The Commissioners for HMRC v Taylors Services Ltd & Ors

This appeal is about the correct construction of regulations 30 and 34 of the National Minimum Wage Regulations 2015 (2015 SI No 621) (‘the Regulations’). The Regulations were made under various powers conferred by the National Minimum Wage Act 1998 (‘the Act’). The issue is whether time spent by workers travelling from their homes to and from their work as ‘flock technicians’ at farms around the country was ‘work’ and should be paid at the national minimum wage (‘the NMW’), or not. The Commissioners for HM Revenue and Customs (‘HMRC’) issued notices assessing that the employers (‘the Respondents’) were liable for arrears of NMW and penalties (‘the notices’) in relation to that travel time.

The Respondents appealed to the Employment Tribunal (‘the ET’) against the notices. The ET held that the workers should be paid the NMW for that travelling time and upheld the notices. The Respondents appealed on a point of law to the Employment Appeal Tribunal (‘the EAT’). The EAT held that the workers should not be paid the NMW for that time, and allowed the appeal. HMRC appealed from the EAT’s order allowing the appeal from the ET, with the permission of Bean LJ.

HMRC argue, on four grounds, that the EAT misinterpreted ‘time work’ in Chapter 3 of the Regulations, particularly in regulations 30 and 34.

At some point before the EAT heard the appeal, one of the Respondents, Taylors Services Limited (‘TSL’), had been dissolved, after a creditors’ voluntary liquidation. The other Respondents are Mr Ivan Taylor and Mr Eric Taylor, trading as Taylors Poultry Services (‘TPS’). At the EAT hearing TPS were represented by counsel, Mr James Boyd. Mr Boyd also drafted a skeleton argument for this appeal. He was no longer representing TPS by the time this appeal was heard. Mr Ivan Taylor appeared in person, supported by his accountant, Mr Slack. HMRC were represented by Miss Ruth Hughes KC. She did not represent HMRC below. I thank both counsel for their skeleton arguments, and Miss Hughes for her oral submissions. Mr Taylor also made brief oral submissions, for which I also thank him.

For the reasons given below, I would dismiss this appeal. In short, the EAT’s approach to the construction of the Regulations was correct. The ET therefore erred in law in holding, on the basis of regulation 30 alone, that the hours which the workers spent travelling to their assignments was ‘time work’ for the purposes of the Regulations. But the ET’s alternative conclusion, based on careful reasons, that the travel time was not caught by regulation 34, was correct. It followed that the ET should have set the notices aside.

Section 1(1) of the Act entitles an employee to be paid at least the NMW ‘in respect of work in a pay reference period’. Section 1(3) provides that the NMW is ‘such single hourly rate as the Secretary of State may from time to time prescribe’. A pay reference period is such period as the Secretary of State may prescribe for that purpose (section 1(4)). Regulations may provide for ‘the circumstances in which, and times at which, or the time for which, a person is to be treated as, or as not, working, and the extent to which a person is so to be treated’ (section 2(3)).

Four sections (5-8) are headed ‘The Low Pay Commission’. Section 5 requires the Secretary of State, before making the first regulations under section 1(3), 1(4), or 2 of the Act, to refer the matters listed in section 1(2) to the Low Pay Commission (‘the LPC’). That list includes ‘(c) what method or methods should be used for determining under section 2 above the hourly rate at which a person is to be regarded as remunerated for the purposes of this Act’. Where such matters are referred to the LPC, the LPC must make a report to the Prime Minister and the Secretary of State which contains the LPC’s recommendations about each such matter (section 5(3)). Section 5(4), in short, requires the Secretary of State, if he decides not to reflect the LPC’s recommendations in the regulations, to explain why in a report which he must lay before both Houses of Parliament.

Section 6(1) gives the Secretary of State power to refer to the LPC, at any time, ‘such matters relating to’ the Act as the Secretary of State thinks fit. The LPC must then make a report to Prime Minister and the Secretary of State, making recommendations about those matters (section 6(2)). If the Secretary of State seeks the LPC’s opinion on a matter listed in section 5(2), and the LPC’s report in response recommends the making of regulations, a similar procedure applies as applies when the first regulations are made (section 6(3)-(4)). Section 7 makes supplementary provision about references to the LPC. Section 8 provides for the appointment of the LPC to ‘discharge the functions conferred or imposed on it’ under the Act.

Section 19C gives a person a right of appeal to the ET against three aspects of a notice of underpayment, on the limited grounds listed in section 19C(4)-(6). If an appeal succeeds under section 19C(1)(a), the ET must rescind the notice. If it succeeds on other grounds, the ET must rectify the notice. Section 21(1)(ga) of the Employment Tribunals Act 1996 gives jurisdiction to the EAT ‘on any question of law arising from any decision of, or arising in any proceedings before an [ET] under or by virtue of -…the National Minimum Wage Act 1998.’

Section 51 makes detailed provision about the making of delegated legislation under the Act (Orders in Council, regulations and orders).

I am grateful to the EAT for its lucid summary of the Regulations, which I have found very helpful. The Regulations are the regulations made, among other powers, under section 2(3) of the Act. As the EAT noted (judgment, paragraph 6), the Regulations do not define ‘work’, other than by expressly providing that some activities are not ‘work’ (in regulations 3, 57 and 58). As the EAT also noted, section 28 of the Act requires an ET to assume that a worker has been paid at a rate which is less than the NMW unless the employer can show otherwise.

Regulation 6 defines a ‘pay reference period’ as a month, or, if shorter, any period by reference to which a worker is paid. Regulation 7 is headed ‘Calculation to determine whether the [NMW] has been paid’. It is a deeming provision. It provides that a worker ‘is to be treated as remunerated by the employer in a pay reference period at the hourly rate determined by the calculation R/H - where “R” is the remuneration in the pay reference period determined in accordance with Part 4; “H” is the hours of work in the pay reference period determined in accordance with Part 5’ (my emphasis).

