The Court of Justice of the European Union (CJEU) released a judgment 10 September 2015 concerning whether or not travel time may be deemed working time. This decision may have significant implications for employers and employees and in this release we consider the impact for employers on managing working time and employee pay.
Background
The case in question (the Tyco Case C-266/14) concerned a Spanish business that was engaged in the installing and maintaining of security systems. Whilst the head office was based in Madrid, the company had technicians scattered throughout the country who would not have had an office in their area. In the morning, these employees would travel directly from their homes to customers for installing and maintenance purposes and in the evening they would travel directly home. The employees sought to argue that the time spent travelling to their first appointment and travelling from their last appointment was in fact “working time”.
CJEU Decision
The CJEU has agreed with the employees and has clearly stated that “where workers… do not have a fixed or habitual place of work, the time spent by those workers travelling each day between their homes and the premises of the first and last customers designated by their employer constitutes working time…”
The reason for this decision is based on the three essential requirements for working time; namely that the employee (a) is at their workplace and (b) is at their employer’s disposal, and (c) is carrying out activities for their employer. The CJEU decided that the employees in question met all three requirements when travelling to and from their first and last appointments as they don’t have a fixed workplace and the time spent travelling is for the purposes of completing work at the behest of their employer.
What is a Fixed or Habitual Place of Work?
Importantly, this decision is limited to employees who “do not have a fixed or habitual place of work” and as such it relates to field-based or peripatetic employees who do not normally work from company office. Therefore, an employee who works in their company’s office cannot argue that their daily commute to and from work is actually working time.
Will this Decision Apply to Ireland?
Any CJEU decision is automatically applicable in the public sector in Ireland due to EU rules. Therefore, this decision will automatically apply to public sector employees.
However, this is not necessarily the case for private sector companies. Essentially, if Irish legislation (in this case the Organisation of Working Time Act and the National Minimum Wage Act) fall in line with the CJEU decision then the decision will apply to the private sector. However, if Irish legislation is inconsistent with the CJEU decision then the Irish legislation will continue to apply as normal in the private sector until such time as the legislation is updated (a good example of this is where the CJEU ruled in 2009 that employees will accrue annual leave on sick leave but this did not actually come into effect in the private sector in Ireland until this August 2015 when the legislation was finally updated).
We consider this further below.
How Might this Impact Woking Time Rules in Ireland?
Irish Working Time Regulations state that the general rules on working time in terms of daily rest periods, rest breaks at work, weekly rest periods and nightly working hours do not apply to employees who are “regularly required by the employer to travel distances of significant length, either from his or her home to the workplace or from one workplace to another workplace.” It would seem that this Irish provision is inconsistent with the CJEU decision and as such it would appear that the CJEU decision will not apply in Ireland in terms of daily rest periods, rest breaks at work, weekly rest periods and nightly working hours. However, it is distinctly possible that the CJEU decision will be applicable in respect of the 48 hour maximum working week.
Unfortunately we will not be able to provide absolute clarity on this until a dispute on the subject comes before the Labour Court.
Will Employees Have to be Paid for this Travel Time?
This decision relates to “working time” and did not concern the payment of wages. As such, the CJEU decision did not address the question of payment for this travel time. In any event, it seems highly unlikely that employees in Ireland will have to be paid for this travel time. The reason for this is because this area is governed by the National Minimum Wage Act which clearly states that working hours for minimum wage purposes does not include “time spent on travelling between an employee's place of residence and place of work and back.”
Therefore, it would likely require an amendment to the National Minimum Wage Act for employees to become entitled to payment for this travel time. However, we will have to await any decision of the Labour Court in this respect to get absolute clarity.
Additional Considerations
Employers should consider how many field based employees in their organisation may be affected by this judgment and should update their practices accordingly. Should this decision become applicable in Ireland in terms of all working time and minimum wage considerations then employers may find themselves faced with an expensive tribunal claim.
An employer is also required to specify an employee’s entitlement to rest periods in the employee’s terms and conditions of employment. Therefore, employers are advised to review their contractual policies and ensure that they are suitable in line with the above. This may involve specifying in an employee’s contract that this travel time is deemed working time.
There is a risk that employees will take the “scenic route” to and from work to maximise their working time. This is particularly a risk should it be deemed that payment is required for this travel. As such, employers may wish to update their disciplinary policy to account for this type of misconduct.
Importantly, employers should always seek advice before changing any terms and conditions of employment.
If you have any questions in respect of this article and the recent changes then please contact one of our dedicated employment law specialists 24 Hours a day on 01 855 50 50.
