September-11-2015 in Employment Law
A recent decision of the Court of Justice of the European Union (“the CJEU”) has the potential to have significant ramifications for employers in that the Court decided that certain categories of workers who travel from their homes to customers’ premises are considered to be working, for the purposes of the EU Working Time Directive (Directive 2003/88/EC), while making those journeys.
The decision applies to workers who do not have a fixed place of work and are required by their employers to travel to service clients. This could include for example sales reps, care workers or tradesmen employed by companies.
This could result in employers having to pay such workers for time spent travelling to and from work. Employees may also be entitled to a reduction in hours, as travelling time would also go towards the 48 hour maximum working week permitted under EU working time legislation.
The decision of the CJEU
The CJEU ruling originated from a referral of the Spanish national court concerning employees of the multinational Tyco (“the Tyco case”), technicians based in regional offices around Spain who installed security systems in homes and commercial properties. Tyco closed all of their regional offices in 2011, and the technicians began to operate from home. The employees in question travelled varying distances daily from their homes to the places where they were to carry out work. Tyco did not treat the first or last journey of the day as working time, but rather as rest time, for the purposes of the Working Time Directive, and considered the working day as starting when the employees reached their first client. Similarly, the conclusion of the days’ final appointment constituted the end of the working day. This was deemed unfair by the CJEU, which stated that expecting the workers to bear the burden of Tyco’s decision to close regional offices was be contrary to the Working Time Directive.
The law in Ireland
The Organisation of Working Time Act 1997 (“the Working Time Act”) implemented the original Working Time Directive (Council Directive 93/104/EC) into Irish law. The Working Time Act sets down minimum requirements around working hours, rest periods and accrual of annual leave. The purpose of the Directive is to make provision for the protection of the safety and health of workers.
The Tyco case is relevant from an Irish context in that our national courts are obliged to interpret Irish laws in line with European legislation, and decisions of the European courts.
The Labour Court has had occasion to look at the issue of travel time and working previously. In Breffni Carpentry Services Ltd and Deniss Solodounikovs (DWT0816) the Labour Court held that only the hours which the Complainant spent at the workplace, and not travelling time, could be regarded as working time. It appears in this case that the complainant was based out of his employer’s premises, rather than working from home. It remains to be seen how a similar case might now be treated in light of the Tyco decision.
The National Minimum Wage Act 2000
An additional possible area of conflict concerns the National Minimum Wage Act 2000 (“the Wage Act”), which provides a statutory basis for setting minimum rates of pay in Ireland. It also sets out the basis for calculating the working hours of an employee, to establish whether an employee is being paid the applicable minimum hourly rate of pay. In that context, the Wage Act specifies that working hours do not include time spent on travelling between an employee's place of residence and place of work and back.
While the Wage Act does not derive from European legislation and so is not directly impacted by the Tyco decision, nevertheless it is likely that claims may be brought by workers seeking recognition of travel time as working time under this legislation.
Implications for employers and employees
The area of working time is likely to be an area of focus for employers for the foreseeable future given recent changes to accrual of annual leave during sick leave, likely pending changes in the calculation of holiday pay, and now the decision in the Tyco case.
The Tyco case has a significant potential cost exposure for employers who have employees working primarily from home, with no fixed workplace, and travelling directly from home to client appointments.
It should be stressed that it remains to be seen how national courts will interpret the Tyco case. It is possible that the decision could be interpreted narrowly, for example confining it to situations where employers close down branch offices.
Employers would be well advised however to employ a watching brief and prepare for the possibility that the Tyco case could be interpreted broadly here. Audits of travelling employees, reviews of scheduling systems and evaluations of whether it would be feasible to schedule first and last appointments of the day in proximity to an employee’s home should be undertaken to minimise exposure should a similar case prove successful in this jurisdiction.
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