Part 5 starts with regulation 17, which provides that the hours of work in the pay reference period ‘are the hours worked or treated as worked by the worker in the pay reference period’ as determined by various Chapters in Part 5, which deal with four different types of ‘work’ (my emphasis). Those are ‘salaried hours work’, ‘output work’, ‘unmeasured work’, or ‘time work’. Time work, which is the type of work in this case, is dealt with in Chapter 3. Chapter 5 is headed ‘Hours worked for the purposes of the [NMW]’.

Regulation 20 provides for travel.

The primary definition of ‘time work’ is in regulation 30, which is headed ‘The meaning of time work’. I say ‘primary’, because the following provisions expand on that primary definition. Regulation 30 provides:

Regulations 31 to 35 make that further provision about time work. The emphases in the quotation below are all mine.

The EAT noted in paragraph 12 that other Chapters in Part 5 make similar provision about travel (in regulations 27(1)(c) and 39). Regulation 47, dealing with unmeasured work, is in somewhat different terms.

The EAT considered ‘ordinary commuting’ and the relationship of regulation 10(n) of the Regulations with 338 of the Income Tax (Earnings and Pensions) Act 2003. I refer the interested reader to paragraphs 13-17 of the judgment. I need say no more about it, as Miss Hughes confirmed in her oral submissions.

There are several authorities in which the Regulations have been considered. Miss Hughes helpfully indicated that the only authority which is relevant to the issues in this appeal is Mencap.

Lord Kerr presided over the hearing in February 2020. He died in December 2020, before the judgments were handed down. It had been intended that he would write the leading judgment (see paragraph 76 of Lady Arden’s judgment). The Supreme Court then made a direction under section 43(2) of the Constitutional Reform Act 2005 that the court was duly constituted with the four remaining Justices. The lead judgment was then given by Lady Arden. Lord Carnwath, with whom Lord Wilson agreed, concurred with Lady Arden’s decision that the appeal should be dismissed for the reasons she gave. They reserved their positions, however, about whether, as she thought, British Nursing Association v Inland Revenue [2002] EWCA Civ 494; [2003] ICR 19 (‘British Nursing’) should be overruled. Their view was, instead, that, it should no longer be treated as authoritative. Lord Kitchen agreed that the appeal should be dismissed for the reasons given by Lady Arden. He agreed with Lords Carnwath and Wilson about the status of British Nursing.

The two claimants were, respectively, a care support worker and an on-call care assistant. The first claimant claimed in the ET, under the Regulations, that she should be paid an hourly rate for the whole shift. The second claimant made a claim in the ET, under of the National Minimum Wage Regulations 1999 (1999 SI No 584) (‘the 1999 Regulations’), which were in force at the relevant times, that he should be paid for the hours when he was required to be in a residential care home (‘the home’).

The first claimant cared for two vulnerable adults in their home. She did what was, for the purposes of the Regulations, salaried work during the day. She was also required to do shifts during the night, and to stay the night in the adults’ home. That was time work for the purposes of the Regulations. During those shifts she was allowed to sleep. She was not required to do any work, but had to ‘keep a listening ear’. She had to deal with any emergencies during the night. During a 16-month period she had been disturbed about six times. She was paid an allowance, and for one hour’s work for those shifts (£29.05). She was paid an hourly rate for any further work.

The second claimant worked in the home. From about 1993, he was given free accommodation in the home. He was paid £50 a week (which later increased to £90). His contract required him to be in the home between 10pm and 7am. He was allowed to sleep. During those hours the night care worker who was on duty could ask the second claimant for help. In practice he was rarely called on.

In paragraph 9 of her judgment, Lady Arden described the ‘depth of investigation and consultation’ done by the LPC in discharging its statutory functions. In paragraph 10, she said that the LPC’s first report was an important aid to the interpretation of the Regulations.

She noted that the LPC’s first report made a recommendation about sleep-in shifts. It was that workers should get an allowance and that they should be ‘entitled to [the NMW] for all times when they are awake and required to be available for work’. She interpreted the LPC’s recommendation as a recommendation that work should normally include time for which a worker was required to be available for work at the place of work. She also considered that it could be inferred that that ‘would not apply’ if the worker was at home. She called that ‘the home exception’. It also, expressly, did not apply to workers who were required to be on call and to sleep at their employers’ premises (paragraph 14).

As originally drafted, regulation 15 of the 1999 Regulations included a general rule, the home exception and the sleep-in shift in one provision (paragraph 15). Regulation 15(1A) was inserted in the 1999 Regulations by amending regulations which came into force on 1 October 2000. Regulation 15 then provided:

The second report of the LPC did not recommend ‘any legislative change’ (paragraph 16). The effect of the amendments was to narrow ‘the home exception (paragraph (1)) and the sleep-in provision. As to the latter, the new provision required suitable facilities for sleeping to be provided for the worker and removed the words “in addition to time when a worker is working” as no doubt some workers might only work sleep-in shifts’ (paragraph 16).

The 1999 Regulations were revoked and replaced by the Regulations. By the time of the relevant facts in Mencap, regulation 30 of the Regulations was in the same terms as it now is. Regulation 32 of the Regulations provided:

In paragraph 35, Lady Arden said that she should not approach the question of interpretation ‘with any preconception as to what should entitle a worker to a wage. It is clearly not the position that, simply because at a particular time an employee is subject to the employer’s instructions, he is necessarily entitled to a wage. There are many situations when a worker has to act for the benefit of his employer which do not count for time work purposes, for example when he travels between home and work…Nor…is the NMW dependent on the extent to which the work produces value for the employer or enables the employer to say that he has fulfilled a duty to someone else: that would make the NMW depended on the terms of a contract between private parties’. She added in paragraph 36 that the purposes of the NMW were ‘no doubt complex’.

The primary question was not whether the worker was working, but how his hours were to be calculated for the purposes of the NMW (paragraph 37). That was confirmed by the heading of Chapter 5. She added in paragraph 39 that ‘The use of the word “treated” in regulation 17…is a signal that a counterfactual situation may arise. It underscores that the rules enacted by the regulations may not accord with reality and that there will be occasions when hours are not treated as hours of work for the purpose of the regulations even though a different number of hours might have been determined to be worked in the absence of that provision.’

