How Does The Case Of Taylor’s Services Ltd v HMRC Impact The Payment Of The National Minimum Wage?
Author: Sam Evans
Key Contact: Chris Aldridge
Background
Taylor’s Services Ltd (“Taylors”) employs numerous workers on zero-hours contracts in the poultry industry and pays them the national minimum wage (“NMW”). As part of their role, they are required to travel to various poultry farms by minibus from their home addresses to carry out work such as catching and unloading poultry. Under the terms of their employment contracts, the workers were given the right to a payment for their travel time, albeit this was not ‘normally payable’. These journeys could be significant- sometimes up to four hours each way- in addition to their normal working hours.
In 2020, HMRC issued a notice of underpayment to Taylors on the basis that the time workers spent travelling to and from the farms on the minibus was time that should have been remunerated under the NMW. Following receipt of the notices, Taylors appealed to the Employment Tribunal, who dismissed their appeal and upheld the notices. The Employment Tribunal based its reasoning on the fact that such travelling was not merely “ordinary commuting” but an intrinsic part of the role.
Judgment
Taylors then sought to appeal and argued that when the workers travelled by minibus from their homes to their first place of assignment (and back), they were not engaged in “time work” within the meaning of regulation 30 of the National Minimum Wage Regulations 2015 (“the 2015 Regulations”). These are the regulations which set out the circumstances when a person is entitled to be paid the NMW. The Employment Appeal Tribunal (“EAT”) considered this question as well as when work related travel would fall within regulation 30 of the 2015 Regulations.
Ultimately, the Employment Appeal Tribunal (“EAT”) concluded that Taylors did not need to pay the NMW for the time spent travelling by minibus from the workers’ homes to their first place of assignment and their return home. In the view of the EAT, the workers were not ‘working’ for remuneration purposes in any normal sense- they were free to talk, sleep, read, watch films or even apply for other jobs! The EAT reached this conclusion by considering earlier cases concerning whether night-time sleep-in shifts could be considered ‘time work’ for the purposes of the 2015 Regulations. The EAT was keen to stress, as the Supreme Court was in the earlier case of Royal Mencap Society v Tomlinson, that just because a worker was acting under their employer’s instructions, this did not entitle them to a wage (another example would be when they travelled from their home to work). However, the EAT noted that there were certainly circumstances when travelling could count as ‘time work’- such as working on documents while travelling or undertaking business meetings- just that the present case did not qualify for this protection.
However, a key takeaway is that, in the view of the EAT, the NMW would be payable once they had arrived at work and then travelled to a place of assignment. The EAT acknowledged that this may lead to injustices where lengthy periods of travel are not remunerated but that was ultimately a matter for parliament to consider.
Comment
In terms of practical steps, employers should always ensure that any contracts for workers or employees comply with the NMW legislation, including when travel time is involved. It is also crucial to clearly define, as far as possible, travel time which will be compensated to avoid any confusion or legal challenges. In reality, the facts of this case are quite unique (a point acknowledged by the EAT) and so its relevance may not extend far beyond the agriculture sector which require workers to engage in lengthy travel time through transport provided by their employer.
It is also worth remembering that the new government has previously stated in its ‘Make Work Pay’ policy document for employment law that it would work alongside HMRC to ensure the NMW regulations on travel time in sectors with multiple working sites are enforced (such as those in the agriculture industry).
If you would like to seek expert advice about the national minimum wage and travel time, then please don’t hesitate to contact Acuity Law’s Employment team.