up the workers from their homes, with the apparently unjust result, in this case, that up to eight hours a day when the workers were travelling did not count as hours of time work. If there was such an anomaly, it was for Parliament to correct it, not the courts.

Comment

This case is a useful analysis of travel time for the purpose of the NMW, especially when combined with the reasoning given in the Mencap case. It is difficult to see how HMRC will trouble the Supreme Court with this case.

“It is important to remember that this is a ‘sleep-in’ decision – so this is not about workers who are either working at home or working away from home but expected to carry out specific tasks during their ‘shift’. They are workers working away from home and the expectation is that they will be sleeping. This is an important case for the care industry as if it had gone against them there would have been a lot of back pay claims and an increased cost of care.” However, further clarification as to hen the NMW applies in relation to travel to and from work has been given by the Court of Appeal in HMRC v Taylors Services Ltd.