In paragraphs 40-42 she considered the purpose of the recommendation about sleep-in workers in the first LPC report. Her view was that the purpose of the first version of regulation 15 of the 1999 Regulations was to implement the LPC’s recommendation about sleep-in workers (paragraph 40). She thought that that purpose might not have been achieved in the first version of regulation 15. In paragraph 41 she suggested that that might be an explanation for the ‘subtle changes made in 2000’. Her view was that the purpose of regulation 32, like its predecessors, was to implement the relevant recommendation in the LPC’s first report (paragraph 42).

She expressed a clear view that the relevant regulations ‘must be read together so that the rules produce a harmonious whole’ (paragraph 43). Her conclusion, ‘applying the approach explained above’, was that the meaning of regulation 32(2) (or 15(1A), as the case might be) was ‘quite clear. The basic proposition is that they are not doing time work for the purposes of the NMW if they are not awake. However the regulations go further than that and state that not only are they not doing time work if they are asleep; they are not doing time work unless they are awake for the purposes of working’. It was necessary to look at the specific arrangements between the worker and employer to see ‘what the worker is required to do when not asleep but within the hours of the sleep-in shift’ (paragraph 44).

In its first report, the LPC ‘plainly did not consider that a sleep-in worker who was sleeping could be said to be working’. The view was shared by the draftsman of the 1999 Regulations ‘at least as originally enacted’ and by the draftsman of the Regulations. She made further points about the interpretation of the relevant provisions in paragraphs 47 and 48. Her view was supported by extracts from the LPC’s second report. The LPC did not consider it necessary to make any recommendation that the 1999 Regulations should be changed to meet a potential for abuse which it had identified, and considered that it could be dealt with in appropriate guidance. It again called for guidance in its fourth report (paragraph 50).

Lady Arden said in paragraph 61 that it was important for ETs to ‘appreciate the range of distinctions which fall to be made and make appropriate findings. The function of making these distinctions has been left to’ [ETs]. The LPC’s fourth report ‘explains that arrangements can vary considerably on their facts and that it would have been difficult for the regulations to capture the diversity of individual cases’.

She recorded a submission for the first claimant that a sequential approach should be taken, by deciding first whether the first claimant was doing ‘work’ or whether she was simply available for work. The contention was that on the ET’s findings of fact, she was working and not simply available for work for the purposes of regulation 32. In paragraph 66, Lady Arden gave two reasons why she rejected it. First, ‘That process would considerably reduce the sphere of operation of the sleep-in provision, contrary to the apparent intention of the LPC’. Second, the regulations did not provide for the position to change according to the frequency of any calls.

In paragraph 70 she rejected an argument that having a ‘listening ear’ entailed the conclusion that the first claimant was ‘working for NMW purposes. A worker must travel from home to the employer’s place of business, but it does not automatically follow that that travelling time falls within the calculation of hours for the purposes of the NMW’. There was ‘no call’, further, to reinstate the ‘multifactorial test adumbrated’ by the EAT. It would ‘introduce a considerable amount of uncertainty into the NMW rights of the sleep-in worker’. That would be in no-one’s interests (paragraph 71).

The ET consisted of Employment Judge Broughton sitting alone. After a two-day hearing, the ET dismissed the appeal and upheld the notices. The ET’s judgment is long and detailed. There are about 50 pages of closely typed text. The issues in the EAT were narrower than they had been before the ET. The EAT’s summary of the ET’s judgment is sufficient, at least for the purposes of the appeal to the EAT, as Miss Hughes accepted in her oral submissions. I will rely principally on that summary, for which I am grateful. I will, nevertheless, add some factual details. Further, because HMRC’s argument in this court was somewhat different from their argument in the EAT, it is necessary to see what the ET had to say about that argument, as it was developed in the ET hearing. HMRC called two witnesses, Ms Romanek, who was involved in HMRC’s investigation of the Respondents’ business, and Mr Gregory, who had worked on and off for the Respondents for about ten years.

In the course of her oral submissions, Miss Hughes referred us to some specific passages in the ET’s judgment, so I note those first. The ET described the effects of the notices in paragraphs 2 and 3. TPS was assessed for NMW arrears of £32,128.42 and penalties of £28,741.64. TSL was assessed for arrears of £30,259.84 and penalties of £30,103.80. The notices related to different periods, according to whether the employer of the relevant workers was TPS, or (after a TUPE transfer) TSL.

The evidence recorded by the ET included answers given by the workers to questions asked of them by the HMRC investigator. In paragraph 56 the ET recorded that the replies were ‘pretty consistent in that the vast majority who replied stated that the workers always travelled to sites in the company vehicles and they were picked up from their home (or close by)’. The replies ‘were consistent in stating that there was no alternative to get to the sites and a number stated that they were personally unable to drive’ (paragraph 56). Ms Romanek confirmed in cross-examination in the ET that she had not asked the workers whether ‘they had at any point asked to travel from [the Respondents’] offices/business unit by their own mode of transport and whether this was refused’ (paragraph 57).

Other evidence elicited from the Respondents by Ms Romanek and apparently accepted by the ET was that the journeys to the sites could be a four-hour drive one way but that the sites were normally two hours away (paragraphs 83 and 245 of the ET’s judgment). The ET also recorded that Ms Romanek had accepted that ‘the vast majority of the workers did not have their own means of transport’. She also ‘conceded that the location[s] were not accessible by public transport and none of the Workers had said that they had asked to use their own cars and been told that they could not do so’ (paragraph 112).

The ET’s judgment shows that HMRC argued in the ET that the facts of this case were not the sort of facts at which regulation 34 is aimed. The travelling hours were ‘very much longer and more arduous than ordinary commuting and were completely under [the Respondents’] control’ (paragraph 167.i). HMRC added that ‘the true agreement’ between the Respondents and the workers was that the workers were required to report to the Respondents’ office if the Respondents so chose and were paid for travelling hours on the basis that in practice they were usually picked up from near their homes as a matter of mutual convenience. ‘It would be arbitrary and anomalous for a minority of workers required to attend the office to qualify for NMW and regulation 34 and other workers picked up from near their home a few minutes away…are excluded (paragraph 167.ii). That ‘minority’ appears to be a reference to Mr Wood (occasionally) and to Mr Gladwin (paragraphs 58 and 59). In the ET, HMRC relied on Autoclenz Limited v Belcher [2011] UKSC 41; [2011] ICR 115 for that approach (paragraph 166 of the ET judgment), but it also referred to Uber, albeit in a different context (see paragraph 200).

