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The working time directive and its impact on pay – Michael Thomason

 

I’m sure most people are well aware of the recent ruling by ‘The Court of Justice of the European Union’ (CJEU) relating to the EUs working time directive but as I’ve had a couple of my clients ask me about it I thought it may be appropriate to qualify two main points: the requirement of the directive and its impact on pay, especially in light of the National Minimum Wage (NMW).

The ruling states, "If a worker who no longer has a fixed place of work is carrying out his duties during his journey to or from a customer, that worker must also be regarded as working during that journey."

It continues, "Requiring the worker to bear the burden of their employer’s choice would be contrary to the objective of protecting the safety and health of workers pursued by the directive, which includes the necessity of guaranteeing workers a minimum rest period."

The ruling applies to all workers with no fixed office, which will usually include sales professionals, care workers and some field based engineers. For this group time spent travelling to work should be counted as working time under the European Union’s Working Time Directive (WTD) rules.

The ruling does not impact on those with long commutes to fixed work places.

The impact of the WTD will affect those of us involved in the sales arena where we are dealing with salaried professional sales personnel. The NMW aspect may have further ramifications for engineers and other workers who are paid an hourly rate, there are also further considerations relating to the Working Time Directive that may affect this second group.

The EU’s Working Time Directive (2003/88/EC) requires EU countries to guarantee the following rights for all workers:

a limit to weekly working hours, which must not exceed 48 hours on average, including any overtimea minimum daily rest period of 11 consecutive hours in every 24a rest break during working hours if the worker is on duty for longer than 6 hoursa minimum weekly rest period of 24 uninterrupted hours for each 7-day period, in addition to the 11 hours' daily restpaid annual leave of at least 4 weeks per year

It is worth bearing in mind that time spent entertaining customers on a charity golf day on the weekend, or over dinner in the evening will count as working time.

Exhibitions are also an area to be wary of; time travelling to the event and being on the stand can easily exceed the limits and there will be a case that time spent in the evening at a hotel would be working time, especially if it’s not practical for staff to get home.

That covers most of the requirements as Insofar as salaried sales people are concerned. If you have engineers on call out etc., further rules may apply:

extra protection for night work, e.g.

average working hours must not exceed 8 hours per 24-hour period,night workers must not perform heavy or dangerous work for longer than 8 hours in any 24-hour period,night workers have the right to free health assessments and, under certain circumstances, to transfer to day work.

Insofar as pay is concerned there are actually no ramifications, the directive is only concerned with time spent at work, rest periods and paid holiday.

The Working Time legislation does not require working time to be paid. This is an entirely separate issue which is governed by the contract of employment and national legislation - including, in the UK, the National Minimum Wage (NMW) legislation. Indeed, the CJEU expressly stated in its decision that it is for national legislation to determine whether or not this travelling time - or, indeed, any other category of working time - is paid or unpaid.

Under the UK's National Minimum Wage Act and Regulations, the general position is that travel time between home and a place of work is excluded from the obligation to pay the NMW, including for mobile workers; this has also been backed up by case law.  There is no connection between the WTD and the NMW legislation. The NMW is unaffected by this decision.

Where the NMW legislation expressly excludes travel time between home and places of work from the minimum wage, these exclusions still apply and are unaffected by this case.

If travelling time is currently unpaid under the NMW legislation, it will remain unpaid.

Many of the considerations regarding pay will be dependent on the specific wording of each employee’s contract.

There may be arguments that it requires the worker to be paid for all "hours of work", including those taken up by this form of travel time. Another argument could be that this time effectively uses up the normal hours of work, and means that overtime rates are triggered during what are currently treated as standard working hours. Claims could then be made for retrospective payments - for example, breach of contract claims or unlawful deductions from wages.

These arguments may make little progress but could cause companies some time and money in legal consultation and it may be best to review contracts sooner rather than later for those affected; unions wouldn’t be doing their job if they didn’t challenge in these areas and seek some trade-off for their members.

The simple resolution to all of the above is to have your staff “opt out.” Should they do so they can work as many hours as they choose.

The things to be aware of are:

  • The opt-out must be voluntary
  • The opt out must be in writing
  • The employee has the right to rescind their opt out at any time

We are seeing some initial impact on recruitment.  There is a lot more focus on sales people living in the area they are to cover, ideally they need to be within the optimal part of that area – sadly sometimes at the expense of very good candidates who are on the edge of a border or ten miles off  area.

I’m also aware of one large engineering company I deal with being challenged along the lines of overtime being triggered by travelling time.

As always, if in doubt, ask a consultant! http://www.iridiumconsultancy.com

 

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