The National Minimum Wage (NMW) regulations require employers to pay the NMW for all hours worked. This includes certain types of travel time:

1. Travel between job sites: Travel time between different job locations during the workday is considered working time and is included in calculating whether the worker has been paid at least the NMW.  
2. Travel for job-related duties: Travel during the workday, such as travel to attend work meetings, is also included in working time.
3. Exclusions: Travel time between home and the first/last work location of the day is generally not considered working time for NMW purposes.

Case facts

In Taylor’s Services Ltd v HMRC, Taylors Service Ltd (trading as Taylors Poultry Services) were in the business that involves the provision of labour to poultry farms around the country. They engage workers under ‘zero-hours’ contracts and supply them to poultry farms to carry out work such as catching poultry, providing injections, grading, loading and unloading poultry. The zero-hours workers were picked up by Taylors Services’ minibus from their home addresses and taken to the relevant sites. Sometimes those journeys could be very long, up to four hours each way. Therefore on some days, the workers would be travelling for up to 8 hours on top of a ‘normal’ working day.  

HMRC issued a notice of underpayments of NMW to Taylors Services, concluding that the time workers spent travelling on the minibus to and from their home addresses to the various farms should be considered when calculating whether the workers have been paid the NMW. 

The Employment Tribunal agreed with this position. Taylors Services appealed the judgment. 

Employment Appeal Tribunal (EAT) conclusions

The EAT disagreed with the Employment Tribunal’s conclusions and upheld the appeal.

The EAT held that time spent travelling between home and the first/last work location of the day is not ‘work time’ for the purposes of the NMW regulations unless there is ‘work’ being done while travelling - such as someone working on documents or undertaking business meetings while on the train or in a car. 

It should be noted that the EAT commented that the conclusion would have been different if the workers were required to attend Taylors Services’ premises first rather than being picked up from their home – then, the subsequent travel time would be deemed by the NMW regulations to be ‘work time’ and would need to be included in calculating whether the worker has been paid the NMW.

In its judgment, the EAT acknowledged that the conclusion reached might be thought to create injustice, in part because of the length of journeys in question, but also because the workers' entitlement to the NMW during those journeys depends on whether the employer requires the workers to be collected from, and returned to home, or whether the employer requires them to come to its premises first. However, the EAT made clear that this is a matter for the legislature to deal with, and the court’s role is to properly represent the law as currently drafted. 

For further details of the case and the conclusions reached refer to the full judgment here.

It should be noted that this case is related to the NMW regulations and the position is different under the Working Time Regulations (WTR). Time spent travelling to and from a worker's usual place of work (e.g. a regular office) is generally not considered working time and is not covered under the WTR. For peripatetic workers (those who travel to different locations as part of their job and do not have a fixed place of work), the time spent travelling from their home to the first work location or workplace of the day, and from their last work location or workplace back home, is considered working time under the WTR. This will be relevant when determining what rest periods workers are entitled to or the amount of holiday they accrue.

Learnings for employers

Navigating NMW compliance (and WTR compliance) can be challenging and the issue of travel time is one of the most common risk areas. The key learnings from this case related to travel time are: 

• You do not have to include commuting time in NMW calculations where the worker travels between home and the first/last work location.
• You do have to include, for NMW calculations, travel time between the different work locations including where the worker attends a hub/base first, and then travels from there to their subsequent work location.
• The NMW regulations are different from the WTR. Under the WTR the time spent travelling from home to the first work location, and from the last work location back home, is considered working time for peripatetic workers.

In light of the above, we would advise a review of any employment documentation to ensure that contracts, policies and procedures align with the legal position, and clearly define compensable travel time to avoid any confusion or legal challenges. 

In our experience, the other most common risk areas for underpayment breaches include incorrect determination of work type, deductions from pay including administration charges, clothing deductions, costs incurred by workers, unreimbursed travel expenses/costs incurred by workers, unpaid working time at start or end of shifts, eg, for handovers, and salary sacrifice (including pensions). We encourage you to ensure you understand these aspects of your pay arrangements to prevent potential legal and financial repercussions. 

How we can help

The risks of non-compliance are potentially higher at present with the number of HRMC inspections increasing and many employers managing significant workplace changes since the pandemic. In this challenging climate we can help by:

• Conducting a light-touch HMRC-style review to identify any risk areas; 
• helping you develop policies and practices that remove the risk of non-compliance in a financially sustainable way; and
• representing you during the HMRC investigation. Recently, we were able to assist a client in the care sector in defending their position in relation to allegations of unpaid travel time and mileage expenses.

For more information or advice, please contact me.