November 2015: Companies wanting to exploit the current trend of moving from office-based businesses to more mobile ones will need to take a recent ECJ decision into consideration before changing their approach. The ECJ held 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”. If a worker does not have a fixed place of work and is carrying out their duties on journeys to and from their customers, that worker must be regarded as working on that journey. The fact that those journeys might start and finish at the worker’s home is irrelevant.

September 2015: Statutory Holidays and Sickness absence: The Employment Appeal Tribunal (EAT) has held that the Working Time Directive (2003/88/EC) does not require workers on sick leave to provide evidence that they are physically unable to take annual leave to carry over accrued unused statutory holiday to a subsequent leave year. It is sufficient that they are absent on sick leave and do not choose to take annual leave during that period.

However, the EAT also held that the right to carry over leave is not unlimited. Consequently, businesses should read the Working Time Regulations 1998 (WTR) as permitting a worker to take annual leave within 18 months of the leave year in which it accrues where they are unable or unwilling to take it because they are on sick leave. Accrued leave that goes beyond that cut-off period will lapse.

December 2014 Holiday Pay: In a landmark decision, the Employment Appeal Tribunal (EAT) has held that non-guaranteed overtime must be taken into account when calculating statutory holiday pay. Payments for overtime that a worker is required to work but which an employer is not required to offer (non-guaranteed overtime) should be regarded as “normal remuneration”. Allowances that are directly linked to a worker’s work and are more than merely expenses must also be included.

However, the EAT significantly limited the extent to which workers can make retrospective claims for underpaid holiday. It held that workers cannot use each shortfall in holiday pay as part of a series of deductions (for the purposes of unlawful deductions claims) where a period of more than three months has elapsed between the deductions. This decision means that, in the future, employers will be required to include such overtime payments and allowances in statutory holiday pay for the first four weeks’ of annual leave. Employers will need to review their staff’s working arrangements to assess whether they have workers who regularly work non-guaranteed overtime or are paid allowances which are more than simply expenses.

This business briefing summarises a business’ obligations under the Working Time Regulations.

Employers’ obligations under the Regulations
The 48-hour working week: A business must take all reasonable steps to ensure that workers’ average working time (including overtime) does not exceed 48 hours each week. If the business fails to make sure these steps are complied with, criminal sanctions can be imposed on the business. However, if workers have signed an opt-out agreement, the limit on average working hours will not apply. The business must keep records covering the last two years, showing which workers have opted out.

Special measures for night workers: A night worker is any person who works for at least three hours between 23:00 and 06:00 on the majority of their shifts. The business must take all reasonable steps to ensure night workers’ normal hours of work do not exceed eight hours each day, on average. The business should ensure that no night worker doing work involving special hazards or heavy physical or mental strain, works for more than eight hours each day. All night workers should be given the opportunity to take a free health assessment when they start night work and at regular intervals thereafter. If a doctor advises that night work is causing a worker health problems, the business should transfer the night worker to day work, where possible.

Give workers adequate rest breaks: A business must provide its workers with adequate rest breaks where their health and safety could be put at risk due to their pattern of work (for example, where the work is particularly monotonous).

Keeping accurate record: The business must keep and maintain records showing whether the limits on average working time, night work and provision of health and safety assessments are being complied with for each worker.

Rest periods: The business must allow all its workers the following rest periods unless they are exempt, in which case compensatory rest will usually have to be given:

  • 11 hours’ uninterrupted rest each day
  • 24 hours’ uninterrupted rest each week (or 48 hours uninterrupted rest each fortnight)
  • A rest break of 20 minutes when working more than six hours each day

Paid holidays: A business must allow its workers 5.6 weeks’ paid holiday each year (this is equivalent to 28 days for a full-time worker).

Penalties for breaching the Regulations: There are a wide range of penalties that can be imposed on a business for breaching the Regulations, including:

  • A fine of up to the statutory maximum (on summary conviction) or a potentially unlimited fine (on indictment)
  • “Improvement” or “prohibition” notices issued by Health and Safety Executive or local authority inspectors. If the business fails to comply with the notice:
    • potentially unlimited fines and up to two years’ imprisonment for directors on conviction on indictment can be imposed, or
    • a fine up to the statutory maximum and up to three months’ in prison on summary conviction can be imposed
  • Compensation for workers in an employment tribunal

Practical steps for a business to take in relation to the Regulations: Reach an agreement with workers about what “working time” actually means. Working time is defined as:

  • Any period during which a worker is working, carrying out his duties, and is at the business’s disposal
  • Any period during which the worker is receiving “relevant training”, or
  • Any additional period agreed in a relevant agreement to be “working time” (for example, in an employment contract)

Time that is not normally classed as “working time” includes:

  • Attending work-related social events
  • Travelling to a fixed workplace, and
  • Attending evening classes that are not a requirement of the job

Identify which workers, if any, are likely to exceed the 48-hour average and try to enter into opt-out agreements with them to exclude the limit on their average working time. Ask any workers who have not opted out for details of any other work they do for another employers and the hours they work each week. Keep a list of opted-out workers.

The content of this Business Briefing is for information only and does not constitute legal advice. It states the law as at November 2015. We recommend that specific professional advice is obtained on any particular matter. We do not accept responsibility for any loss arising as a result of the use of the information contained in this briefing.