Commissioners for HM Revenue and Customs v Taylors Services Ltd & Ors

Factual and Procedural Background

This appeal concerns the interpretation of regulations 30 and 34 of the National Minimum Wage Regulations 2015 ('the Regulations'), made under the National Minimum Wage Act 1998 ('the Act'). The issue was whether time spent by workers travelling between their homes and farms where they worked as flock technicians constituted 'work' for which they should be paid the National Minimum Wage ('NMW'). HM Revenue and Customs ('HMRC') issued notices assessing the employers ('the Respondents') liable for arrears and penalties related to this travel time.

The Respondents appealed these notices to the Employment Tribunal ('ET'), which held that the travel time was payable as work and upheld the notices. The Respondents then appealed on a point of law to the Employment Appeal Tribunal ('EAT'), which reversed the ET's decision, holding that travel time was not payable as work under the Regulations. HMRC obtained permission to appeal the EAT's order to the current court.

One Respondent company had been dissolved prior to the EAT hearing. The other Respondents included two individuals trading as a company, represented by counsel at the EAT but not at this appeal. HMRC was represented by counsel new to this appeal. The court thanks all parties for their submissions.

Legal Issues Presented

1. Whether time spent travelling from home to the first assignment and back constitutes 'time work' under regulation 30 of the Regulations.
2. Whether regulation 34, which deems certain travel time as time work, applies or excludes such travel time in this context.
3. Whether the Employment Tribunal erred in law by considering regulation 30 in isolation without properly applying regulation 34.
4. Whether the Employment Appeal Tribunal misinterpreted the meaning of 'time work' and the relevant Regulations.
5. Whether the factual findings of the Employment Tribunal regarding the nature of travel time as work should be disturbed.
6. Whether there exists a potential anomaly or injustice arising from the Regulations' treatment of travel time in this case.

Arguments of the Parties

HMRC's Arguments

• The EAT failed to give regulations 30 and 34 a purposive construction as required by precedent, notably Uber BV v Aslam.
• The EAT wrongly applied the reasoning in Royal Mencap Society v Tomlinson-Blake, which relates to sleep-in workers, not travel time.
• The EAT erred in holding that travel time was not 'time work', especially considering the control the Respondents exercised over travel arrangements.
• The EAT wrongly interfered with the ET's factual findings that the workers were doing 'time work' during travel.
• At the ET, HMRC contended that the travel in this case was more onerous and controlled than ordinary commuting, warranting payment under the Regulations.
• HMRC argued that the Regulations should not permit employers to avoid paying for long travel times by providing transport from workers' homes.

Respondents' Arguments

• The travel time was not 'time work' under regulation 30 because the workers were not performing actual work during travel.
• Regulation 34 excludes travel between home and place of work from being treated as time work even if travel is for work purposes.
• The ET correctly found that the workers' travel time did not meet the criteria to be treated as time work under the Regulations.
• The Respondents relied on the EAT's interpretation and the Supreme Court's decision in Mencap to support their position.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Uber BV v Aslam [2021] UKSC 5	Requirement for purposive construction of employment-related regulations.	The court noted HMRC's argument that the EAT failed to apply a purposive approach consistent with Uber, but ultimately held the Regulations' clear wording must be given effect.
Royal Mencap Society v Tomlinson-Blake [2021] UKSC 8	Definition of 'time work' and that sleep-in time does not constitute work unless awake and working.	The court applied Mencap as binding authority, extending its reasoning to travel time, confirming that time spent sleeping or simply travelling is not 'work' under the Regulations.
Autoclenz Limited v Belcher [2011] UKSC 41	Assessment of contractual realities in employment relationships.	Referenced by HMRC at ET to argue the true nature of the contract and travel obligations, but not determinative in this appeal.
British Nursing Association v Inland Revenue [2002] EWCA Civ 494	Previously authoritative on sleep-in workers' pay, questioned in Mencap.	Discussed in Mencap and noted as no longer authoritative; the court followed Mencap's updated approach.

Court's Reasoning and Analysis

The court began by emphasizing that the Regulations must be read as a whole, particularly regulations 30, 34, and 20, to understand the concept of 'time work' and how travel is treated. Regulation 30 provides the primary definition of 'time work' as work paid by reference to time, but it must be actual work. Regulation 34 is a deeming provision that treats some travel time as time work only if two cumulative conditions are met: the travel is for the purposes of time work and occurs at a time when the worker would otherwise be working.

The court rejected HMRC's argument that the EAT failed to apply a purposive approach consistent with Uber, noting that where the Regulations' wording is clear, the court must give effect to it rather than fill gaps by purposive interpretation. The court also dismissed the attempt to distinguish Mencap on the basis that sleep is binary while travel is not, holding that the principle that time spent not actually working (sleeping or travelling) is not 'time work' applies equally.

The ET had found that the workers were not working during travel and that regulation 34 excluded travel between home and the place of work from being treated as time work. The court found no error in this factual finding or in the ET's application of regulation 34, which correctly excluded the travel time in question from 'time work'.

The court acknowledged the potential anomaly that employers may avoid paying for long travel times by providing transport from workers' homes, but held that this was a matter for the legislature or the Low Pay Commission, not the court. The statutory scheme provides mechanisms for addressing such anomalies through reports and amendments to the Regulations.

Overall, the court agreed with the EAT that the ET erred in law by considering regulation 30 in isolation and not properly applying regulation 34. The court concluded that travel time from home to work and back, in the circumstances found, is not 'time work' under the Regulations.

Holding and Implications

The court DISMISSED the appeal, upholding the EAT's decision that the travel time spent by the workers travelling from their homes to their assignments and back does not constitute 'time work' payable under the National Minimum Wage Regulations 2015.

This decision means that employers are not required under the current Regulations to pay for such travel time unless the worker is engaged in actual work during travel or the travel meets the specific conditions in regulation 34. The court recognized a potential anomaly in the Regulations that could allow employers to avoid paying for lengthy travel time by providing transport from workers' homes but emphasized that correcting such anomalies is a matter for the legislature or the Low Pay Commission, not the courts. No new legal precedent was established beyond the application of existing authority.