Case update: travel time and National Minimum Wage
Many employers in the social care sector will be interested in the recent decision of the Court of Appeal in the case of Commissioners for HM Revenue and Customs v Taylors Services Ltd. The case provides a reminder that pay for travel time at National Minimum Wage (NMW) rates is generally only required once the worker has arrived at the workplace or is travelling between work assignments – not for standard commutes from home.
The case in brief
TS Ltd employed workers on zero-hour contracts to work at poultry farms across the UK, providing a minibus to transport workers directly from their homes to the farms. Travel times were often extremely long, sometimes requiring several hours each way on top of normal working hours. Workers were paid £2.50 per hour for their travel time, significantly below the NMW rate. In 2020, HMRC intervened, deeming that the travel time should be paid at NMW rates. HMRC issues notices of underpayment totalling approximately £62,000 in wage arrears and penalties.
TS Ltd challenged these notices at an employment tribunal, arguing that the travel time was not “time work” under the NMW Regulations. The case proceeded to the Employment Appeal Tribunal (EAT) and later the Court of Appeal, along a somewhat complex legal journey.
Key legal questions
The primary issue in the case was whether the time that workers spent traveling to and from assignments counted as “time work” under the NMW Regulations. The outcome hinged on two particular sections of the NMW Regulations:
- Regulation 30: This provides the primary definition of “time work” for activities that must be paid at least the NMW.
- Regulation 34: This provides further guidance on whether travel time is treated as “time work,” including specific exclusions for travel between a worker’s home and their place of work.
The question was whether travel in the circumstances of the case fell under these definitions.
Court decisions
The employment tribunal agreed with HMRC, ruling that, while the workers were not actively performing their job duties while traveling, the high level of control TS Ltd exerted over their travel (such as arranging transport, setting schedules, and dictating routes) meant that the travel time qualified as “time work” under Regulation 30.
The case was appealed to the EAT, which overturned the tribunal’s decision on Regulation 30. The EAT emphasized that time spent “just” traveling is not considered time work under the NMW Regulations unless Regulation 34 specifically deems it as such. Regulation 34 makes it clear that travel to and from a worker’s home and their first or last place of work is generally excluded. While the situation in this case might seem unusual, given the excessive travel times involved, the EAT stressed that the NMW rules do not distinguish between standard commutes and longer journeys. The Court of Appeal upheld this position, affirming that the workers’ travel did not qualify as time work under either Regulation 30 or 34.
The Court acknowledged the perceived unfairness in how the system works. For example, if TS Ltd had required workers to travel first to a central depot or employer premises before starting their assignment-related travel, this travel might have qualified as time work under Regulation 34. However, the Court emphasized that addressing any anomalies in the law was a matter for Parliament, not the judiciary.
Nation minimum wage v Working Time Regulations
It is important to distinguish the treatment of travel time under the National Minimum Wage Regulations from its treatment under the Working Time Regulations 1998 (WTR). While the NMW rules focus on ensuring workers are properly remunerated for hours defined as “time work,” the WTR govern broader issues like working hours, rest breaks, and maximum working time for health and safety purposes. Under the WTR, peripatetic workers (such as social care staff who travel between assignments) may find that certain travel – such as driving from home to a first assignment or between client visits – is counted as “working time.” However, this does not guarantee payment for that time unless it qualifies as time work under NMW rules. Employers therefore need to ensure compliance with both frameworks, which serve distinct purposes.
Implications for social care providers
In light of this case, social care providers managing mobile workers should:
- Review travel pay arrangements to ensure they comply with NMW rules. Travel to and from a worker’s home and their first or last assignment is unlikely to qualify as time work unless specific conditions are met (e.g., travel from an employer’s premises).
- Ensure that travel time is properly accounted for under WTR when calculating working hours, planning shifts, and scheduling rest periods to avoid breaching health and safety regulations.
- Check that employment contracts clearly distinguish between paid time work, unpaid travel time, and obligations under both NMW and WTR rules. Open communication with workers about these rules can help manage expectations and mitigate potential disputes.
This case adds to the growing body of case law on the subject of travel time. Social care providers must navigate the WTR and NMW Regulations carefully, ensuring that both payment compliance and working time limits are appropriately managed for their mobile workforce. By better understanding these rules and planning accordingly, care providers can protect themselves against legal challenges while maintaining fair and transparent practices with their employees.
Contact us
Julia Gray is an associate in our employment law team. If you have any questions about any of the issues covered in this article, or need legal advice, please get in touch with the team today.