The ET was aware of the decision in Mencap (see paragraphs 211, 212, and 238 of the ET’s judgment). It quoted paragraphs 35 and 36 of Lady Arden’s judgment in paragraph 213. The ET considered regulation 34 in paragraphs 256-272. It is convenient for me to summarise and comment on that reasoning below (at paragraphs 77-90).

The EAT’s judgment is reported at [2024] ICR 1171. The EAT summarised the facts in paragraph 1. The Respondents engaged workers on ‘zero hours’ contracts and provided them to poultry farms around the country. They did various tasks: catching poultry, giving them injections, grading them, and loading and unloading them. In 2020 HMRC decided that the time which those workers spent travelling to and from those farms was time for which those workers should be paid the NMW, and issued the notices. The Respondents had exercised their right of appeal to the ET (conferred by section 19C(1) of the Act).

The EAT gave permission to appeal on one ground: it was arguable that the ET had erred in law in concluding that the relevant workers’ time travelling to the first assignment of the day and back again was ‘time work’ for the purposes of Chapter 3 of the Regulations, rather than being caught by the deeming provision in regulation 34.

The EAT referred to the decision of the Supreme Court in Mencap. Its summary of the decision was that ‘what constitutes “work” for the purposes of regulation 30 has to be interpreted in the light of regulation 32. As the drafters of regulation 32(2) evidently regarded a worker who is “asleep” as neither being “available for work” or “working” for the purposes of the Regulations, so time spent sleeping could not be “work” for the purposes of regulation 30’ (paragraph 20). The EAT quoted paragraphs 12, 35-47, 66-73, 86-89 and 96 of Lady Arden’s judgment.

The EAT summarised the reasoning of the ET in paragraphs 28-35. HMRC and the Respondents were represented by counsel at the ET hearing. It had been common ground in the ET that, while the workers were actually doing things to poultry, they were doing ‘time work’ within the meaning of regulation 30. It was also agreed that the Respondents had a ‘base premises’. The Respondents usually provided a minibus which collected the workers from their homes and took them directly to their first assignment. The workers were sometimes required to go first to the Respondents’ premises. It also seemed to be agreed that sometimes the journeys could be very long: up to four hours each way, so that the workers could be travelling for up to eight hours a day on top of a normal working day, or they could be collected from home in the middle of the night in order to reach the site of that day’s assignment in time for a morning’s work.

The issues which the parties agreed that the ET should decide included (1) whether the travelling hours were ‘actual work’ for the purposes of regulations 30 and 31, and (2), if not, whether the travelling hours were deemed to be time work for the purposes of regulation 34 (paragraph 9 of the ET’s judgment).

In paragraph 31 the EAT said that the ET had decided that the hours were ‘time work’ for the purposes of regulation 30(1). The ET had then said, in paragraph 253, that it did not need to deal with ‘the deeming provisions’. By that, it meant regulations 32 and 34. The ET nevertheless did so, briefly. In paragraphs 272-273, the ET concluded that if its conclusion about regulation 30 was wrong, the journeys from home to the first assignment would not be deemed to be time work by virtue of regulation 34, because they were not done at a time when the worker would ‘otherwise be working’.

The EAT commented that much of the ET’s judgment consisted of rehearsing the evidence. The recitation of the evidence was interspersed with findings of fact properly so called. In her oral submissions to us, Miss Hughes accepted this criticism of the ET’s judgment. The EAT said that the ET made findings about whether the Respondents had a contractual obligation to pay the workers for their time travelling. The EAT explained, by reference to regulation 30, why that was a potentially important issue. It also commented that the ET’s findings of fact on that issue were confused. It explained that comment in paragraph 33. The ET had concluded in paragraph 247, nevertheless, that the workers had a contractual entitlement to be paid for travel time to and from the first assignment, although the ET made no finding about the second necessary element, that the entitlement had to be ‘by reference to the time worked by the worker’. Both the parties to the appeal were content for the EAT to assume that the ET had made both necessary findings, and the EAT did so (paragraph 34). The ET’s findings about whether the workers were working when travelling were in paragraphs 242-252, which the EAT quoted in full (paragraph 35).

In paragraph 41 the EAT considered and rejected HMRC’s submission that the reasoning in Mencap could not be ‘read across’ to travel time cases. The EAT considered that the Supreme Court’s decision did not rest on the LPC’s reports, and the same conclusion would have been reached without the reports. The EAT relied on paragraph 46 of Lady Arden’s judgment and paragraph 87 of Lord Kitchen’s. ‘The Justices did not say that the reports led them to give a meaning to regulation 32 which they would not otherwise have given it’. It followed that, when interpreting the meaning of work in the Regulations, it was necessary to look at the Regulations as a whole ‘in order to understand what the drafters of the legislation considered “work” meant. Just as it was necessary to consider regulation 32 in order to understand that sleep was not work, ‘regulation 34 tells us that the drafter of the legislation did not consider that travelling was “work”, (both in its ordinary sense and including the specific travelling activities listed in regulation 20). That is why there is a deeming provision, and why in regulation 34(1) travelling is contrasted with the “working” which the worker might “otherwise” be doing’ (paragraph 42).

The EAT added that the drafter also considered that travelling would not be working even where ‘it was for the purpose of carrying out assignments at different places between which the worker was “obliged” to travel by the employer, hence the terms in which sub-paragraph (2)(a) is drafted’. The EAT quoted part of paragraph 35 of Lady Arden’s judgment (see paragraph 29, above) (paragraph 43). The EAT nevertheless acknowledged in paragraph 44 that there would be cases in which someone would be working while travelling and doing time work: drivers of various different vehicles such as buses, lorries and trains, and others working in public transport. The same applied to a person who was working while travelling; for example working on documents or having a business meeting.

