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Posted 14 October 2015
by Simon Sanger-Anderson

Tozers Employment Law Newsletter – Autumn 2015

Time to pay for travel to work?

Much has been made of the recent case of Federacion de Servicios Privados del sindicato Comisiones Obreras v Tyco Integrated Security SL and another in which the European Court of Justice has recently held that time spent by peripatetic workers between their home and the premises of their first and last customers of the day was working time under the Working Time Directive. So how will this affect UK employers?

The case concerned a Spanish security system installation and maintenance company where workers travelled directly from home to the first customer of the day, and directly home from the last customer of the day. Their employer argued that these journeys were not ‘working time’ under the Working Time Directive. The ECJ disagreed, finding that such journeys amount to ‘working time’. In arriving at this decision, the ECJ specifically rejected an argument from the UK government that this would increase costs for employers, stating in response that employers remain free (subject to national law) to determine pay for such travel time.

Applying this to UK employers, it is important to remember that the case dealt only with workers with no fixed or habitual place of work. The vast majority of UK workers who are expected to travel to and from a fixed workplace in their own time will therefore be unaffected by this ruling. It will, however, affect workers such as tradesmen or care workers who assist clients in their own homes.

For those who are covered, the ruling deals only with the position under the Working Time Regulations. It means that travel time directly to/from the first/last customer of the day will now count as working time for the purposes of establishing compliance with rules such the 48 hour working week, daily rest and rest breaks. The practical point for employers to consider is whether rotas may need to be reworked or working days shortened to accommodate this.

The most common question we are being asked is whether workers now have to be paid for their travel time to/from the first/last customer of the day. The answer is – probably not. There is nothing in this judgment that undermines general contractual principles for payment – so a worker paid according to an established contractual pattern (e.g. based on a fixed daily or weekly rate or a salaried worker) will not have his contractual entitlement increased.

This case should not affect the national minimum wage position. The current position under the National Minimum Wage Regulations 2015 is that, for both salaried hours work and time work, travel between the worker’s home and a place of work or “a place where an assignment is carried out” does not attract the minimum wage – a position which is not directly challenged by this case. Of course workers who have heard about this case may now assume they will be paid more, so you may want to think about how you should respond to them.

If you need any more specific advice or wish to talk through the implications for your workforce, do please get in touch.

Over 1 million working people will receive a pay rise – National Minimum Wage

From 1st October 2015, the National Minimum wage increased. The Government’s new rates are as follows:-

  • For workers 21 and over, the rate will increase by 20 pence from £6.50 to £6.70 per hour.
  • For 18 – 20 year olds, the rate will increase by 17 pence from £5.13 to £5.30 per hour.
  • For 16 – 17 year olds, who are above school leaving age but under 18, the rate will increase by 8 pence from £3.79 to £3.87 per hour.
  • For apprentices under 19 or 19 or over who are in the first year of their apprentices, the rate will increase by 57 pence from £2.73 to £3.30 per hour.
  • The accommodation offset increases from the current £5.08 to £5.35.

It is important to note that these rates apply to pay reference periods beginning on or after 1st October 2015.

Employers should check their employees are receiving the new increased wage or risk being prosecuted by HM Revenue & Customs.

From April 2016, the Government will introduce a new mandatory National Living Wage for workers aged 25 years and above, initially set at £7.20.

Agency workers: EAT considers the scope of the right to be informed of vacancies

The EAT has upheld a tribunal’s decision that the scope of regulation 13, Agency Workers Regulations 2010 is limited to providing agency workers with a right to be informed of vacancies within the end user company. It rejected arguments that agency workers were entitled to be afforded equal status with comparable permanent employees in being considered for a vacancy.

In dismissing the appeal, the EAT declined to make a reference to the European Court of Justice regarding the interpretation of the Temporary Workers Directive. The EAT held that there was no basis for anything other than a straightforward reading of the legislation.

HMRC rewrites employee travel tax and NICs guide

HMRC has published a revised version of Guidance 490, HMRC’s guide to the tax and NICs consequences of employee travel expenses. This follows a recommendation of the Office of Tax Simplification.

While there are a significant number of changes (including new and amended examples), most are aimed at making the guide easier to read and navigate. There are, however, some substantive amendments, including the following:

  • New guidance on the temporary workplace rules, including when attendance is for a limited duration or for a temporary purpose, with specific guidance for long construction projects and homeworkers.
  • Express confirmation that non-executive directors, as office holders, are subject to the same travel rules as employees. Also, express confirmation that the term “travel expenses” includes subsistence expenditure and associated costs incurred in making the journey. This is helpful given the legislation does not make this clear.
  • Practical guidance on the NICs treatment of round sum allowances.

The revised guidance does not reflect the Finance Act 2015 changes to the benefits regime that are to take effect from April 2016 (particularly the exemption for qualifying business expenses and abolition of dispensations).

Follow the link to access the guidance –

https://www.gov.uk/government/publications/490-employee-travel-a-tax-and-nics-guide

Managers – you decide

Disciplinary investigation heavily influenced by HR led to unfair dismissal

The EAT has allowed an appeal against the decision of an employment judge that an employee had been fairly dismissed in circumstances where the investigating officer’s recommendations had been heavily influenced by input from Human Resources. The investigating officer’s report originally recommended a finding of misconduct and a sanction of a written warning, but after numerous comments and amendments by HR, the final report found the employee to have committed gross misconduct, and recommended immediate dismissal. The employment judge had failed to apply the decision of the Supreme Court in Chhabra v West London Mental Health NHS Trust [2013] UKSC 80, which set out guidelines on the role of HR in disciplinary investigations. In particular, HR’s advice should be limited essentially to matters of law and procedure, as opposed to questions of culpability, which are reserved for the investigating officer.

The EAT set aside the finding on unfair dismissal, and remitted the case to be re-heard by the same employment judge in light of Chhabra.

Service provision change: employees temporarily laid off may still be part of an organised grouping

Employees temporarily laid off work at the time of a service provision change could still be part of an organised grouping of employees and transfer to the subsequent contractor. Remitting a case back to the employment tribunal, the EAT held that a temporary absence from work, or cessation from work, did not in itself deprive employees who had been involved in the relevant activities of their status as an organised grouping of employees. Whether or not this was the case was a straightforward question of fact to be determined by the tribunal and the temporary cessation of work was only one of the factors it should take into account. There was nothing in regulation 3 of the TUPE Regulations or in the case law authorities which required the organised grouping of employees to be actually engaged in the relevant activities immediately before the transfer.

The EAT considered that when construing the service provision change provisions in TUPE, regard should be had to the purpose of the regulations which were introduced to provide protection to employees.

Employee who was permanently incapacitated was not “assigned” to a grouping for TUPE purposes

The EAT has found that an employee who had been off work for six years and had no prospect of returning to work was not “assigned” to an organised grouping for TUPE purposes. The employee’s only connection with the grouping was administrative: he remained “on the books” so that he could continue to receive permanent health insurance.

The EAT distinguished this case from scenarios where employees are on maternity leave or long-term sick leave at the time of the TUPE transfer. In those cases, the absence could be temporary, depending on the facts in question.

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About the author

Partner and solicitor within the employment team, Simon also leads the firm's cross departmental Social Housing Practice Group