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Should employees’ travel time be counted as working time
PRACTICE AREA GROUP: Employment, Pensions and Benefits
The Court of Justice of the European Union (the “CJEU”) has decided that in certain cases, it should. In the case of Federacion de Servicios Privados del sindicato Comisiones Obreras v Tyco Integrated Security SL and another released in recent days, the CJEU ruled that, in the case of an employee with no fixed or habitual place of work, travel time between the employee’s home and the first and last customer each day should be counted as “working time” for the purposes of the European Union’s Working Time Directive (the “Directive”).
As a result of this decision, employers of a certain category of worker could be exposed to increased employment costs or the risk of claims for alleged breaches of working time legislation in relation to maximum weekly working hours, and holidays, by reference to the hours worked by an employee.
Summary of the CJEU’s decision
The case was brought by a Spanish trade union against Tyco, an international provider of fire protection and security systems. The action was prompted by the closure of Tyco’s regional offices in Spain in 2011, as a result of which the employees no longer had a fixed place of work and were required to travel every day from their homes to the premises of their customers, where they installed or maintained security equipment. Tyco treated this travel time as a “rest period”.
The Directive provides that “working time” is the time in which the worker is (i) working, (ii) at the employer's disposal and (iii) carrying out their activities and duties. The CJEU was satisfied that all three elements were present in this case.
It noted that, following the closure of the regional offices, the nature of the employees’ journeys to / from the customer locations had not changed; only the departure point of those journeys changed and it was therefore satisfied that the employees were carrying out their duties during the travel time. It also took the view that as the employees were only informed of their customer locations and tasks a few hours before their appointment, they were not able to use their time freely and pursue their own interests during that travelling time and were, consequently, at their employer’s disposal during that journey. Finally, the CJEU was satisfied that if an employee who no longer has a fixed place of work is carrying out his duties during his journey to or from a customer, that employee must also be regarded as working during that journey. In reaching its decision, the CJEU had regard to the objective of the Directive, which is designed to protect the health and safety of employees by guaranteeing minimum rest periods and maximum working time.
Who does this decision affect and what does it mean?
As the Directive requires all EU countries to guarantee minimum standards in respect of working hours and rest breaks, this decision could have substantial implications for multinational companies with operations in Ireland and throughout the European Union ("EU”), that engage employees who do not have a fixed or habitual place of work, and where travel between their homes and customer locations is an integral part of their job. Examples include sales representatives, field engineers / technicians, home-care workers, etc. It is also quite common for international employers in the course of setting up Irish operations to have their first one or two employees use their home as their base while they identify suitable premises. This decision will apply equally to such employees.
Implications for employers in Ireland
In Ireland, the provisions of the Directive are implemented by the Organisation of Working Time Act 1997 and the statutory instruments that supplement it (the “Irish Legislation”). The Irish Legislation expressly excludes activities in which a mobile employee (which definition would seem to include employees within the scope of the Tyco case) is 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 from the employee’s entitlement to a daily rest period of 11 consecutive hours in any 24 hour period or daily and weekly rest and interval breaks at work. In this regard, the decision is contrary to the provisions of the Irish Legislation in relation to daily rest, rest and intervals at work and weekly rest periods. However, it does not exclude such travel time from working time for the purposes of the 48 hour working week restriction or the calculation of annual leave.
The decision is not, therefore, as material for Irish employers as other EU employers in respect of rest period requirements. However, this decision may result in potential breaches of the Irish Legislation by employers, who engage employees without a fixed base, when calculating the weekly working hours and work schedules of such employees. The Irish legislation imposes a maximum average working week of 48 hours. Employees in Ireland, unlike their UK counterparts, are not entitled to opt out of the maximum 48-hour working week. Our closest equivalent provision allows certain employees to acknowledge that the relevant restrictions do not apply to them to begin with, where by virtue of their seniority or specialist role, they are responsible for determining their own working time. On this basis, employers in Ireland should be particularly mindful of their employees’ working time to ensure compliance with the provisions of the Irish Legislation.
Irish courts are required to interpret national legislation, which implements a directive of the EU, in accordance with EU law to the extent possible. As this decision is inconsistent with the provisions of the Irish Legislation, an amendment to the Irish Legislation may be required to bring Irish law into line with EU law in due course. This position is analogous to the recent amendments made to Irish legislation in respect of the accrual of annual leave during sick leave in order to implement the CJEU decisions interpreting the annual leave provisions of the Directive in the cases of Stringer / Schultz-Hoff. A similar approach may be required in order to address the discrepancy between the Tyco case and the Irish Legislation.
While this decision impacts on the definition of working time for the purposes of the working time legislation, it may also give rise to claims by employees with no fixed or habitual place of work for alleged breaches of the national minimum wage legislation, when calculating their average hourly pay under such legislation. In light of the proposed increase in the national minimum wage rate in Ireland to €9.15 per hour with effect from January 2016, this could expose employers to further employment costs.
Employers may also face industrial relations issues or grievances by employees seeking to have the recent CJEU position implemented.
We recommend that employers with operations in Ireland take the following steps:
- Review their practices to identify and quantify the potential risks in respect of their employees who do not have a fixed place of work and who travel between their homes and customer locations during the course of their work if not already treating this time as working time;
- Take advice in relation to their particular circumstances to determine whether they come within the scope of the CJEU’s decision;
- Take this opportunity to review their contracts and employee handbooks in relation to working time, rest periods and breaks to ensure compliance with national legislation; and
- Ensure their employees’ working time, including the travel time of employees with no fixed base, is accurately recorded.
Written by Geraldine Carr, Associate, Employment Group