In paragraph 45 the EAT rejected HMRC’s submission that, in some cases, travelling was a person’s work, and if they were paid by reference to the time they spent doing it, it would be ‘time work’ within the meaning of regulation 30, despite regulation 34. If the Regulations are interpreted as a whole ‘as the Supreme Court has held that we are required to do, “just” travelling is not work for the purposes of’ the Regulations. Unless the worker was doing ‘work’ while travelling, the time spent travelling was not work within regulation 30. The facts that the travel was for the purposes of doing work for the employer, or that the employer obliged the worker to do it, did not make it ‘work’. Nor could it make a difference if the form of transport, or time of travel, were ‘mandated’ by the employer. Those were just different ways in which a worker might be obliged by the employer to do something. ‘Nuances in the form that obligation takes cannot change what would ordinarily be understood as “travel” into “work”’ (paragraph 45).

The EAT explained in paragraph 46 why regulation 34 was not dealing with ‘ordinary commuting’, and why that concept was irrelevant. The ET’s concern that the workers were not doing an ‘ordinary commute’ was beside the point. The EAT recognised in paragraph 47 that this interpretation might be thought to cause injustice on these facts, for two reasons. First, the travel in this case was very long. Second, the regulations gave the employer significant power to decide whether or not workers are entitled to the NMW on such journeys, according to whether or not the employer required them to be collected from, and returned, to their homes.

Any such injustice was for the legislature to deal with. It might be tempting to uphold the ET for the benefit of the workers in this case, the EAT did not ‘consider that such a result would properly represent the law in the light of’ Mencap. The EAT was ‘bound to apply the terms of’ the Regulations ‘as drafted. The meaning of the Regulations is, following Mencap, sufficiently clear that there is no scope for an alternative purposive interpretation here’ (paragraph 48).

The EAT said that the ET had ‘frankly acknowledged’, in paragraph 243, that the workers were not ‘engaged in work in the ordinary sense while travelling on the minibus’. The EAT said that, ‘in the light of the law as I find it to be, that was an end of the matter’. If the ET had read regulations 30 and 34 together, rather than sequentially, it would have concluded that the workers were not doing time work on the bus (paragraph 49).

The EAT added that the ET’s ‘efforts to explain why it considered that the workers were working while sat on the minibus are in substance indistinguishable from the efforts of counsel in the Mencap case to argue that ‘sleep’ was ‘work’’. The Supreme Court had rejected that submission and the same ‘inevitably goes for the [ET’s] efforts in this case to find that travel was work because it was onerous, unpleasant, lengthy in duration and mandated by the employer’. It was, it seemed to the EAT, as it had seemed to the ET, ‘unavoidably still “travel” and not “work” applying the ordinary meaning of those terms’. The workers would have been ‘free to talk, snooze, read, and if they had the necessary electronic devices, to listen to music, watch a film or spend their time applying for more agreeable employment’ (paragraph 50).

In paragraph 51 the EAT decided that this was one of ‘those rare cases’ in which, once the law was properly interpreted and applied to the facts found by the ET, there was ‘only one right answer’. This reflected the parties’ agreement (see paragraph 39). Miss Hughes accepted in her oral submissions that, if the EAT’s legal analysis was correct, the EAT was also right that the case should not be remitted to the ET.

There are four issues.

The procedural issue

It is reasonably clear that one of HMRC’s arguments at the ET hearing, if it failed in its argument under regulation 30 that the travel in this case was time work, was that the Respondents’ business was arranged in a way which meant the words of regulation 34 either did not apply to the facts, or, if it did, the ET should look at the supposed reality of the situation. That argument, and Miss Hughes’s related argument on this appeal, were based on statements by Lord Leggatt in Uber (at paragraphs 68-78). Those statements were made in the same statutory context, but related to a different issue. That issue was what role a contract drafted by a sophisticated employer (who understood the legal issues) should play in the court’s decision about whether the other party to that contract was, for statutory purposes, a worker, or not.

HMRC urged the ET to hold that regulation 34 could not be intended to apply to a case like this, because, by the simple expedient of picking up workers from their homes, rather than requiring them first to attend the Respondents’ premises, the Respondents could avoid liability for paying the NMW for the long hours the worker spent travelling from their homes to their assignments. The ET rejected that argument, with great force and lucidity (see paragraphs 87-88, below). HMRC did not cross-appeal to the EAT against that conclusion. It might therefore be doubted whether this court should allow HMRC to revive that or a similar argument on this appeal, whether or not permission has been granted to run it. I will not spend time on the procedural niceties. The argument was considered by the ET, so no further findings of fact are necessary. As the ET did, I consider that the answer to this argument is clear, and that this court should deal with it. I will therefore do so. I add only that it is no surprise that the EAT did not deal with this argument, and that, obviously, the EAT cannot be criticised for that omission.

The issue of construction

The legislative context

There are four starting points for construing the Regulations. First, the Regulations deal the detailed implementation of social policy, in an area in which a statutory body has particular expertise and statutory functions. The LPC and the Secretary of State know more about the relevant policy and how best to implement it in practice than this court does. Second, the mechanisms in sections 5-8 of the Act mean that the Regulations are unusually sensitive, and potentially responsive to, social and legal developments. In short, those mechanisms ensure that if the LPC is concerned, for example, that the unusual facts of an appeal have brought to light a potential anomaly or loophole in the Regulations, it can bring that to the attention of the Secretary of State, and the Secretary of State can then decide whether there is a loophole, and if so, whether, and if so, how that loophole should be closed. The LPC and the Secretary of State are in a much better position than is this court to decide whether there is a potential loophole, and if so, whether, and, if so, how it should be closed. Third, the Regulations are technical provisions designed to achieve uniform treatment, for the purposes of the NMW, of a wide range of different facts, as both the ET and the EAT recognised. The Regulations deal not only with four different ways in which workers may be paid, but also make detailed provision for each method of payment, and for the treatment of hours spent in such activities as training and travel. A fourth related starting point is that, unlike some tax legislation, there are, with the exception of section 49(1) of the Act, no explicit anti-avoidance provisions in the Regulations. HMRC did not suggest that section 49 was relevant to this appeal.

