2015 - ECJ Working Time Case - What about Travel Expenses?

Rhian Lloyd, Employment Tax and HR Manager at Aspire Business Partnership LLP considers the wider ramifications of the recent European Court of Justice ('ECJ') decision on the travel time of peripatetic workers in regard to claiming travel expenses;

Summary of ECJ Case

On 10^th September 2015 the ECJ confirmed the Advocate General’s opinion (made on 11^th June 2015) that time travelling to and from work does constitute working time where workers do not have a fixed or habitual place of work.

The ECJ took the view that the workers are at the employers’ disposal for the time of the journeys. This is on the basis that during the journey the worker is acting on the instructions of the employer and are therefore not able to use that time freely and pursue their own interests. In this case travelling is an integral part of being such a worker and so, the place of work of that worker cannot be reduced to the physical areas of his work on the premises of the employer’s customers. In this particular scenario the employer had decided to abolish the regional offices.  The fact that the workers begin and finish the journeys at their homes stems directly from the decision of their employer, not from the desire of the workers themselves.

Travelling must be regarded as working time and the employee must be remunerated accordingly, however the employer is not required to count this as ‘time work’ for NMW purposes yet (until the current NMW legislation is challenged in the courts at a future time).

Can Workers claim travel expenses for the initial and final journey?

Historically, mobile workers have not been able to claim travel expenses incurred between home and their first call of the day and the last call of the day and home.  This is because it was considered that the “performance of the duties of the employment” only commenced when they reached their first client and equally, ended when they left their last client. 

The ECJ ruling changes this, clarifying that if a mobile worker is at the disposal of their employer from the time that they leave home until they later return home then they are performing the duties of their employment throughout.  Accordingly, they will be entitled to claim a deduction from earnings in respect of expenses that they incur during this travel.     

Although the ECJ decision was based on a particular group of workers the detail of the case appears relevant to many employees who have no set place of work and travel to a series of temporary workplaces during the course of their working day.

Conclusion

As a result of the ECJ decision employers must start paying peripatetic workers for their travelling time to and from home, albeit this does not count as time work for NMW purposes.  Some of the additional costs can be mitigated by the ability of the workers to claim expenses, such as mileage and subsistence. By doing so, taxable pay would be lowered and less Employer’s NI would be due.