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In November 2014 we highlighted the implications for Employers in respect calculating holiday pay for employees following the European Court of Justic (ECJ) ruling in the Lock vs Britsh Gas and the Bear Scotland vs Fulton case heard at the Employment Appeal Tribunal (EAT).
In the Fulton case the EAT ruled that " Article 7 of the Working Time Directive is to be interpreted such that payments for overtime which the employees in two appeals before it were required to work, though which their employer was not obliged to offer as a minimum, is part of normal remuneration and to be included as such in the calculation of pay for holiday leave taken under regulation 13 of the Working Time Regulations 1998. Those Regulations could be interpreted so as to conform to that interpretation."
Noteably, in considering the cross appeal in the Hertal and Amec cases, the EAT ruled that taxable remuneration for time spent travelling to work did fall within “normal remuneration” for the purpose of calculating holiday pay.
Whilst the rulings noted above helped clarify matters in respect taxable remuneration for time spent travelling to work, and therefore how holiday pay needs to be calculated, it didn't address the issue of 'working time itself' in the context of the Working Time Directive (2003/88/EC) and/or the National Minimum Wage (NMW).
The decision by the ECJ that peripatetic workers' travel time to first and last customers of the day is "working time", has followed the Advocate General's opinion by finding that the time spent by workers, who do not have a fixed or habitual place of work, on travelling each day between their homes and the premises of the first and last customers designated by their employer is "working time" for the purposes of the Working Time Directive (2003/88/EC).
Anthea McIntyre, a Conservative MEP, was quoted as saying: “This could add significantly to the costs of businesses and interfere with long-established business practices. It could hit smaller firms particularly and that would be bad for growth and bad for jobs."
This decision will have a significant impact on the current trend for companies wanting to move from office-based businesses to more mobile ones, as the time spent by carers, plumbers, joiners, and other home based workers will now count towards the 48 hour week and may require Employers to increase wages to avoid breaching National Minimum Wage legislation and/or give workers more breaks.
To ensure compliance, Businesses will now need to review their contracts of employment, and in particular their arrangements in respect the 48 hour limited set out by the WTR 1998.
EmployEasily Legal Services offer a FREE audit service to Employers, and can help them ensure their existing terms and conditions of employment are fully compliant with current UK employment laws. To arrange your free audit Contact Us today via our website or call us on 0800 612 4772.