Those starting points have two related consequences. First, this court must work out what the Regulations mean. This court should be especially reluctant to be lured by the invocation of a ‘purposive construction’ from giving effect to the meaning of the words of the Regulations, if their meaning is clear. The ET and the EAT, both closer to the facts than is this court, emphatically resisted that temptation (albeit in relation to different strands of HMRC’s argument: see paragraphs 268-271 of the ET’s judgment, and paragraph 48 of the EAT’s judgment: paragraphs 87-88, below, and paragraph 54, above). So should we. Second, if section 49 does not apply, the court should not fill any perceived gap under the guise of a purposive construction of the Regulations. The approach of both tribunals to this issue was therefore correct.

What is the correct approach to understanding the Regulations?

As the EAT pointed out, ‘work’ is not defined in the Regulations. ‘Work’ is an ordinary English word, but ‘time work’ is not an ordinary English phrase. ‘Time work’ is a technical phrase used by the draftsman of the Regulations to express one of the important concepts in this legislative scheme. Regulation 30 is what I have called ‘the primary definition’ of time work, but that definition is refined by the provisions which follow it, by which some activities are said to be time work, and others are to be ‘treated as’ time work. In order to understand what ‘time work’ is, it is therefore necessary to explore the ways in which that concept is shaped by its use in different provisions of the Regulations, and not just by reading regulation 30. In this technical field, in particular, it is essential that the relevant provisions are read together in order to understand the meaning which the draftsman intended to convey by that technical phrase.

I therefore agree with the EAT that Mencap, by which both the EAT and this court are bound, decides that the relevant regulations must be read as a whole. In particular, it is neither sensible nor possible to decide, in a particular case, whether travelling is time work for the purposes of regulation 30 without also taking into account regulation 20, which defines travelling, and regulation 34, which deals with travel in the situations to which it applies.

I accept Miss Hughes’s submission that ‘sleeping’ is a binary concept (a person is either asleep or awake) and that ‘travel’, as expounded in the Regulations, is not. She argued that it followed from that distinction that the basic approach to construction in the Mencap case cannot be ‘read across’ to this case. I reject that second argument. Whether the specific provisions of the Regulations which are relevant to a particular dispute should be read as a whole before their meaning can be ascertained cannot depend on such an arbitrary and unprincipled distinction.

Miss Hughes gave another reason for distinguishing the approach to construction in the Mencap case. She submitted that the Supreme Court’s construction of the Regulations in the Mencap case was either based on, or heavily influenced by, the fact that it accorded with a recommendation made by the LPC in a statutory report. There is no such support in any report of the LPC for the EAT’s construction of the Regulations, she said.

I also reject that submission for four reasons. The first and most significant reason is that this submission has no logical bearing on the question whether or not the relevant regulations should be read together before their meaning can be understood. That approach to the construction of the Regulations is an independent and binding feature of the reasoning of the Supreme Court in Mencap.

The second reason is closely linked with the first. I agree with the EAT’s understanding of the judgments in Mencap that the construction of the Regulations in those judgments was not decisively influenced by the recommendation of the LPC, but, rather, that the LPC’s recommendation served to confirm a construction already grounded in the words of the Regulations. None of the judgments links this approach to interpretation to the LPC report or to any other legal or factual aspect which was unique to the Mencap case. The EAT considered this argument in paragraph 41 of its judgment. It correctly observed: ‘Nowhere do the judges of the Supreme Court indicate that the purposive interpretation has led them to adopt a meaning for the legislation that they would not otherwise have given it’.

The third reason is that this case is different from Mencap precisely because the provisions which were at issue in that case had been the subject of a clear recommendation in the LPC’s first report, which has a particular statutory significance, and Miss Hughes did not show us any relevant material from any LPC report which is relevant to regulations 30 and 34.

The fourth reason flows from the third reason. I have already rejected HMRC’s argument that Lady Arden adopted a purposive construction which depended on what the LPC had recommended. HMRC’s further submission seems to be that because there is no material in any LPC report to control the court’s approach in this case, the court may adopt purposive approach to the relevant provisions which is wider than that of Lady Arden. I reject that submission also, for two reasons. First, there is little guidance about the basis of this approach, other than its broad description, which is that it is to protect workers from exploitation. Second, it follows that there is no guidance about how this approach can or should displace the clear words of the Regulations. Within the constraints of sections 5-8, and of public law, the Secretary of State can ultimately make any regulations he chooses, whether or not they have the support of a recommendation by the LPC. The court’s task is to interpret the words of the Regulations, and, if they are clear, as they are here, to give effect to them.

I therefore also reject Miss Hughes’s further argument that it was open to the ET to reach even a provisional conclusion that the travel in this case was ‘time work’ for the purposes of the regulation 30 in isolation, without first revisiting that provisional conclusion by reference to regulation 34, which specifically deals with travel. The ET was bound by Mencap to interpret the relevant provisions of the Regulations as a whole, and not in isolation from each other. I therefore agree with the EAT that the ET erred in law by reaching a decision based on regulation 30 alone, and by not using regulation 34 to inform that decision.

That conclusion also disposes of Miss Hughes’s further argument that the ET’s decision that the travel was ‘time work’ was a finding of fact, or an expert assessment, with which, as is well known, this court could only interfere on limited grounds. If, as I consider it was, the ET’s finding of fact or expert assessment was based on a misunderstanding of the law, it cannot stand. I have already described that misunderstanding in the previous paragraph of this judgment.

What does regulation 34 mean?

It follows from what I have already said that a court cannot decide whether the travel in this case was time work for the purposes of the Regulations without considering the whole of Chapter 3, including regulation 34. The starting point for this exercise is regulation 35(1) which provides that hours when a worker is absent from work are not treated as hours of time work except as specified in regulations 32-34. The reference to regulation 34 makes it clear that the draftsman understood absence from work to include time spent travelling.

The meaning of regulation 34 is also clear. The heading advertises that regulation 34 is a deeming provision, as the ET recognised (paragraph 256). It therefore suggests that the draftsman considered, consistently with regulation 35(1), that time spent travelling would not be time work, unless it is, by virtue of regulation 34, ‘treated as’ time work.

Regulation 34(1) creates a general rule which is subject to an exception. The general rule has two cumulative conditions. The general rule is that, if a worker is travelling (a) for the purposes of time work and (b) at a time when he would otherwise be working, that time is treated as hours of time work for the purposes of the NMW. The exception to that general rule is that time spent in travel which meets those two conditions but which is between the worker’s home and his place of work, or a place where an assignment is carried out, is not treated as hours of time work. The effect of the rule and that exception, therefore, is that time travelling is not treated as hours of time work if (a) it is not for the purposes of time work, or (b) it not done at a time when the worker would otherwise be working, or (c) it is travel between the worker’s home and the place where he carries out an assignment.

Regulation 34(2) supplements that analysis. The purpose of regulation 34(2) is to make clear that what periods of travel are treated as included in the phrase ‘where the worker would otherwise be working’, in two different cases. The first is hours when a worker is travelling for the purposes of work between different places of work which are not occupied by the employer. I will refer to such a worker as a ‘peripatetic worker’. The second is when the worker is travelling and it is not certain whether the worker would otherwise be working because his hours of work are vary (either in their length or in their timing).

Did the ET understand and apply regulation 34 correctly?

The ET understood that hours spent travelling for the purposes of time work, when the worker ‘would otherwise be working’, are ‘treated as time work’. It also understood that if the travel was at a time when the worker would not otherwise be working, that travel time is not to be treated as hour of time work, regardless of the purpose of that travel. The ET, therefore, was not only entitled, but bound, as it did do, to investigate whether or not, when they were travelling, the workers ‘would otherwise be working’. That ET had to decide, therefore, whether the travel time in this case was at a time when the worker would otherwise be working (as that phrase is to be understood in normal usage, and taking account of regulation 34(2)).

To anticipate somewhat, its finding of fact (see further, paragraphs 84 and 85, below) that the time when the workers were travelling was not time when they ‘would otherwise be working’, even when that phrase includes the cases described in regulation 34(2), is a conclusive answer to the questions posed by regulation 34, and means that the travelling time could not count as time work for the purposes of the NMW. I will nevertheless (out of caution) consider all of the ET’s reasoning to see whether or not it is flawed, or could possibly undermine the conclusiveness of that finding of fact.

The ET acknowledged, first, that if a worker is working during a train journey, the hours would count as time work in any event (paragraph 256). The ET then recognised that ‘If the worker cannot be said to be working during travel time’, it was necessary to consider ‘regulation 34 to see if the relevant hours are nonetheless deemed to be treated as hours of work’. It correctly recognised that the ‘starting point’ is that hours spent travelling when the worker ‘would otherwise be working’ count as time work. That would ‘clearly cover business travel during the working day’. Time spent on the daily commute was not ‘covered by regulation 34, at least where the worker has a set start and finish time’ (because that was not time when the worker would otherwise be working) (paragraph 258). I can see no arguable error in that stage of the analysis; indeed, it is correct.

‘Similar reasoning’ applied where the worker was required to work away from his usual place of work on a particular day ‘(but is to start at his normal time); this commuting would not count either as time work, even if the journey is significantly longer than normal’ (paragraph 259). I can see no arguable error in that stage of the analysis, either; indeed, it is correct.

The ET quoted regulation 34(1)(a). The ET appreciated that it expressly excludes time spent travelling between the worker’s permanent or temporary home (where he is not in the temporary home for work purposes). The ET thought that these words ‘may well be considered not necessary to exclude commuting time because, such hours (as I have stated above) are not time when the worker would otherwise be working and so are not covered anyway’ (paragraph 260, original emphasis).

The ET noted that regulation 34(2) gives two ‘instances of travelling time when the worker “would otherwise be working”, and which are therefore treated as time work’ (original emphasis). First, it covers peripatetic workers and the time they spend travelling between assignments. Second, it also covers circumstances in which the worker was travelling and it was uncertain whether the worker would otherwise be working because his working hours varied (paragraph 261). I can see no error in the ET’s understanding of regulation 34(2).

If regulation 34 did apply, and travelling time was not work within regulation 30, the travelling time ‘would not be hours when the Workers would otherwise be working’ (original emphasis). HMRC did not ‘allege that if the workers had not been picked up at 2am they would have been catching chickens etc from that time, they would have been doing this type of work only as and when they arrived at the site, at, for example, 7am’ (paragraph 262). That conclusion was not only open to the ET on the facts, but obviously correct.

The ET then considered whether the workers would ‘otherwise been working’ within the definition in regulation 34(2)(a). The ET considered that the natural meaning of this provision (‘between which’) was that it was intended to cover ‘a situation where the worker is travelling from one place to another to do assignments’. This case was not concerned with such travel, but with travel from home, or from the employer’s premises, to the first site. This provision did not therefore apply to the travel in issue, but would apply to ‘their travel between sites’ (paragraph 264). That conclusion was not only open to the ET on the facts, but obviously correct.

After that, the ET considered regulation 34(2)(b). It asked itself ‘when the Workers are travelling to the first site, is it uncertain whether they would otherwise be catching chickens etc because their hours vary as to the length or times when they are to carry out this work?’ The ET’s conclusion, on the evidence, was that regulation 34(2)(b) did not apply. ‘While the locations and start times varied, the Workers knew in advance what time they were due to start work.’ The ET did not accept ‘that while they were travelling they did not know whether they would otherwise [be] on the farms carrying out the physical activities of their role. They were told, at least the evening before, about the arrangements’ (paragraph 265). That conclusion was not only open to the ET on the facts, but obviously correct.

The ET recorded, in paragraph 266, the Respondents’ argument that even if time on the minibus had been time when the Workers would otherwise be working, it would be ‘exempted anyway under regulation 34(1) because they were travelling from home to a place where they would carry out their assignment ‘(i.e. not from the employer’s premises)’. The workers could have been compelled under the contract to start at the employer’s premises, but ‘in practice they did not other than occasionally’. The regulations did not ‘stipulate’ that the terms of the contract were relevant (paragraph 266). Arguments about normal commuting were irrelevant. Regulation 34 did not refer to commuting, but to travel at a time when the worker ‘would otherwise be working’, and ‘applies exemptions to that’ (paragraph 267). That conclusion was not only open to the ET on the facts, but obviously correct.

In paragraph 268 the ET recorded HMRC’s invitation ‘to apply a purposive approach’. The ET’s response was that that was an invitation ‘to put a gloss on the meaning of regulation 34’. The ET added, in paragraph 269, that ‘The wording is clear, and it does not restrict the amount of excluded travelling time’. The ET also added that HMRC could not explain what any such restriction should be: ‘is it all travelling time above 2 hours, or what may be deemed reasonable?’. That conclusion was not only open to the ET on the facts, but obviously correct. The ET, as the fact-finder in this legislative scheme, was particularly well placed to comment about the difficulty of devising and applying such an uncertain approach to the facts. This part of the ET’s reasons echoes an analogous point made by Lady Arden in paragraph 66 of her judgment in Mencap (see paragraph 35, above).

Nor was the submission that travel like this was not the target of regulation 34, which was aimed at ‘much more limited time’, any more persuasive. ‘But at what travel is it directed?’ There was no relevant material which helped the ET with that question (paragraph 270). In paragraph 271 the ET rejected the argument that regulation 34 should not be construed ‘so as to exclude protection by giving the employer the choice as to whether to commence the lengthy work-related journey either from home or at the employer’s premises’. Regulation 34 said nothing about ‘the contractual situation regarding what the travel arrangements are’. I repeat the comments I made in the last two sentences of the previous paragraph.

The ET’s conclusion was that ‘the relevant travelling was between the Workers home and the first site and if not held of itself to be time work under regulation 30/the contract, would fall within the exception in regulation 34(1)(a) and (b) but only of course, where the worker would otherwise be working (which is not applicable here because it is not argued by [HMRC] that the Workers would otherwise be carrying out any work if they were not travelling in the minibus’ (original emphases). That conclusion was not only open to the ET on the facts, but obviously correct.

The answer, therefore, to the linked questions which start this section of my judgment is ‘Yes’.

HMRC argued, and the EAT commented in paragraph 47 of its judgment (see paragraph 53, above), that the facts of this case reveal a potential injustice or anomaly. The potential anomaly is that whether or not a worker’s travel time counted as hours of time work can be influenced or manipulated by an employer’s decision in a case like this to provide transport and to pick up the workers from their homes, with the apparently unjust result, in this case, that up to eight hours a day when the workers were travelling did not count as hours of time work. An argument the other way, put by Mr Taylor in his brief oral submissions to us, is that the Respondents’ base is not in an urban area, not all the workers live near that base, and the vast majority of the workers cannot drive and do not have cars, so that they would find it difficult to get to the base in the first place. The ET explored this issue to some extent, and I am not able to say whether or not the facts of this case do reveal an anomaly in the drafting of the Regulations. There is at least one relevant gap in the evidence (see the last sentence of paragraph 39, above). But if there is such an anomaly, this statutory scheme provides the means of correcting it, either a report by the expert statutory body, the LPC, or amendment of the Regulations by the Secretary of State (see paragraphs 6-7, above). They are in a much better position than is this court to decide whether there is an anomaly, and whether and if so exactly how the regulations should be re-drafted to correct it.

For those reasons I would dismiss this appeal.

I agree with both judgments.

I agree that this appeal should be dismissed. Because the issue raised by it may be relevant in other cases I will state my core reasons briefly in my own words, but they do not differ in essence from those of Elisabeth Laing LJ or indeed of Judge Stout at paras. 40-50 of her excellent judgment (save that her particular point based on the provisions in the tax legislation about “ordinary commuting” – see para. 46 – did not feature in the submissions before us).

The essential question for the ET was whether the workers’ travel from their homes to the farms to which they were assigned for that day counted as “time work” within the meaning of regulation 30 of the National Minimum Wage Regulations. The full text of the regulation appears at para. 15 of Elisabeth Laing LJ’s judgment, but for present purposes the only point that matters is that “time work” must be “work”.

As Elisabeth Laing LJ points out, “work” is not defined in the Regulations. In one obvious sense the workers were plainly not working in the course of their journeys to and from the farms. They were not performing any of the tasks that they were employed to do: on the contrary, they were free, as Judge Stout pointed out in vivid terms at para. 50, to use their time as they wished, subject to the constraints of being in the back of a minibus. HMRC’s case, which the ET accepted, is that they were nevertheless working in a broader sense because their time was not wholly their own: they were making a journey, in transport provided by their employer and which they were obliged to use, for the purposes of being able when they got there to do what I might call (without prejudging the question) their “actual work”. But, for the reasons which follow, if the regulations in Chapter 3 are read as a whole, and in particular if regulation 30 is read in the light of regulation 34, it is clear that that is not the sense in which the word “work” is used in this context.

Elisabeth Laing LJ sets out the terms of regulation 34 at para. 16 above. The elements in it are as follows:

It is the necessary premise of the primary provision under regulation 34 that while a worker is travelling “for the purposes of time work” they are not doing “work” within the meaning of regulation 30: that is why the hours in question are to be treated as hours of time work – in other words, they are to be deemed to be doing time work even though they are not doing work within the meaning of regulation 30 itself. To put it more shortly, regulation 34 confirms that “work” in regulation 30 means “actual work”. (Of course, as Judge Stout acknowledges at para. 44 of her judgment, there are many situations in which a person will be doing actual work while travelling; but we are not concerned with a case of that kind.)

That conclusion is dispositive of the issue in this appeal. “Work” in regulation 30 means “actual work”, and the ET itself found – correctly and inevitably – that the Respondents’ workers were not doing actual work while they were travelling. It formed no part of the ET’s reasoning, or HMRC’s case before us, that the workers in this case qualified to be treated as doing time work in accordance with regulation 34. That is because, on its own findings, the travel was not during time in which they would otherwise have been working, but also because, even if it were, it would fall within the terms of the exception in the second half of paragraph (1).

I would have reached that conclusion even apart from the decision of the Supreme Court in Mencap that “sleeping-in” did not constitute time work. But I agree with Judge Stout and Elisabeth Laing LJ, for the reasons that they give, that its reasoning (which is essentially to the same effect as that of this Court in that case) applies equally to time spent travelling.